Project Information Document (Pid) s48

PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB5933 Project Name Second Essential Public Health Functions Project (FESP II) Region LATIN AMERICA AND CARIBBEAN Country Argentina Sector Health (90%); Public administration- Health (10%) Lending Instrument Specific Investment Loan Project ID P110599 Borrower(s) REPUBLIC OF ARGENTINA Implementing Agency Ministerio de Salud de la Nacion Av. 9 de Julio 1925, 2o Piso Buenos Aires Argentina Tel: /Fax: (54-11) 4379-9339 Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 15, 2010 Estimated Date of September 10, 2010 Appraisal Authorization Estimated Date of Board November 11, 2010 Approval Decision Project authorized to proceed to appraisal upon agreement on any pending conditions and/or assessments.

I. COUNTRY CONTEXT

1. Although per capita gross national income in Argentina is US$7,2601, poverty and inequity remain a concern among a population of 41 million2, 89 percent of which live in urban areas. The National Statistical and Census Institution estimates that 9 percent of households (13.2 percent of the population) were living below the poverty line as of the end of 2009 3, while 3 percent of households (3.5 percent) were extremely poor. Poverty rates are much higher in the Northeast Region, where 16.5 percent of households live below the poverty line. The Government of Argentina (GoA) is strengthening and extending its social policies in an effort to improve social indicators linked to income4.

2. Argentina has faced two economic crises in the last decade and suffered indirect economic and social costs in 2009 due to outbreaks of dengue and A/H1N1 severely affecting the country.

II. SECTORAL AND INSTITUTIONAL CONTEXT

3. Argentina continues to face a silent epidemic of chronic diseases due to the ageing of the population and increasing numbers of people with unhealthy life-styles in a country with little focus on health promotion and disease prevention. The average life expectancy in Argentina is 75 years, which contributes to an increase in the burden of disease from chronic diseases. Four key lifestyle-related

1 Current international dollars in 2009. Ministry of Economy and Public Finance (MEPF). 2 National Statistics and Census Institute 2010. 3 The Permanent Households Survey was undertaken in 31 urban conglomerates of the country. 4 Through conditional cash transfers of $45 dollars per child provided through the “Asignación Familiar Universal” program. health risks are prevalent among the population, namely high rates of tobacco smoking, excessive drinking, and increasing numbers of overweight people due to lack of exercise and unhealthy eating habits.

4. These four risk factors are the main triggers for chronic diseases, yet most of them are preventable, if detected early. Some progress has been made on prevention but there is no single comprehensive health promotion program in Argentina.

5. The GoA manages two national programs for care and prevention of NCDs (Non-Communicable Diseases): a program to Strengthen Primary Health Care that provides screening and medication for hypertension and diabetes to around two million people; and the Federal Health Program (PROFE) that covers vulnerable and uninsured people receiving non contributory pensions, including for heath care for chronic diseases.

6. Inadequate quality of health care as well as access and unnecessary high costs are key determinants of rising health spending.

7. PROFE serves 596,467 extremely vulnerable and uninsured people, including women with seven or more children (41 percent), population with severe disabilities (51 percent) most of them disabled as a result of chronic diseases, and population over 70 years of age receiving non contributory pensions (8 percent), most of them suffering from two or more chronic conditions. The costs of PROFE rose substantially between 2002 and 2009, due to growing numbers of beneficiaries and rising costs per beneficiary related to coverage of chronic diseases as well as adjustments for inflation.

8. Since 2003, the Government has been responding to the new sector priorities through its health sector reform program known as the Federal Health Plan (FHP), which is an integrated package of complementary policy reforms and actions intended to increase the effectiveness of public subsidies for improving the health status of the poor. With respect to stewardship, the Government’s FHP also highlights the need to strengthen National Ministry of Health’s stewardship and regulatory functions with respect to Essential Public Health Functions and management of key programs. To support the implementation of the FHP, the Bank has been engaged in a close and productive health sector dialogue with the GoA that spans more than fifteen years. Over the last ten years, the GoA has faced a number of important challenges and has sought Bank financial and technical support to address these, including FESP I, “Plan Nacer” (Provincial Health Insurance Adaptable Program Loans I and II), and the Emergency Project for Prevention and Management of Influenza. The first two projects are the backbone of reforms in the public health services in Argentina. FESP I focus on public goods —such as control of infectious diseases—while Plan Nacer finances individual prevention and care services for mothers and children. The Influenza Project focuses on strengthening the surveillance system to cope with influenza.

9. FESP I strengthened MSN’s structure and implementation capacity and introduced, for the first time in the region, an innovative output-based financing mechanism for public health. The MSN is responsible for defining sector objectives and policies, undertaking sector coordination (through the Federal Health Council or COFESA, which includes Ministers from all provinces), setting and enforcing quality standards and regulations as well as overseeing other traditional public health areas (e.g. regulation, planning and disease surveillance) in support of provinces, which, by Constitution, are responsible for the health of the population and which retain the authority to manage and deliver health care within their jurisdiction. Within this context, FESP I strengthened MSN’s organizational structure, through the creation of a Directorate of Chronic NCDs and a Directorate of Vector-Borne Diseases at the national level and Health Promotion Units at the provincial level, and supported the development and implementation of the National Health Promotion Plan. FESP I also introduced an output-based financing mechanism for public health that transfers resources from the MSN to the provinces based on their achievement of agreed results and targets linked to the delivery of certain public health interventions and activities (known as “Actividades en Salud Pública” or ASP). While the adoption of this mechanism had a slow start, it has not only proven to be effective but is widely known and has been adopted throughout the country.

10. As a follow-on to FESP I, the proposed Project seeks to strengthen the management and epidemiological surveillance of key programs related to chronic diseases, using a results-based approach. The proposed Project seeks to reinforce MSN’s stewardship role, introduce strategies to promote better life-styles and preventive measures for selected chronic diseases, improve the management of health coverage of disadvantaged populations and ensure coordination of the federal and provincial levels. The Project would provide high quality technical assistance based on global experience and support for developing policies, plans, monitoring, and investments to address the complex and growing problem of chronic diseases. Other key features of the Project include: (i) development of a robust monitoring framework for “outputs” and “capitas”; (ii) improvement of the quality of program supervision through external technical audits; (iii) integration of performance- based financing schemes and results-based approaches in project implementation; and (iv) promotion of rapid results in the provinces through the appropriate use of incentives and performance agreements. The proposed Project will provide an additional funding equivalent to 22.09 percent of the MSN’s annual budget of the seven selected programs.

11. More than 65 percent of project financing will support results-based disbursements, including health outputs and/or capitation payments, and achievements will be tracked and verified through an independent external audit. Given that the FESP II design has moved away from a classical investment lending project focused on inputs towards an output-based approach, regular independent external technical and financial audits will be carried out to track and verify completion of a set of activities to trigger disbursement based on the number of outputs achieved. Likewise Bank financing will reimburse the MSN for insurance premia based on the enrollment of the target populations and achievement of specific indicators, also tracked and verified by the audits. This will further reduce project implementation risks associated with procurement for the rest of the loan.

III. PROJECT DEVELOPMENT OBJECTIVES

12. The project development objectives of the proposed project are to: (i) improve the stewardship role of the federal public health system, and (ii) increase the coverage and clinical governance of seven selected federal public health programs.

13. Around 4.26 million people will directly benefit from the project, including those enrolled or eligible for enrolment in the seven selected public health programs. In addition, 13 million people will indirectly benefit from the project including those targeted for the reduction of selected global risk factors through prevention campaigns and priority programs.

14. Achievement of the PDO will be measured by the following set of indicators:

(i) Increased number of children under one year of age immunized with pentavalente vaccine, from 690,000 in 2010 to 726,000 children in 2015.

(ii) Increased percentage of certified departments or local territories with satisfactory or highly satisfactory epidemiological surveillance nodes (C2)5, from 0 percent in 2010 to 80 percent in

5 Using the national epidemiological quality index. 2015.

(iii) Increased kilograms of blood-plasma6 produced by MSN labs, from 33,000 kgs in 2010 to 40,000 kgs in 2015.

(iv) At least 200 out of the 700 participating municipalities are certified as “Health Responsible Municipalities”.

(v) Reduction of the tobacco consumption prevalence in adults 18-64, from 30 percent in 2010 to 27 percent in 2015.7

IV. PROJECT DESCRIPTION

15. Component 1: Strengthen the MSN’s and provincial Ministries’ stewardship capacities and improve the public health infrastructure of selected priority programs (US$155 million). This component will contribute to improving the national and provincial stewardship capacities, using the essential public health functions framework and modernizing management of selected programs and will further strengthen the epidemiological surveillance of chronic diseases, through reengineering the MSN to address NCDs and providing technical assistance and training. This component will also strengthen the public health infrastructure, including human resources, for public health labs, blood banks, cold chain and supply monitoring systems.

16. Component 2: Improve results of selected public health priority programs at the provincial level (US$320 million). This component will contribute to the achievement of results in seven selected programs at the provincial and municipal levels, through two sub-components: (i) Financing public health results in provinces (US$40 million); and, (ii) Improving the efficiency and performance of the PROFE program (US$280 million).

17. Component 3: Administration, Monitoring and Evaluation (US$8.8 million). This component will finance activities related to the management of the Project (including the operational costs of the Coordination Unit, the International Financing Unit for Health and provinces), independent external technical audits of Component 2, financial audits and monitoring and evaluation activities.

V. FINANCING

Source ($m) Borrower -- International Bank for Reconstruction and Development 485 Total 485

6 In order to produce more blood plasma kilograms, more blood needs to be donated and transformed. Thus, this indicator measures increased blood donations and increased storage and production capacity in national labs to transform blood into blood components, including its main component, plasma kilograms. 7 Trends in tobacco prevalence consumption are as follows: 34 percent in 2005 and 30 percent in 2010. The main purpose of using this indicator is to monitor the trend in tobacco consumption in Argentina. VI. IMPLEMENTATION

18. The Project will be implemented by the MSN through the Secretariat of Promotion and Health Programs. The Secretary of Health, in his role as national project director, is responsible for the coordination of project activities and will be supported by the Coordination Unit (CU) currently responsible for the implementation of FESP I, and the International Financing Unit for Health (UFI- S) for administrative, financial and procurement matters and the oversight of the monitoring and evaluation process. In addition, with respect to PROFE-related activities, the Project director will be supported by the PROFE coordinator and a technical sub-unit within PROFE created specifically for project implementation.

19. UFI-S is the MSN’s centralized fiduciary agency that manages external financial resources and provides support to all executing units involved in project implementation. It will be responsible for procurement and financial management of the proposed Project, including management of procurement processes, contract administration, processing of payments to suppliers and consultants, financial management of the Project and collection of information required for output-based disbursements.

20. The Ministries of Health of the provinces will be responsible for implementing ASPs and the remaining activities related to Components 1 and 2 as well as the management of the supply monitoring system. The provincial Minister of Health will be supported by provincial consultants financed by the Project in accordance with UFI-S’s procedures outlined in the Operational Manual. The financing of the provinces by MSN is governed by a Framework Agreement signed by both parties through which each province agrees to the objectives of the Project, the indicators by which their performance will be measured, the use of results-based payment mechanisms, Bank safeguard policies and the Operational Manual. Finally, provinces have to agree to oversee and report to the CU on the use of funds of the municipal-implemented ASPs.

VII. SAFEGUARD POLICIES (INCLUDING PUBLIC CONSULTATION)

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [X] [ ] Indigenous Peoples (OP/BP 4.10) [X] [ ] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [ ] [X] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects on International Waterways (OP/BP 7.50) [ ] [X] Projects in Disputed Areas (OP/BP 7.60)* [ ] [X]

21. The Project triggers Safeguards 4.10 of Indigenous Populations and it will directly benefit indigenous communities and dispersed rural populations. Fifteen of the 24 provinces in Argentina have indigenous populations. In conformity with OP/BP 4.10 on Indigenous Populations, all 15 provinces developed Indigenous Peoples Plans (IPPs) under FESP I that in successive Bank evaluations have been considered to be “good practice” in the region. These IPPs are being

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas implemented with satisfactory results and provincial indigenous peoples’ social assessments are updated annually. An Indigenous Peoples Planning Framework was developed building upon the existing framework and IPPs under FESP I as well as on lessons learned from project implementation. The cost of implementing provincial IPPs has been estimated and included in the Indigenous Peoples Planning Framework. The Project will continue to coordinate with existing programs, such as the Community Health Doctors Program in indigenous peoples areas and indigenous health at the provincial level. Social and gender aspects will be included in the terms of reference for the FESP I Mid-Term Review. The lessons learned from this Review will contribute to improving these aspects. FESP II will include specific ASP designed to address not only social and gender aspects but also safeguard issues. Consultations on the indigenous related documents took place in June 2010, disclosure in-country in July 2010 and disclosure by the Infoshop in August 2010.

22. PROFE targets the most vulnerable groups, including women with seven children or more, the disabled and people over 70 years of age without social security income. Under the proposed Project, PROFE will support the preparation of a letter of rights for women to ensure that they are aware of their right to health care. In addition, in the two provincial pilots, the Project will put in place explicit warranties to entitle PROFE female beneficiaries to health prevention services (such as cervical cancer screening, reproductive health and STI and HIV/AIDS).

23. The Project triggers OP/BP 4.01 Environment Assessment and 4.09 Pest Management and is classified as a Category B, given the limited scale of the proposed activities. The Project will not finance large-scale construction but rather improvements to existing facilities throughout the country. The on-going Environmental Assessment is evaluating the state of health care waste management in the country, including the legal framework, compliance issues, management considerations and provincial capacities. Some of these studies are ongoing and the results will be integrated into the Environmental Management Plan. This Plan incorporates capacity building and institutional measures for preparation, supervision and monitoring of the Project from an environmental and social standpoint, while also integrating safeguards capacities into a component of the Project as a specific output and achievement of the Project at a national level. Given the demand-driven nature of the Project, a Framework has been developed for screening of provincial activities. The Framework would ensure compliance with national and sub-national legislation related to environmental assessment and licensing and with Bank safeguards policies. Rehabilitation activities will also conform to Bank and national health and safety standards. A checklist and, in some cases, environmental assessments will be required for review of potential impacts, current waste management practices, and will include mitigation or capacity-building measures as necessary. Health Care Waste Management Plans may also be utilized based on typologies of activities. The Framework builds on the existing Environmental Management Framework and Environmental Action Plan under FESP I as well as on lessons learned from project implementation. Supervision functions will be included in the Environmental Management Plan and associated costs were included in overall project budget and sub-project costs.

24. OP/BP 4.09 Pest Management is triggered given that the emergency response fund may be supportive of some vector control activities using pesticides in cases of emergencies. No pesticides will be procured under the project nor will be eligible for reimbursement under provincial demand-driven sub-projects. No significant increase in use of pesticides is expected to arise from project investments. Any emergency response activities involving pest management will be led by the MSN and its specialized agencies in vector control that have comprehensive procedures and guidelines for pest management in the health sector. The Environmental Plan includes the pertinent guidelines for any vector control measures in line with national laws and the Food and Agriculture Organization code of conduct as required by Bank safeguards. The Plan specifies procedures for the implementation of a Vector Management Action Plan in the event of an emergency response within this context.

25. Argentina has a broad experience in the management of environmental safeguards. Under FESP I and the Emergency Project for Prevention and Management of Influenza, detailed Environmental Management Frameworks and Environmental Action Plans were developed and are currently under implementation. Hospital environmental diagnoses for hospital waste have been finalized, and include hospital waste management mechanisms. Argentina has comprehensive national legislation in place to guide health care waste management practices. The teams in charge of implementing both safeguards have demonstrated good capacity. Based on lessons learned during implementation of FESP I, this Project include specific ASPs (public health interventions and activities) related to safeguards to further strengthen the country’s capacity to implement safeguard related activities. Consultations of the environmental documents took place in July 2010, disclosure in-country in August 2010 and disclosure by the Infoshop in September 2010.

VIII. Contact point at World Bank and Borrower

World Bank Contact: Fernando Lavadenz Title: Sr Health Spec. Tel: (202) 473-1463 Fax: (202) 614-0755 Email: [email protected]

Borrower/Client/Recipient Contact: Máximo Diosque Title: Secretario de Promoción y Programas Sanitarios, Ministerio de Salud de la Nación Tel: (54-11) 4379-9002 Email: [email protected]

IX. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop