FOR OFFICIAL USE ONLY Report No: PAD3633 Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF US$400 MILLION

TO THE Public Disclosure Authorized ARAB REPUBLIC OF

FOR A

SUPPORTING EGYPT’S UNIVERSAL HEALTH INSURANCE SYSTEM PROJECT

May 26, 2020

Public Disclosure Authorized

Health, Nutrition, and Population Global Practice Middle East and North Africa Region

Public Disclosure Authorized

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Official Use The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

CURRENCY EQUIVALENTS

(Exchange Rate Effective May 19, 2020)

Currency Unit = (EGP) EGP 15.75 = US$1

FISCAL YEAR July 1 – June 30

ABBREVIATIONS AND ACRONYMS

AFD Agence Française de Développement (French Agency for Development) CAPMAS Central Agency for Public Mobilization and Statistics CCO Curative Care Organization CERC Contingent Emergency Response Component CHVA Climate and Health Vulnerability Assessment COVID-19 Coronavirus Disease CPF Country Partnership Framework DA Designated Account DALY Disability-Adjusted Life Year DP Development Partner EASPMTM Egyptian Authority for Standard Procurement and Medical Technology Management EE Eligible Expenditure EEC Eligible Expenditure Category EGYCAP Egypt Certified Auditor Program EHSS Environment, Health, and Safety Standards EJU Economic Justice Unit ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework FFS Fee-for-Service FM Financial Management FMIS Financial Management Information System GAHAR General Authority for Healthcare Accreditation and Regulation GOE Government of Egypt GDP Gross Domestic Product GP General Practitioner GRM Grievance Redress Mechanism GRS Grievance Redress Service HCO Organization Hep C Hepatitis C Virus

The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

HIECS Household Income, Expenditure and Consumption Survey HIO Health Insurance Organization HQIP Healthcare Quality Improvement Project HNP Health, Nutrition, and Population HTA Health Technology Assessment IFC International Finance Corporation IFR Interim Financial Reports IMPD International Medical Procurement Department IPF Investment Project Financing IT Information Technology IVA Independent Verification Agent JICA Japan International Cooperation Agency KPI Key Performance Indicator M&E Monitoring and Evaluation MOE Ministry of Environment MOF Ministry of Finance MOHP Ministry of Health and Population MOSS Ministry of Social Solidarity NCD Noncommunicable Disease NGO Nongovernmental Organization OOP Out-of-Pocket PBC Performance-Based Condition PBR Performance-Based Result PDO Project Development Objective PHC Primary Health Care PMU Project Management Unit POM Project Operations Manual PTES Program of Treatment on the Expense of the State RF Results Framework SC Steering Committee SEP Stakeholder Engagement Plan SESA Strategic Environmental and Social Assessment SHI Social Health Insurance SIA Social Impact Assessment STEP Systematic Tracking of Exchanges in Procurement TA Technical Assistance TEHSP Transforming Egypt’s Healthcare System Project TFR Total Fertility Rate THIO Teaching Hospitals and Institutes Organization TOR Terms of Reference UHC Universal Health Coverage UHIA Universal Health Insurance Agency UHIL Universal Health Insurance Law

The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

UHIS Universal Health Insurance System USAID US Agency for International Development WHO World Health Organization

Regional Vice President: Ferid Belhaj Country Director: Marina Wes Regional Director: Keiko Miwa Practice Manager: Rekha Menon Task Team Leader(s): Amr Elshalakani, Elizabeth Mziray

The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ...... 6 A. Country Context...... 6 B. Sectoral and Institutional Context ...... 8 C. Relevance to Higher Level Objectives ...... 18 II. PROJECT DESCRIPTION ...... 19 A. Project Development Objective ...... 21 B. Project Components ...... 21 C. Project Beneficiaries ...... 33 D. Results Chain ...... 35 E. Rationale for Bank Involvement and Role of Partners ...... 36 F. Lessons Learned and Reflected in the Project Design ...... 37 III. IMPLEMENTATION ARRANGEMENTS ...... 38 A. Institutional and Implementation Arrangements ...... 38 B. Results Monitoring and Evaluation Arrangements...... 39 C. Sustainability ...... 39 IV. PROJECT APPRAISAL SUMMARY ...... 40 A. Technical, Economic and Financial Analysis ...... 40 B. Fiduciary ...... 47 C. Legal Operational Policies ...... 49 D. Environmental and Social ...... 49 V. GRIEVANCE REDRESS SERVICES ...... 56 VI. KEY RISKS ...... 57 VII. RESULTS FRAMEWORK AND MONITORING ...... 61 ANNEX 1: Sources for Eligible Expenditure Categories for Project-financed Performance Based Conditions ...... 84 ANNEX 2: UHIS Implementation Schedule ...... 87

The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

DATASHEET

BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name

Egypt, Arab Republic of Supporting Egypt’s Universal Health Insurance System

Project ID Financing Instrument Environmental and Social Risk Classification

Investment Project P172426 Substantial Financing

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s)

[✓] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country

[ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

16-Jun-2020 31-Oct-2024

Bank/IFC Collaboration Joint Level

Yes Complementary or Interdependent project requiring active coordination

Proposed Development Objective(s)

To (i) increase the coverage of Egypt’s Universal Health Insurance System in Phase I Governorates, (ii) strengthen UHIS-related governance and institutions, and (iii) provide temporary financial protection against high out of pocket health expenditures for vulnerable populations outside Phase I Governorates.

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Components

Component Name Cost (US$, millions)

Component 1:Enrollment and empanelment of the population into UHIS 208.00

Component 2: Strengthening UHIS governance, systems and facilitating environment 132.00 Component 3: Providing temporary financial protection against high out of pocket 50.00 health expenditures for vulnerable populations outside Phase I Governorates Component 4: Institutional Capacity Building, Technical assistance and Project 10.00 Management

Component 5: Contingent Emergency Response Component (CERC) 0.00

Organizations

Borrower: Arab Republic of Egypt Implementing Agency: Ministry of Finance

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 2,837.00

Total Financing 2,837.00

of which IBRD/IDA 400.00

Financing Gap 0.00

DETAILS-NewFinEnh1

World Bank Group Financing

International Bank for Reconstruction and Development (IBRD) 400.00

Non-World Bank Group Financing

Counterpart Funding 2,437.00

Borrower/Recipient 2,437.00

Expected Disbursements (in US$, Millions)

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The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

WB Fiscal Year 2020 2021 2022 2023 2024 2025

Annual 0.00 138.00 127.00 91.00 44.00 0.00

Cumulative 0.00 138.00 265.00 356.00 400.00 400.00

INSTITUTIONAL DATA

Practice Area (Lead) Contributing Practice Areas Health, Nutrition & Population Governance

Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks

SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance ⚫ Substantial

2. Macroeconomic ⚫ Substantial

3. Sector Strategies and Policies ⚫ Moderate

4. Technical Design of Project or Program ⚫ Substantial

5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial

6. Fiduciary ⚫ Substantial

7. Environment and Social ⚫ Substantial

8. Stakeholders ⚫ Substantial

9. Other

10. Overall ⚫ Substantial

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The World Bank Supporting Egypt’s Universal Health Insurance System (P172426)

COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No

Does the project require any waivers of Bank policies? [ ] Yes [✓] No

Environmental and Social Standards Relevance Given its Context at the Time of Appraisal

E & S Standards Relevance

Assessment and Management of Environmental and Social Risks and Impacts Relevant

Stakeholder Engagement and Information Disclosure Relevant

Labor and Working Conditions Relevant

Resource Efficiency and Pollution Prevention and Management Relevant

Community Health and Safety Relevant

Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant

Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources

Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities

Cultural Heritage Not Currently Relevant

Financial Intermediaries Not Currently Relevant

NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS).

Legal Covenants

Sections and Description

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Schedule 2, Section 1, B, 1, (a): The Borrower shall, through MOF, not later than three (3) months after the Effective Date, or such later date as agreed by the Bank, prepare and adopt a Project Operations Manual containing detailed guidelines and procedures for the implementation of the Project.

Sections and Description Schedule 2, Section 1, E, 1: The Borrower, through MOF shall, not later than three (3) months after the Effective Date, or such later date as agreed by the Bank, appoint and thereafter maintain, at all times during the implementation of the Project, an independent verification agent with qualifications and experience and under terms of reference acceptable to the Bank (“Verification Agent”).

Sections and Description Schedule 2, Section 1, C, 1: The Borrower shall, through MOF, ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Bank.

Sections and Description Schedule 2, Section 1, A, 1, (b): The Borrower shall, through MOF, not later than three (3) months after the Effective Date, or such later date as agreed by the Bank, maintain at all times during the implementation of the Project, a Project Management Unit (“PMU”) to be responsible for the day-to-day management of the Project with composition, functions, responsibilities and resources acceptable to the Bank.

Sections and Description Schedule 2, Section 1, A, 2: The Borrower shall, through the MoF, not later than three (3) months after the Effective Date, or such later date as agreed with the Bank, establish and thereafter maintain at all times during the implementation of the Project, a Steering Committee with a composition, mandate, terms of reference and resources satisfactory to the Bank.

Conditions

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I. STRATEGIC CONTEXT

A. Country Context

1. The Arab Republic of Egypt has been implementing an important reform program to redress long-standing economic challenges. Macroeconomic conditions broadly improved, following several years of slowing economic activity and large external and fiscal imbalances that have been further exacerbated by the economic downturn in 2011. The reforms have been supported by the international donor community, including through the World Bank’s Programmatic Development Policy Financing and the International Monetary Fund’s three-year Extended Fund Facility.

2. Before the outbreak of the coronavirus disease (COVID-19) pandemic, 1 economic growth remained robust and macroeconomic imbalances had broadly improved. Growth increased to 5.6 percent in FY19 (up from 5.3 percent the previous year), a rate that was sustained through Q1-FY20. The unemployment rate has declined to pre-2011 revolution levels (7.1 percent in Q1-FY20), although the improvement partially reflects a decline in labor force participation rather than job creation, as the unemployed (mostly youth) exit the labor force. Female unemployment also remained high at 22.7 percent in Q1-FY20. Meanwhile, inflation (which was driven by the combined effect of large exchange rate depreciation, the upward adjustments to energy prices, and value added tax) declined markedly to 5.3 percent in February 2020, down from a three-decade high of 33 percent in July 2017. On the fiscal side, primary surplus marginally improved, reaching 0.5 percent of gross domestic product (GDP) in H1-FY20, up from 0.4 percent a year earlier. Government debt is declining but remained high at 90.3 percent of GDP at the end of FY19. The external accounts are broadly stabilizing, where the balance of payments achieved a marginal surplus of 0.1 percent of GDP in Q1-FY20, in line with its ratio a year earlier. This stability is the outcome of a narrowing current account deficit (mainly reflecting the containment of imports) that was offset by the deterioration of the capital and financial account surplus. Net international reserves reached US$45.5 billion by end-January 2020, covering around eight months of merchandise imports. However, vulnerabilities persist, including sluggish private consumption and underperforming exports and foreign direct investment, which will be aggravated by the disruptive repercussions of the COVID-19 pandemic. The overall budget deficit widened slightly to 3.8 percent of GDP in H1-FY20, from 3.6 percent of GDP a year earlier, affected by the decline in the revenues-to-GDP ratio especially from value added tax, which reflects weaker private consumption.

3. Fiscal consolidation measures have helped reduce inefficient and unsustainable public spending. However, the education and health sectors have yet to see the benefits. Despite a constitutional mandate to increase spending on education and health to 6 percent and 3 percent of GDP, respectively, the spending on health was limited to 1.4 percent of GDP in FY18, down from 1.6 percent in FY17, while on education, it was 2.5 percent of GDP in FY18, down from 3.6 percent in FY16.

4. The Government of Egypt has scaled up existing social assistance mechanisms and introduced new ones to improve social conditions. The erosion of real incomes (following the 2017 and 2018 inflation shocks) continues to adversely affect households. The deterioration in the standards of living is mainly in

1 An outbreak of COVID-19 caused by the 2019 novel coronavirus (severe acute respiratory syndrome coronavirus 2 [SARS-CoV- 2]) began spreading in December 2019.

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urban governorates in which poverty rates increased from 15.1 percent in FY15 to 26.7 percent in FY18. To mitigate the social costs of reforms and their disproportionate effect on those in poverty, the Government of Egypt (GOE) has scaled up available social assistance mechanisms. Through three consecutive social assistance packages, the GOE introduced exceptional wage and pension bonuses, revised tax exemption thresholds, and raised the minimum wage to EGP 2,000 per month up from EGP 1,200 per month. The budget allocation for the Takaful and Karama cash transfer programs grew by more than 400 percent between FY15 and FY19, expanding the program to reach 2.2 million households in October 2019, in particular addressing female-headed households. Similarly, the GOE has doubled the semi-cash allowance on the food subsidy ration cards. Finally, the GOE has introduced a Universal Health Insurance program to mitigate against high out-of-pocket (OOP) health expenditures, as well as boost accessibility to quality health services.

5. There is a greater need for reforms for better private sector participation. With improvement in macroeconomic conditions, further efforts are needed to foster the development of a private-sector-led economy and to alleviate key binding constraints for inclusive and sustained growth. Access to finance and land as well as the lack of a level-playing field remain key impediments to private sector activity. The implementation and proper enforcement of legislative reforms are imperative to enhance the business environment and ensure fair competition and equal opportunity for all market players.

6. COVID-19 context in Egypt. The first case of COVID-19 in Egypt was diagnosed on February 14, 2020. As of May 22, 2020, Egypt has reported 15,787 confirmed cases and 707 deaths. Among all governorates, Cairo, Alexandria, and Damietta have the highest numbers of cases. Males make up 60.7 percent of confirmed cases and more than 70 percent of COVID-19 deaths. Most of the confirmed cases are among those above 60 years of age.

7. Similar to other countries, COVID-19 poses a threat to Egypt. The pandemic risks putting a strain on the country’s health care system, in addition to other important implications for the economy. The pandemic is expected to hamper growth through both supply- and demand-side effects. Disruption in global trade and supply chains, tighter financing conditions, and lower tourism and remittances receipts will impact external balances. On the fiscal front, while the recent collapse in oil prices may ease some pressure on the imports bill, the pace of fiscal consolidation may slow down due to higher spending and lower revenues. In response to the immense COVID-19 threat, the GOE has launched a rigorous emergency response. A national COVID-19 emergency response Steering Committee (SC) has been established. The SC reports to the President and Prime Minister. A national public health emergency was declared on March 17, 2020, upon the first recorded death from COVID-19. Macro-fiscal and social policy responses to the COVID-19 shock are being put in place, including a 300-basis point monetary policy rate cut and forbearance measures on credit. There are also signals of a fiscal stimulus in the FY20/21 budget. Social safety net policy measures have also been adopted to support informal workers and women in poorer areas. To support the COVID-19 health sector response, an emergency COVID-19 operation of US$50 million, prepared under the Global COVID-19 Strategic Preparedness and Response Program was approved by the World Bank on May 14, 2020. The project aims to strengthen the prevention, detection, and response to the COVID-19 pandemic in Egypt.

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B. Sectoral and Institutional Context

8. Egypt has significantly improved health outcomes, but disparities remain. Between 1990 and 2017, Egypt’s maternal mortality ratio declined from 106 to 37 deaths per 100,000 live births and the infant mortality rate fell from 60 to 18 deaths per 1,000 births. Life expectancy increased from 66 to 72 years over the last two decades but remains below the Middle East and North Africa average of 74 years. The life expectancy at birth for Egyptian females was estimated at 73.6 years in 2015, which is 4.4 years higher than that of males. Egypt achieved the Millennium Development Goals 3 and 4, related to improving gender equality and maternal health, respectively.

Table 1. Selected Health Outcomes and Health Financing Indicators for Some Lower-Middle-Income Countries (2016–2017)

Egypt Indonesia Pakistan Tunisia Ukraine Nigeria Morocco

Life expectancy at birth (years) 72 71 67 76 72 54 76 Infant mortality rate (per 1,000 18 21 57 15 8 76 19 births) Maternal mortality ratio (per 37 177 140 43 19 917 70 100,000 live births) Immunization DPT rate (%) 95 79 75 97 50 57 99 Human capital index (2018) 0.49 0.53 0.39 0.51 0.65 0.34 0.50 OOP expenditures (%) 61.0 37.3 65.2 39.9 54.3 75.2 48.6 Government health expenditure 1.4 1.4 0.8 3.9 2.9 0.5 2.7 (% of GDP) Government health expenditure (% of total government 4.2 8.3 3.9 13.7 7.0 5.0 9.1 expenditure) Health expenditure per capita 131.0 111.6 39.6 256.5 141.2 79.3 171.5 (US$) Source: World Bank Open Data. Note: DPT = Diphtheria, Pertussis, and Tetanus.

9. Despite overall improvements, disparities in health outcomes persist, with populations in remote rural areas and urban slums and women being significantly worse off. Upper Egypt and the border governorates are the worst performers. For instance, under-five mortality is the highest in Upper Egypt (38 deaths per 1,000 births), which is almost twice the level of the urban governorates (20 deaths per 1,000 births).2 Access to and use of health services, particularly preventive care services and risk of morbidity and mortality, are also different for women and men due to their roles and to unequal power relations, with poor health outcomes for women. Possible causes are cultural norms with the typical female being the main health caregiver in the family, as well as supply issues related to unfavorable working hours of health facilities for working men.3

2 Egypt Demographic and Health Survey 2015. 3 Health Policy Initiative, Task Order 1. 2010. Gender Assessment of the USAID/Egypt Health Program. Washington, DC: Futures Group.

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10. Egypt is also facing a growing burden of noncommunicable diseases (NCDs), mainly due to poor prevention and control of NCD risk factors such as hypertension, obesity, high cholesterol levels, diabetes, and smoking. NCDs now account for 82 percent of all deaths and 67 percent of premature deaths in the country. The recent national screening campaign under the ‘100 million healthy lives’ program supported by the World Bank-financed Transforming Egypt’s Healthcare System Project (TEHSP) showed that out of 53 million adults above the age of 18 years who were screened, 6 percent were diabetic, 26 percent hypertensive, and 70 percent overweight. Egypt has the highest obesity rate among the world’s 20 most populous countries.4 Around 22.8 percent of Egyptian adults are smokers. Because of the high prevalence of such risk factors, NCDs such as ischemic heart disease and cerebrovascular disease are now the leading causes of death.5 According to the latest 2015 Egypt Health Issues Survey, 50 percent of women ages between 15 and 59 are obese and an additional 26 percent are overweight. Being obese and overweight are consequences of poor nutrition, representing key risk factors associated with NCDs, particularly cardiovascular disease and diabetes. The prevalence of obesity and overweight was lower among males (26 percent and 34 percent, respectively).

11. An uptick in fertility is driving the new population dynamics in Egypt. Egypt’s total fertility rate (TFR) was 3.4 births per woman in 2000 and decreased to 3 births per woman in 2006, consistent with what would be considered global good practice. However, this trend unexpectedly reversed with TFR steadily increasing and reaching 3.376 births per woman in 2017. Between 2012 and 2015 alone, Egypt registered the highest absolute increase in population growth of 9.5 million people. A few Middle East and North Africa region countries are experiencing a similar reverse trend in fertility, while most countries (higher, similar, or lower income than Egypt) have a steady decline in fertility.7 The population is expected to reach 128 million by 2030 and 150 million by 2050.8

12. Egypt’s health system faces multiple challenges that affect its ability to meet the rising demands of the population. While a combination of rising NCDs, high population growth, and a longer life expectancy is increasing the demand for health services, the service delivery system is seriously underfunded, highly fragmented with suboptimal provider payment mechanisms, and offers low quality of care.

13. Egypt has one of the lowest levels of total health expenditures in the Middle East and North Africa region at 1.4 percent of GDP with OOP payments being the largest source of financing. Only 5.6 percent of total government budget is spent on health, with public spending accounting for 38 percent of the total health expenditure. More than half of the total health expenditure (61 percent) is private, of which 90 percent is OOP by households and 10 percent in the form of prepaid private voluntary health insurance. The rest is expenditure by the government (29 percent) and employers (10 percent). Families in the lowest income quintile spend 21 percent of their income on health versus 13.5 percent for those in the highest income quintile. Health financing is further compounded by constrained public finances. It is estimated that a post-COVID-19 economy will further increase the inequalities between population

4 Global Burden of Disease (2017). 5 Egypt Burden of Disease Institute of Health Metrics and Evaluation (IHME) (2014). 6 World Bank Data Bank (2019), https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?locations=EG&most_recent_year_desc=false. 7 World Bank Data Bank (2019), https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?most_recent_year_desc=false. 8 United Nations population projections.

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subgroups and increase the burden on poorer segments of the society, particularly informal workers, the elderly, and those with chronic diseases.

14. Egypt’s health service delivery system is highly fragmented. As illustrated in figure 1 there are currently three key players in health services: government, parastatals, and the private sector. The government sector consists of different parallel delivery systems maintained by various line ministries with no separation between financing and health service provision functions. The parastatals include: (a) the Health Insurance Organization (HIO) which provides not only health insurance coverage but also health services for civil servants and preschool and school children (around 58 percent of the population), (b) the Curative Care Organization (CCO) which provides secondary hospital services to both public and private health insurance beneficiaries, and (c) the Teaching Hospitals and Institutes Organization (THIO) which provides tertiary care and treats non-HIO insured individuals. The Ministry of Health and Population (MOHP) has significant decision-making authority over the parastatals despite their autonomous status. There is a growing private-for-profit sector mostly in tertiary care and for specialized health services in large urban areas. The presence of the private sector in primary care as well as in poor rural areas remains negligible. Many nongovernmental organizations (NGOs), including religiously affiliated clinics and other charitable organizations, also provide private-not-for-profit services. Egypt also uses the Program of Treatment on the Expense of the State (PTES) to provide health care coverage for the uninsured poor and the informal sector. The PTES utilizes a fully automated network in all the governorates through 27 sub- medical councils, 12 major hospitals, and a total of 400 local hospitals. The scheme has a well-defined and priced benefit package that caters for inpatient and outpatient treatment for NCDs, surgical packages, and oncology treatments.

Figure 1. Existing Structure of Egypt’s Health Care Sector

Policy maker MOHP

Ministry of Planning (Capital Funding) Ministry of Finance (Operational Funding) Payers HIO Other PTES Direct funding to governorates Households ministries

Private (profit/nonprofit) University Other Providers MOHP CCO THIO HIO hospitals and clinics hospitals ministries including NGOs Medical Professional Syndicates Regulators MOHP

15. The Egyptian health system is not well placed to deliver quality health services. Although more than 95 percent of the population live within 5 km of a health facility, facilities are often ill-equipped to respond to the people’s health needs. Dilapidated state-run facilities, regular drug stock-outs, and lack of adequate personnel have been widely reported.9 Primary health care (PHC) is mostly provided by the

9 A Roadmap towards Achieving Social Justice in Egypt, The World Bank, 2015.

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MOHP, and the shortage of PHC physicians is a concern, especially in Upper Egypt and border governorates where around 50 percent of public PHC facilities lack a full-time, on-duty doctor. Most health care jobs are low paying and provide little incentive to improve performance. Health professionals receive lifelong licenses with no continuing medical education requirements. Dual practice is allowed with no legal restrictions and is therefore rampant. As a consequence, quality of care is often poor, leading to low utilization and reduced health effectiveness.10

16. The current health system poses numerous challenges for women which disproportionately affect those in the poorest areas. While tend to use health care services more frequently than men, with 61 percent of health care utilization by women in 2018, they are less likely to be covered by health insurance due to their lower labor force participation (20 percent of women are covered by health insurance compared to 37 percent of men).11 In a recent study, 80 percent of women reported not having any health insurance coverage compared to 63 percent of men in 2018.12 Women also often use private providers and, consequently, spend more on all types of health care.13 Further, health care service benefits are not always tailored to women’s specific health needs, for example, persistent very high levels of cesarean sections (52 percent in Egypt compared to the World Health Organization (WHO) recommended rate of 15 percent) that involve greater risks of morbidity and mortality for both mothers and babies, and the lack of well-structured breast and cervical cancer screening programs.

17. In response to the above challenges, Egypt has chosen a transformational Universal Health Insurance System (UHIS) as its pathway toward achieving universal health coverage (UHC) and improving the health outcomes of its citizens. In December 2017, the GOE passed the Universal Health Insurance Law (UHIL) to guide implementation of the UHIS and to accelerate progress toward UHC in line with the health pillar of Egypt‘s 2030 Sustainable Development Vision and the Egyptian Constitution (Article 18 “Every citizen is entitled to health and to comprehensive health care with quality criteria’’). The UHIL envisions mandatory coverage for all citizens in the country, including vulnerable groups (approximately 30 percent of the population) who will be subsidized by the government. In addition, the UHIL allows: (a) optional coverage for living abroad, and (b) coverage for all foreign residents, subject to reciprocal agreements with their respective countries. Successful implementation of this program has support at the highest levels of government.

The Universal Health Insurance System

18. The UHIS is based on the principles of social solidarity and, in contrast with the existing health care system (figure 1), includes a separation of functions between the provider and the purchaser of services. As stipulated in the UHIL, the Universal Health Insurance Agency (UHIA) serves as the ‘purchaser’ and the health care organization (HCO) as the public ‘provider’ of services (figure 2). Other providers will

10 El-Zanaty and Associates. 2014. Egypt Demographic and Health Survey 2014. Cairo, Egypt: Ministry of Health, El-Zanaty and Associates, and Macro International. 11 Selwaness I., and M. Ehab. 2019. “Social Protection and Vulnerability in Egypt: a Gendered Analysis.” Cairo, Egypt: The Economic Research Forum. Working Paper No. 1363. 12Selwaness I., and M. Ehab. 2019. “Social Protection and Vulnerability in Egypt: a Gendered Analysis.” Cairo, Egypt: The Economic Research Forum. Working Paper No. 1363. 13 Selwaness I., and M. Ehab. 2019. “Social Protection and Vulnerability in Egypt: a Gendered Analysis.” Cairo, Egypt: The Economic Research Forum. Working Paper No. 1363.

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include private hospitals (both for profit and non-profit) including NGOs. Under this system, the MOHP will continue to provide services related to public health, prevention, ambulance, family planning, health response in disaster and epidemic relief and other services to be provided free of charge by the government. The Ministry of Defense will continue to provide services through military hospitals. There will be two types of UHIS regulations: (a) financial regulations by the Prime Minister, the Ministry of Finance (MOF), and the Parliament, and (b) technical regulations by the General Authority for Healthcare Accreditation and Regulation (GAHAR) as the ‘accreditor’.

Figure 2. New Structure of Egypt’s Health Care Sector under the UHIS

Policy Maker MOHP

Payers UHIA Private payers Households MOF Interactions Activity- Based Payments and Capitation

Autonomous Private Ministry of Defense MOHP (Preventive care, public providers (profit/nonprofit) family planning, public Providers for example, hospitals and clinics health including disaster HCO including NGOs and epidemic relief)

Economic/financial regulation (Prime Minister, MOF, and Parliament) Regulators GAHAR (Technical registration, accreditation, and follow-up)

19. Four newly formed UHIS agencies will work in a coordinated manner in the implementation of UHIS. The four new agencies are the UHIA, HCO, GAHAR, and Egyptian Authority for Standard Procurement and Medical Technology Management (EASPMTM). While these agencies are in the early stages of development, the existing UHIL provides the legal framework necessary for their operations. There is still much work to be done to ensure that these agencies are adequately staffed and fully operational, including substantial capacity building. The GOE plans to fully staff the positions at the central and governorate levels within these agencies in the first three years of operation of UHIS. The roles, responsibilities, and reporting arrangements of the four UHIS agencies are as follows:

(a) UHIA. Reporting to the Prime Minister and under close supervision of the MOF, the UHIA is responsible for pooling, provider payments, and management and investment of UHIS funds. As the UHIS single payer, the UHIA contracts qualified public and private providers who are accredited by GAHAR. The UHIA can also purchase health services for private insurance beneficiaries under special arrangements with private insurers.

(b) HCO. Reporting to the Minister of Health, the HCO will provide primary, secondary, and tertiary care. When each governorate enters the UHIS, the HCO will acquire the ownership of all public health facilities within that governorate to achieve: (i) economies of scale, (ii)

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efficiency, and (iii) integration of care (including referrals). HCO facilities will be contracted by the UHIA only after being rehabilitated and accredited by GAHAR.

(c) GAHAR. Reporting directly to the Office of the President and having the highest level of independence under Egyptian law, GAHAR has the mandate to develop quality standards and accredit service providers. The accreditation process includes two steps: (a) registration on the condition that the provider meets the basic safety, regulatory, and licensure requirements, and (b) accreditation that will certify achievements of standards related to structural quality, clinical processes, and patient outcomes.

(d) EASPMTM. Reporting to the Prime Minister, the EASPMTM will procure and manage the supply of pharmaceuticals, medical equipment, and other medical supplies for all public entities. Utilizing economies of scale and streamlined procedures, the EASPMTM is expected to procure commodities in a cost-effective manner and will be able to negotiate preferred prices for its commodities for both public and private sector providers.

20. The UHIS will be financed from various sources. The UHIS aims to help Egypt achieve long-term stability in health financing with less dependence on state budget and less exposure to economic fluctuations. UHIS revenues will come from three main sources: (a) contributions/premiums (table 2); (b) earmarked fees and taxes including, among others, contributions from toll road fees, car licensing fees, and tobacco taxes (box 1); and (c) co-payments paid by beneficiaries at the point of service (table 3). Various entities will be involved in revenue collection, including the MOHP, MOF, Ministry of Transportation, Ministry of the Interior, Tax Authority, Social Insurance Fund, UHIA, and service providers. Revenue collection is therefore a complex task and requires a robust IT system and continuous data exchange among different entities. The UHIA can also enter into agreements with private entities to collect, for a marginal fee, the contributions by third parties. Based on global experience, the collection of contributions from the non-poor informal sector has been identified as a major challenge.

Table 2. UHIS Contributions/Premiums Category Contribution Dependents Formal employees (civil servants, 1% of subscription wage 3% for a non- private sector, and other working spouse nongovernment employees) or one without Self-employed. 5% of insured wage or wage according to tax steady income, declaration or the maximum insured wage, 1% for each whichever is greater child or People with total disability and non- 5% of the insured wage, and the total amounts dependent formal employment pensioners. paid by the person for all the family members shall not exceed 7% and the public treasury shall pay the cost differential Pensioners 2% of the monthly pension value Single mothers and beneficiaries of 2% of the monthly pension value pensions Employer’s share covering their 4% (3% for illness and 1% for occupational employees injuries) of insured wage Subscription covered by the public 5% of the national minimum wage for each treasury for the vulnerable groups vulnerable person

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Note: The lump sum values shall increase by 7% annually, including the national minimum wage declared by the GOE.

Box 1. Earmarked Fees and Taxation • EGP 0.75 of the price of each pack of cigarettes sold in the local market, whether of local or foreign production, and this amount shall be increased every three years by EGP 0.25 and capped at EGP 1.5 • 10% of the value of any sold tobacco item, other than cigarettes • EGP 1 for each vehicle on a toll road • EGP 20 per year when issuing or renewing a driving license • EGP 50 when issuing or renewing a car license whose engine capacity is less than 1.6 L • EGP 150 when issuing or renewing a car license whose engine capacity exceeds 1.6 L and is less than 2 L • EGP 300 when issuing or renewing a car license whose engine capacity is 2 L and more • EGP 1,000 to EGP 1,500 when clinics, treatment centers, pharmacies, and pharmaceutical companies enter into contract with the UHIS • EGP 1,000 for each bed when issuing licenses for hospitals and medical centers • A solidarity contribution tax of 2/1,000 out of the total of the sole proprietorships and companies, regardless of their nature, line of business, or the legal system they are subject to, as well as the economic public authorities • 50 percent of the revenues collected in the self-revenue funds in public health facilities • EGP 5 stamp tax on the applications submitted to the UHIA, HCO, and GAHAR • Returns of the UHIA investments • Fees for other services provided by the UHIA other than those provided for under the UHIL • Foreign and domestic grants and loans concluded by the GOE for the UHIA • Gifts, aid, donations, and bequests accepted by the UHIA’s Board of Directors

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Table 3. Fees and Co-payments Paid by Insured Persons Medical Service Co-payment Value Home visit by a doctor EGP 100 Medication 10% with a maximum of EGP 1,000 to reach 15% in the 10th year of Law implementation. No co-payment for chronic diseases as identified by the UHIA and all cancer treatment Radiology scans and other medical imaging; 10% of the total value, with a maximum of EGP 750 for each medical and laboratory tests (except for chronic case diseases and tumors) Internal Medicine Departments (except for chronic 5% of the total value, with a maximum of EGP 300 per visit diseases and cancers) Note: The lump sum values will increase by 7 percent annually, including the national minimum wage announced by the GOE.

21. The public treasury will cover UHIS contributions for vulnerable groups. Eligibility criteria includes any of the following conditions:14 (a) the person or family is entitled to cash support provided by the Takaful and Karama cash transfer programs and the older social security program; (b) the unemployed person or family head is ineligible to or has exhausted his/her eligibility period to receive unemployment benefits including every dependent person in the same family; (c) the person or family head with no income, who lacks family support and resides in a social or health care facility; (d) the disabled person or family head who cannot earn money or who does not have any source of income, without prejudice to the Law on the Rights of Persons with Disabilities; (e) persons and families who reside in specific geographic areas and are temporarily experiencing a natural or manmade disaster; and (f) the person or family head whose average income does not satisfy his/her own needs or his/her family members’ essential needs determined after appealing to a dedicated board. Eligibility criteria will be amended at periodic intervals of not more than three years.

22. The UHIS will provide a benefits package for all beneficiaries. The UHIL outlines an implicit benefit package which includes primary, secondary, and tertiary care services as well as inpatient and outpatient drug benefits. The insured persons will also have the right to be treated abroad subject to the approval of a special board. Only services included in the defined benefit package will be covered. There will be no self-referrals allowed, except in the case of an emergency. Balance payments15 are prohibited for covered services, except for add-on services of a nonmedical nature.

23. Public health and preventive services will continue to be funded by government revenues and provided by the MOHP. These include vaccinations, ambulance services, family planning services, and health services in disaster and outbreak situations. Mechanisms for the MOHP to deliver and/or contract such services are yet to be developed.

24. New provider payment mechanisms will be introduced to increase quality and efficiency. Under the UHIS, there will be a shift from input to output-based reimbursement. PHC services will be reimbursed on a capitation basis, with 15 percent of the capitation payment contingent on the achievement of certain

14 Prime Ministerial Decree No.1948/2019. 15 Balance payment occurs when providers bill a patient for the difference between the amount they charge and the amount that the patient’s insurance pays.

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key performance indicators (KPIs) (for example, patient utilization and referral rates). A set of priority PHC services (to be determined) and specialized outpatient services will however be paid on a fee-for-service (FFS) basis. For inpatient services, case-based payment will be made for surgical interventions and FFS/per diem for nonsurgical interventions. Payment rates were approved by the UHIA Board in late 2019 and will be adjusted on a quarterly basis in the first year of UHIS implementation, biannually for another two years, and yearly thereafter. The manner in which provider payment will influence behavior of providers remains to be seen because the UHIA has an umbrella contract with the HCO for services by all qualified public facilities. Level of provider autonomy for individual public facilities under the HCO remains unclear. However, there is an understanding of the importance of granting some managerial autonomy to health facilities in combination with adequate capacity, appropriate accountability mechanisms, and alignment of incentives to enable them to provide services more efficiently and with better quality.

25. An integrated information technology (IT) system will be the backbone of the UHIS. An integrated IT architecture is envisioned to consist of a beneficiary management portal, a health care portal, a provider portal, an accreditation portal, access management, and a contact center. It will have the following required components: (a) Payer System; (b) Health information Exchange; (c) Enterprise Resources Planning Module which includes financial, human resources, asset management, and investment management modules; (d) Accreditation System; (e) Pharmacy Information System; (f) Clinical Order Management System/Provider Portal; (g) Standards; and (h) Analytics and Enterprise Risk Management Module. A consortium led by an international vendor has been chosen to undertake this work. Figure 3 is an illustration of an integrated IT system.

Figure 3. An Integrated IT System (Illustration)

26. The GOE has requested technical and financial support in the UHIS rollout from the International Bank for Reconstruction and Development (IBRD). IBRD has a comparative advantage in health financing issues and a long engagement in Egypt’s health sector. This engagement includes support to the MOHP through technical assistance (TA) and investment projects, such as the TEHSP, which was launched in September 2018 to help improve health service delivery in Egypt. In addition to screening 52 million citizens for Hepatitis C (Hep C) and NCDs and providing ongoing treatment for 2.2 million Hep C patients, the project is supporting the MOHP to improve the quality of care in 600 PHC facilities and 30 tertiary hospitals (many of which are in UHIS Phase I Governorates); train and contract 2,800 community health

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workers; boost demand- and supply-side interventions for family planning programs; and provide advanced nucleic acid testing for public blood supply.

27. In response to the GOE’s interest in enhancing private sector participation in the UHIS rollout, IBRD has partnered with the International Finance Corporation (IFC) to support the UHIS implementation under the proposed operation. With the aim of boosting the World Bank Group’s ‘Maximizing Finance for Development’ Initiative and realizing IFC’s 3.0 Strategy, IBRD and IFC will collaborate in the following areas: (a) improving quality accreditation standards that are conducive to private sector providers, and (b) providing an enabling environment for greater private sector participation. IFC will provide input to the World Bank to inform the technical support to the new health insurance agencies for better engagement with private sector players. Opportunities for joint analyses and dialogue with the GOE will be pursued. In addition, IFC plans to invest US$325 million on its own account and mobilize an additional US$150 million by 2025 in Egypt.

28. The UHIS will be progressively rolled out in phases. Starting as a pilot in Port Said in 2018, it will be rolled out nationwide in six phases over a 15-year period (table 4). The Phase I Governorates were selected by the GOE based on their readiness and existing health system capacities to launch the UHIS. In addition, to ensure coverage of vulnerable populations, two large governorates with very high poverty rates, Luxor and Aswan, were also included in Phase I.

Table 4. Phases of UHIS Rollout as Determined by the GOE Phase Governorate Poverty Level (%)a Port Said 7.6 Ismailia 32.4 Suez 20.0 1 South Sinai 51.5 Luxor 55.3 Aswan 46.2 North Sinai 51.5 Matrouh 51.5 2 Qena 41.2 Red Sea 51.5 Damietta 14.6 Alexandria 21.8 3 Beheira 47.7 Kafr El Sheikh 17.3 Sohag 59.6 New Valley 51.5 Minya 54.7 4 Fayoum 26.4 Beni-Suef 34.4 Assyut 66.7 Dakahlia 15.2 Gharbia 9.4 5 Menoufia 26.0 Sharqia 24.3 6 Cairo 31.1

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Phase Governorate Poverty Level (%)a Giza 34.0 Qalioubiya 20.1 Source: a. Household Income, Expenditure, and Consumption Survey (HIECS) 2018, Central Agency for Public Mobilization and Statistics (CAPMAS).

29. The proposed operation will also support Egypt’s response to the COVID-19 pandemic. The proposed operation reflects in its design some of the new challenges presented by the COVID-19 pandemic such as the inability of some vulnerable subgroups to protect themselves against high OOP health expenditures for vulnerable populations in non-Phase I Governorates. It is also complementary to the IBRD-financed COVID-19 Emergency Response Project that aims to support the immediate operational challenges and critical areas of support identified as key gaps in Egypt’s national COVID-19 response.

C. Relevance to Higher Level Objectives

30. The World Bank Group’s Country Partnership Framework (CPF) for Egypt for FY15–FY19 (Report No. 94554-EG), discussed by the Board of Executive Directors on November 5, 2015, supports economic and social transformations in Egypt. The CPF has three focus areas that are closely linked to the : (a) improving governance, (b) private sector job creation, and (c) social inclusion. Specifically, on social inclusion (Focus Area No. 3), the proposed project supports Objective 3.2 by increasing access to quality health care services which remains inequitable across the country. The Performance and Learning Review for FY15–FY21 (Report No. 135709-EG), dated April 3, 2019, found that although results on social inclusion have been mixed, there has been substantial progress in the achievement of Objective 3.2 through the increase in access to health care services. However, there is much work to be done to attain social justice and to improve the Human Capital Index for Egypt.

31. The UHIS is expected to complement and contribute to Egypt’s focus on improving human capital. As an early adopter of the Human Capital Project, the GOE has committed to the ‘whole of government’ approach to build, protect, and utilize human capital. The UHIS will contribute to building human capital through investing in early years of life, providing better health care, antenatal care, and targeted childhood stimulation. It will also protect human capital through: (a) reducing NCDs through early diagnosis and addressing unhealthy behaviors earlier, (b) expanding coverage and prioritizing vulnerable groups and protecting the elderly, (c) supporting local community-based service delivery; (d) using technology for service delivery and monitoring, and (e) creating economic opportunities, both short and long-term employment opportunities, and rebuilding economic institutions. Finally, it will contribute to utilizing the human capital properly through increasing formal jobs and a gender-equal environment.

32. The proposed project contributes to the achievement of the World Bank Group’s twin goals of ending extreme poverty at the global level within a generation and promoting shared prosperity in a sustainable manner. By improving the efficiency and effectiveness of the UHIS, the proposed project will contribute to the objective of UHC. It is also aligned with IFC’s 3.0 Strategy that focuses on creating markets and mobilizing private capital, with increased support to countries where private capital flows are inadequate to address major development gaps. The project will help catalyze market creation by establishing the necessary regulatory and policy frameworks with the aim of leveling the playing field for the private sector and promoting private sector competition, encouraging the spread of best practices and new technologies, and building local capacity and skills. In addition, it will contribute to the WBG goals

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of ensuring access to health services and financial protection for everyone by 2030 and ensuring that, by the same year, no one is pushed into or kept in poverty by paying for health care.

33. The project is aligned with the World Bank Group Gender Strategy (FY16–FY23, Report No. 102114), particularly under the first pillar ‘Improving gaps in human endowments’ through improved access and quality of health services particularly for low-income women. It is also aligned with the National Strategy for the Empowerment of Egyptian Women 2030, Goal 3: ‘Women’s social empowerment by providing opportunities for social participation and civic engagement, as well as helping them access their rights to human entitlements including education health and justice’.

34. The project is also fully aligned with the World Bank Group’s enlarged Middle East and North Africa Regional Strategy (March 2019), that focuses on building greater citizen engagement, more effective protection of the poor and vulnerable, inclusive and accountable service delivery, and a stronger private sector that can create jobs and opportunities. The project contributes to the Middle East and North Africa Regional Strategy pillar on ‘renewing the social contract’ through supporting socially demanded interventions in the health sector. In addition, the project is consistent with the strategic principles of creating fair and accountable health systems in a sustainable manner. The project will strengthen citizen engagement and voice in the governance and stewardship of the system through structured participation of citizens and patient groups in the coordination committees both at the national and regional levels.

35. The proposed project and the TEHSP have distinct modalities and similar timeframes and are anticipated to work together to integrate support for both demand- and supply-side needs in Egypt’s health care system. The proposed project will also complement other World Bank-financed projects in social protection (Strengthening Social Safety Net Project - P145699) and education (Supporting Egypt Education Reform - P157809). Together, the support by the World Bank will help enable Egypt to realize its human capital potentials.

36. The proposed project is aligned with Egypt’s 2014 constitutional mandates and the MOHP Strategy and Vision 2030. In that regard, the strategy explicitly commits to: (a) implement UHC, (b) boost quality of health care services, (c) strengthen preventive health programs, (d) further develop health care governance and decentralization, (e) upgrade health information systems, (f) modernize health human resource management, and (g) upgrade the pharmaceutical sector.

II. PROJECT DESCRIPTION

37. The proposed project will assist the GOE to immediately put in place the building blocks of the UHIS and roll out the new UHIS in Phase I Governates and offer temporary financial protection to the most vulnerable outside of Phase I Governorates to protect them from high OOP health expenditures resulting from the COVID-19 outbreak. The project will support the MOF and the four newly formed UHIS organizations (UHIA, HCO, GAHAR, and EASPMTM) to roll out the UHIS in Phase I Governorates over a four-year period. It will also help to level the playing field for the private sector and incorporate the private sector into the UHIS. Specifically, the project will support the following activities:

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• Ensure the enrollment of the population, especially the poor in the UHIS in Phase I Governorates while protecting the most vulnerable outside of Phase I Governorates. The project will support UHIS enrollment and empanelment with a general practitioner (GP) among the population (PBC16 1) and the poor (PBC 2). At the same time, it will provide temporary financial protection against high OOP health spending for the vulnerable outside Phase I Governorates (in the poorest 11 governorates) during the COVID-19 pandemic (PBC 9).

• Promote the accreditation and contracting of both public and private providers. The project supports transparent and consistent accreditation for both the public and private sector (PBR 7.4)17 and incentivizes UHIS contracting with such accredited providers (PBC 5). An empanelment module for providers within the UHIS will be developed (PBR 4.2) to support contracting with accredited providers.

• Strengthen provider payment mechanisms. To this end, the project supports the UHIA to develop a benefit package and determine providers’ costs (PBC 3). This is combined with the development of provider payment mechanisms by the UHIA (PBR 6.1) and promoting transparency in public and private provider performance through the dissemination of annual reports on patient satisfaction, grievances, and utilization (PBR 7.2).

• Build the capacity of UHIS-related agencies. (PBCs 4, 7, and 8)

38. The rollout of the UHIS requires a well-coordinated sequencing of reforms and implementation activities. A schedule of priority reforms and activities have been developed for each of the four UHIS agencies (annex 2). The project will support the most immediate priorities in this schedule which include:

(a) Development of the organization structure and implementing the multiyear staffing plan for each of the four UHIS agencies (PBC 7);

(b) Development of the necessary governance structure, accountability and regulatory frameworks (PBC 8);

(c) Development of the modular IT system (PBC 4);

(d) Development of the benefit package (PBC 3);

(e) Enrollment and empanelment of the beneficiaries (PBCs 1, 2, and 8);

(f) Development of provider payment mechanisms (PBC 6); and

(g) Accreditation and contracting of providers (PBC 5).

16 Performance-Based Condition. 17 Performance-Based Result.

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39. Many of the project activities will be implemented in parallel. Details of the timeframe of each activity will be further elaborated in the annual work plan of each agency.

A. Project Development Objective

PDO Statement

40. The Project Development Objective (PDO) is to: (i) increase the coverage of Egypt’s Universal Health Insurance System in Phase I Governorates, (ii) strengthen UHIS-related governance and institutions, and (iii) provide temporary financial protection against high OOP health expenditures for vulnerable populations outside Phase I Governorates.

Table 5. PDO-level Indicators PDO PDO Indicators To increase coverage of Egypt’s UHIS 1. Number of target population enrolled in UHIS and empanelled with in Phase I Governorates a GP in Phase I Governorates 2. Per capita annual PHC visits by UHIS enrollees in Phase I Governorates To strengthen UHIS-related 3. Percentage of contracted public provider entities that have been institutions accredited by GAHAR (100% private, at least 80% public) 4. Annual percentage of payments by UHIA that are made to contracted providers in Phase I Governorates within 60 days from the date of claim submission Providing temporary financial 5. Number of vulnerable individuals benefiting from PTES outside protection against high OOP health UHIS Phase I Governorates. expenditures for vulnerable population outside Phase I Governorates.

B. Project Components

41. The proposed project will use the Investment Project Financing instrument with Performance- Based Conditions (IPF-PBC) modality recognizing results are key in incentivizing reforms. The PBCs reflect not only key results of the reform program but also the areas where it is important to have transformational change focusing on the most challenging areas that have the potential to influence the success of the UHIS. With the use of PBCs, the GOE will be reimbursed for eligible expenditures (EEs) after verification of PBC achievements. Input-based financing will be provided for TA and institutional capacity building for the four UHIS-related institutions. The project will include four components, each focusing on a distinct results area.

42. Component 1: Enrollment and empanelment of the population into UHIS (US$208 million). This component will focus on carrying out an annual program of activities to support the enrollment of the target population (including the vulnerable groups who are eligible for premium subsidies as per the UHIL) in Phase I Governorates into the UHIS as well as the empanelment of enrollees with general practitioners (GPs). Given that women in Egypt are less likely to be covered by health insurance due to their lower labor force participation rate, the project will particularly benefit the largely female uninsured population

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therefore narrowing the existing gender gap. Disbursement under this component will be based on the verified achievement of two PBCs, which constitute Results Area 1.

Results Area 1: Increasing population coverage and empanelment for UHIS (US$208 million)

• PBC 1: Number of people enrolled with UHIA and empanelled with a GP in Phase I Governorates (excluding targeted vulnerable people) (US$28 million). This PBC will support various processes and systems to ensure that all population subgroups are enrolled and empanelled. This will include the support for active mechanisms to target some difficult-to- reach population subgroups, for example, informal non-poor and nomadic/tribal concentrations in remote areas. Multiple channels will be used to inform beneficiaries on enrollment to effectively meet specific needs of women and men, especially women in poorer areas who may have a more limited access to public health information. To encourage uptake of female enrollment with UHIA, orientation to inform beneficiaries will be offered through mass media campaigns in targeted governorates including social media, face-to-face outreach at health facilities and workplaces. In addition, to ensure that women who may not have access to relevant information due to gender norms that restrict women’s mobility, mobile buses will be used for outreach and will serve as registration points. The establishment of a hotline to address queries on enrollment will contribute to addressing access gaps for females, particularly those who do not work outside the home.

Given the geographical scope of Phase I Governorates, PBC 1 will include populations that are particularly vulnerable to climate change, including people who reside in specific geographic areas that temporarily experience a natural or manmade disaster. This PBC will therefore help increase their resilience to climate change, especially through improving access to care for climate-sensitive diseases.

• PBC 2: Number of targeted vulnerable people enrolled with UHIA and empanelled with a GP in Phase I Governorates (US$180 million). This PBC will support results in identifying, enrolling, empaneling, and subsidizing of contributory premiums and/or co-payments of designated vulnerable groups in Phase I Governorates as stipulated in the UHIL.

The six underprivileged groups that meet the public treasury criteria 18 to have their contributions covered by the UHIS, live in the same geographical areas prone to climate change as those under PBC 1. Given their disadvantaged status, they are more vulnerable to natural hazards (such as extreme precipitation and flooding and sea-level rise) and the resulting price changes, have less access to support to cope and adapt to extreme climate events and fluctuations in heat, and are at higher risk of vector-borne diseases. They are

18 The public treasury will cover contributions for financially underprivileged persons who meet any of the following conditions: (a) the person or family entitled to cash support provided by Takaful and Karama programs and the social security program; (b) the unemployed person or family head who is ineligible to or has exhausted his/her eligibility period to unemployment benefits and every dependent person in the family; (c) the person or family head with no breadwinner or income, who lacks family care and resides in a social or health care facility; (d) the disabled person or family head who cannot earn money or have any source of income, without prejudice to the Law on the Rights of Persons with Disabilities hereinabove; (e) persons and families who reside in specific geographic areas and who are temporarily experiencing a natural or manmade disaster; and (f) the person or family head whose average income does not satisfy his/her own needs or his/her family members’ essential needs.

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particularly vulnerable to health impacts of climate change, thus the safety net in health provided by the project is all the more critical. Moreover, the project will prioritize participants of the ongoing cash transfer programs supported by the World Bank - Takaful and Karama - with about 90 percent of the beneficiaries being female, supported through subsidies for contributory premiums and/or co-payments. Thus, the project is expected to reduce the burden of OOP expenditures, especially for low-income women, reducing the gap with high-income women and men.

43. Component 2: Strengthening UHIS governance, systems and facilitating environment (US$132 million). Establishing and strengthening the UHIS governance mechanism, capacity, and operational protocols early in the program are crucial for the subsequent implementation of the UHIS. This component will focus on carrying out an annual program of activities to: (a) strengthen UHIS governance and institutional arrangements, including the UHIS oversight and coordination platform; (b) create an enabling environment for private sector participation and citizen engagement mechanisms at both the central and governorate levels through the establishment of coordination bodies for UHIS at the national level and in all Phase I Governorates; and (c) support UHIS positive environmental, climate, and social outcomes. This will be achieved by providing support, among others, in: (a) developing and rolling out the systems and processes for the new UHIS agencies, (b) clearly defining the benefits package and pricing, including addressing women’s health needs/risks; (c) defining the contract terms of references (TORs) and contracting both public and private health providers; (d) establishing and improving provider payment mechanisms to align financial incentives for better performance and quality; (e) supporting the rollout of a modular IT system in terms of beneficiary enrollment, provider management, and claims management (the project support for the IT system will apply advanced technology in terms of data security, privacy, and access management; both national laws and best international practice in the field will be followed to mitigate against the risk of data breaches and inappropriate use of personal data; and the Project Operations Manual (POM) will outline in detail what measures will be put in place); (f) strengthening accreditation and provider contracting; (g) strengthening governance and the mechanism to facilitate private sector participation; and (h) adopting mitigation and adaptation measures to make the UHIS more environment- and climate-friendly. Critical activities in this component will aim to be completed in the first three years of the project. Disbursement under this component will be based on verified achievements of six PBCs, which constitute Result Areas 2 and 3.

Results Area 2. Strengthening UHIA (US$90 million)

• PBC 3: Development and adoption by UHIA of a benefit package for the continuum of care (primary care, secondary, and tertiary hospital care) (US$10 million). This PBC will support the process of development and adoption of a benefit package for all levels of care as well as related rules such as referrals, co-payments, deductibles (if any), and waiting lists. The process will take account of factors such as cost-effectiveness, financial protection, and equity. The benefit package will include interventions to: (a) build climate resilience in health, and (b) promote the use of care at the lower levels which have a smaller carbon footprint. The UHIS benefit package will be tailored to the needs of women including screening for chronic diseases and cancer and will strengthen some of the maternal health packages. According to the Demographic Health Survey 2014, cesarean deliveries make up about 52 percent of all deliveries in Egypt, one of the highest rates globally. As excessive

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cesarean deliveries pose greater risks for both women and their babies, the new benefit package will price normal deliveries similarly to cesarean deliveries to reduce moral hazards.

• PBC 4: Supporting modular UHIS information technology system rollout (US$35 million). This PBC will support capacity building for the rollout of a modular UHIS IT system for enrollment and empanelment of the target population, provider management, and claims management by the UHIA. The modules will be integrated within a currently underdeveloped backbone IT infrastructure that would link different modules as the system matures. Support will also be extended to the procurement module managed by the EASPMTM to ensure effective value-based supply chains for pharmaceuticals, medical equipment, and technology for quality services by public UHIS providers. The new data infrastructure will be energy-efficient. The following PBRs are proposed:

o PBR 4.1: Development and rollout of beneficiary enrollment module within UHIA (US$10 million)

o PBR 4.2: Development and rollout of provider management module within UHIA (US$10 million)

o PBR 4.3: Development and rollout of claims management module within UHIA (US$10 million)

o PBR 4.4: Development and rollout of the procurement module within EASPMTM. (US$5 million)

• PBC 5: Strengthening accreditation and provider contracting (US$25 million). This PBC will support strengthening accreditation and provider contracting functions for different types of services under UHIS (including hospitals, radiology services, individual pharmacies, laboratories, ambulatory services, and telemedicine services - both public and private). This will ensure the realization of two of the key UHIL principles, specifically: (a) provision of quality services by UHIS providers, (b) freedom of choice for beneficiaries, and (c) private sector inclusion and a level-playing field for market competition. The introduction of accredited telemedicine services will offer a potentially ideal approach to deliver targeted support to women in a manner that does not require traveling long distances. The following PBRs also support contracting of individual provider entities, regardless of their affiliation with bigger holding/ownership arrangements to boost their responsiveness and autonomy:

o PBR 5.1: Accreditation by GAHAR and contracting by UHIA of 20 hospitals, of which 5 are non-governmental hospitals in Phase I Governorates (US$10 million)

o PBR 5.2: Accreditation by GAHAR and contracting by UHIA of 30 pharmacies, of which 20 are non-governmental pharmacies in Phase I Governorates (US$3 million)

o PBR 5.3: Accreditation by GAHAR and contracting by UHIA of 8 radiology services providers, of which 4 are non-governmental radiology services providers in Phase I Governorates (US$3 million)

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o PBR 5.4: Accreditation by GAHAR and contracting by UHIA of 15 laboratory service providers, of which 10 are non-governmental laboratory service providers in Phase I Governorates (US$3 million)

o PBR 5.5: Accreditation by GAHAR and contracting by UHIA of 15 ambulatory service providers, of which 5 are non-governmental ambulatory service providers in Phase I Governorates (US$3 million)

o PBR 5.6: Accreditation by GAHAR and contracting by UHIA of three telemedicine service providers, of which two are non-governmental telemedicine service providers in Phase I Governorates. (US$3 million)

• PBC 6: Strengthening provider payment (US$20 million). This PBC will enhance both the UHIS’ and providers’ financial sustainability by: (a) strengthening UHIS provider payment mechanisms for accredited service providers through development and adoption of appropriate regulations to achieve an optimal payment mechanism mix (capitation, FFS, per diems, episode-based payments, and pay for performance) and to help improve efficiency and quality of contracted services, and (b) strengthening the UHIA’s capacity to process payment for providers on time and monitoring efficacy of payment of claims.

o PBR 6.1: Development and adoption of a provider payment mechanism regulation by UHIA (US$5 million)

o PBR 6.2: Annual percentage of payments by UHIA that are paid less than 60 days from the date of claim submission to UHIA by contracted service providers in Phase I Governorates (US$15 million)

Results Area 3. Strengthening governance and creating a facilitating environment for UHIS (US$45 million)

44. This results area will strengthen UHIS governance frameworks (including coordination, human resource planning, and staffing), incorporating social inclusion measures, environmental and climate mitigation and adaptation measures under the UHIS, and monitoring and evaluation of the short- to medium-term effects of the rollout of the UHIS.

• PBC 7: Strengthen governance of UHIS and enhance stakeholder participation and input (US$27 million)

o PBR 7.1: Creation of coordination bodies for UHIS at the national level and in all Phase I Governorates (US$10 million). This PBR will support the creation of a suitable body that will provide oversight and coordination for the UHIS and serve as a dialogue platform for various stakeholders in UHIS-related decision-making. It will also ensure equal representation for women and men.

o PBR 7.2: Development and adoption of the respective organizational structure and multi-year human resource plan for UHIA, GAHAR and HCO (US$2 million). This PBR will

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support the costs associated with development and adoption, through a decree, of the organizational structure and multi-year human resource plan for each of the three agencies with the following attributes: (i) enhancing accountability to the public and other stakeholders; (ii) being able to discharge its statutory duties of ensuring orderly, informed, and fair operations; and (iii) providing suitable capacities to perform its respective business objectives.

o PBR 7.3: Year on year reduction of staffing gap (combined positions in organizational structures) in UHIA, GAHAR and HCO (US$3 million). Aiming to incentivize organizational effectiveness by ensuring the hiring and onboarding of the needed talents, the PBR will support the appropriate gradual staffing of the organizational structures of the UHIA, GAHAR and HCO, following best market practices of hiring and talent acquisition.

o PBR 7.4: Dissemination of annual reports on patient satisfaction, grievances and utilization of services by UHIA and GAHAR (US$5 million). This PBR will support such reports as a means to take stock of client experience and feedback for the UHIS to improve its people-centeredness and boost accountability of the system including issues pertaining to gender and vulnerable groups. Annual reports will present gender- disaggregated data and a gender analysis.

o PBR 7.5: Establishment of a one-stop-shop for licensing of private primary care services (US$3 million). To facilitate private investments in PHC services, this PBR will support the establishment of a one-stop-shop within a suitable government agency for the licensing of private PHC services.

o PBR 7.6: Development and adoption of a process guide for hospital accreditation standards by GAHAR (US$2 million). This PBR will strengthen the uptake, understanding, and implementation of hospital accreditation tools by providers through the development and adoption of a process guide.

o PBR 7.7: Operationalization of a big data analytics unit within UHIA (US$2 million). This PBR will support the creation and operationalization of such a unit which includes, among others, development of TORs, standard operating protocols, staffing, and capacity building of such a unit within the UHIA. The unit will provide timely and in- depth analytics to inform UHIA decision-making.

• PBC 8: Development and adoption of a set of complementary regulations and strategies for UHIS (US$15 million)

o PBR 8.1: Review of Decree No. 1948/2019 (targeting vulnerable groups for UHIS subsidies) and adopting a new framework (US$6 million). The revision will be based on an assessment of the impact of subsidizing the vulnerable groups under the UHIS as per the Prime Ministerial Decree No. 1948/2019 after three years of implementation. The assessment will report on differentiated impacts on women and men.

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o PBR 8.2: Preparation and disclosure of a Strategic Environmental and Social Assessment (SESA) in accordance with the Environmental and Social Commitment Plan (ESCP) on the environmental, climate change and social risks associated with the rollout of UHIS (US$2 million). Such a study will inform the finetuning of environmental and social measures for the UHIS in general and project activities in particular. The assessment will follow the World Bank guidelines for environmental and social assessments based on the World Bank Environmental and Social Framework (ESF) including potential climate adaptation/mitigation risks and measures.

o PBR 8.3: Development and adoption of a green health insurance system strategy (US$2 million). This PBR will support the development and adoption by the UHIA of a new Green Health Insurance System Strategy. The new strategy will be aligned with the ‘Go Greener’ initiative adopted by the GOE and will include mandatory measures including, but not limited to: (i) improved energy efficiency in health facilities; (ii) a Climate and Health Vulnerability Assessment (CHVA); (iii) use of digital health records; (iv) promotion of the use of telemedicine; (v) use of local food sources; (vi) waste reduction; (vii) energy-conscious sourcing and construction; and (viii) reduction in usage of non-recyclables. PBR 8.3 will include climate adaptation measures, particularly through the promotion of telemedicine which helps reduce the carbon footprint related to travel to health facilities.

o PBR 8.4: Satisfactory adoption and implementation by three hospitals (including 2 public hospitals and one non-governmental hospital) of the green health insurance system strategy in Phase I Governorates (US$5 million). Disbursement will be made against the verification that at least three hospitals (public and non-governmental) have met the requirements under the adopted Green Health Insurance System Strategy.

45. Component 3: Providing temporary financial protection against high OOP health expenditures for vulnerable populations outside of Phase I Governorates (US$50 million). This component will provide temporary support, for three fiscal years, to the most vulnerable segments of the society who are affected by the negative health and economic implications of the COVID-19 pandemic in Egypt, and finance the costs associated with their utilization of the PTES. Women are particularly at risk as they are less likely to be covered by health insurance, tend to spend more on health care, and even when employed, they are more likely to be engaged in precarious employments/contracts which offer poorer health and social insurance19. The PTES is fully funded by the treasury and covers Egyptians who are not able to afford private treatment and are not affiliated with any of the existing public and/or private insurance systems. In 2019, the total number of patients who received medical treatment through the PTES reached 3.625 million, worth US$628.8 million according to CAPMAS. The costs for treatment in 2019 reflected a 23.4 percent increase on the year before. While the PTES will be phased out with the rollout of the UHIS, the program is expected to remain the best available tool to provide equity and health care financial protection in the governorates that have not yet introduced the UHIS. Under this project, support will be extended to the population segments in governorates that are not yet included under Phase I of the UHIS. The aim here is to help alleviate the financial burden associated with high OOP health expenditures for

19 National Council for Women, 2020. Policy paper. Egypt’s rapid response to women’s situation during COVID-19 outbreak.

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those population subgroups (including low-income women) and prevent them from being pushed into poverty until the period when they have regained their livelihoods.

Results Area 4: Providing financial coverage for vulnerable population subgroups that are most susceptible to the COVID-19 health and economic implications

46. PBC 9: Number of other vulnerable people benefiting from the PTES in Other Governorates (US$50 million). This PBC will target to support the PTES expenditure covering a population subgroup who are: (a) 50 years of age or above; (b) non-HIO beneficiaries; (c) utilizing the PTES for hospitalization; and (d) residing in the poorest 11 governorates (by percentage share of the poor) outside of Phase I Governorates, namely Assyut, Sohag, Minya, North Sinai, Matrouh, Red Sea, Beheira, Qena, Beni-Suef, Giza, and Cairo.20 Low-income women are expected to benefit as they are more likely not to be insured and proportionally tend to spend more on health care compared to high-income women and men.

47. Component 4: Institutional Capacity Building, Technical Assistance and Project Management (US$10 million). This component will support TA, including capacity building and analytical activities for the establishment of the new UHIS. It will help strengthen capacity of the agencies responsible for implementation and supervision of project activities, including UHIA, HCO, GAHAR, EASPMTM, and the Economic Justice Unit (EJU) of the MOF. Project management and project monitoring and evaluation (M&E) will also be supported through this component.

(a) Project management and monitoring and evaluation (US$4 million). This will include support for the Project Management Unit (PMU), training for the MOHP and UHIA staff, contracting an Independent Verification Agent (IVA), financial auditors, and so on. The support to the PMU will involve supervision activities, contracting of additional required staff to the PMU, and costs of holding supplemental working groups.

(b) Strengthening the institutional capacity of the key relevant UHIS agencies involved in delivering the different functions of UHIS (US$6 million). It will also provide TA and research support for the rollout of UHIS, its pertinent financial and actuarial sustainability, and various project activities. Specifically, the component will support the following activities by agency:

(i) EJU at MOF (US$2.5 million). Within its capacity to monitor, evaluate, and follow up on the financial sustainability and results of the major MOF supported programs, the project will support the EJU to:

• Revise and update the actuarial model of the UHIS by Year 4 of the project and as stipulated by the UHIL;

• Conduct yearly studies to evaluate the efficiency of the existing financial revenues and for the UHIS to ensure the financial sustainability of the system. This will include exploring and assessing potential budgetary sources for the

20 HIECS 2018, CAPMAS.

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UHIS, their expected social and financial impact, as well as their impact on the efficiency of other existing general budget resources, when they materialize;

• Conduct institutional assessments of the four UHIS agencies (UHIA, GAHAR, HCO, and EASPMTM) in the first year of implementation which will inform the development of the organizational structure and multi-year staffing plan for each agency.

• Train staff on gender-sensitive data management (collection of gender- disaggregated data, development of gender analysis, and so on); and

• Strengthen capacity of designated staff on M&E functions for the UHIS.

(ii) UHIA (US$1.5 million). Within its role as a national payer for the UHIS, the project will support institutional capacity building for the UHIA to strengthen and enhance designated staff capacity on the following:

• Understanding UHC and health financing reforms;

• Business process definitions, design, and production of the business processes manual;

• Benefit package development, operationalization, and improvement;

• Health service provider contracting for both public and private facilities;

• Health service provider payment mechanism design;

• Costing of the health services;

• Pre-authorization functions to service providers;

• Claims processing;

• Data analysis and fraud control management using automated tools; and

• The usage, interpretation, analytics of the electronic dashboards of the UHIS information system and health care financing tools and analytics.

(iii) HCO (US$500,000). Within its mandate for operating all public primary care facilities and secondary and tertiary hospitals, the HCO capacity will be strengthened through:

• Improving its governance and management of health care institutions;

• Improving its internal financial systems and capacity within the costing, claims, and internal audit departments;

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• Building the capacity of the Human Resources Department through staff training and developing staffing and staff compensation plans for the organization including relevant KPIs;

• Development of streamlined internal clinical protocols across affiliated facilities; and

• Conducting a study on institutionalizing a homecare-based model of care of nursing and physiotherapy.

(iv) GAHAR (US$1 million). The project will support GAHAR to: (i) realize its role as the accreditor, quality auditor, and regulator of the UHIS for both public and private sector health providers, and (ii) achieve key priorities in its strategic plan. The following areas in GAHAR’s plan will be supported:

• Health care accreditation and registration program. Complementing the project results-based support through PBC 5 for finalization, adoption, and field implementation of the accreditation tools, the project will also support the surveying capacity of GAHAR for accreditation purposes by training 30 surveyors and financing nearly 100 surveying visits to different types of provider facilities.

• Clinical governance program. The project will support: (i) phased development of clinical standards, guidelines, and protocols for clinical services; (ii) training and continuous development of nearly 100 clinical auditors; (iii) development of a clinical audit process design; and (iv) development of clinical measures, data collection, and reporting mechanisms.

• Egypt Certified Auditor Program (EGYCAP). Aiming at training staff affiliated with different health care providers on developing internal quality auditing skills, the project will support the curricula setting, trainer readiness of the EGYCAP, and the selection, training, and certification of 50 graduates in the early phases of the program.

• Self-Assessment Program. The project will finance the development of the required tools and technical skills of 10 GAHAR staff on the institutional self- assessment mechanisms with a view to strengthening internal audit and anti- corruption functions.

(v) EASPMTM (US$500,000). This agency will be responsible for procuring pharmaceuticals, consumables, and medical equipment as well as managing the efficient use of medical technology within all publicly owned health care facilities and hospitals, including those which are funded by development partners (DP). With bulk purchasing, the EASPMTM is expected to have negotiation power for better prices of pharmaceuticals, consumables, and equipment. The negotiated price will also be available for private sector facilities so that private health facilities benefit from the

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UHIS bulk purchasing. The organization will also carry out the functions of Health Technology Assessments (HTAs) on behalf of all public health care facilities. In this context, the project will support:

• Establishment and operationalization of an International Medical Procurement Department (IMPD) within the organizational structure of the EASPMTM. The support will enable the IMPD to handle procurement based on international best practices, including those used by DPs. Specifically, the project will support: (i) development of IMPD procedures and regulations (for example, regulation on the participation of the private health providers in the EASPMTM procurement); (ii) selection and training of staff on national and international procurement regulations; (iii) acquisition and installation of appropriate procurement IT software and hardware equipment and training on use of said equipment; and (iv) on-the-job training during actual procurement activities. The World Bank procurement specialists will be engaged in such capacity building activities.

• Institutional capacity building of the HTA unit for handling advance evaluations of various health technologies. The project will support: (i) the selection and technical capacity building of staff, (ii) partnering with a world renowned HTA academic institution for technology and skill transfer training to designated staff, and (iii) acquisition and installation of appropriate IT software packages and office computers.

48. Component 5: Contingent Emergency Response Component (CERC) (US$0 million). In the event of an eligible crisis or emergency, the project will contribute to providing immediate and effective response to said crisis or emergency. This component would draw from uncommitted loan funds from other components to cover the emergency response. To facilitate a rapid response, in case the CERC is activated, the restructuring of the project is deferred to within three months after the CERC is activated.

49. Project costing and financing. The total project cost is US$2.837 million. Of this, the UHIS program is projected to cost around US$2.787 billion in Phase I Governorates between 2019 and 2024 (see the economic analysis section for details). Priority areas described above (under project components) are costed as follows: (a) reimbursing the MOF for the premiums paid to the UHIA on behalf of vulnerable citizens in Phase I Governorates (5 percent of the minimum salary, as stipulated by the UHIL), and (b) contributions paid to the UHIA, GAHAR, HCO, and EASPMTM by the state treasury as the employer of on- budget civil servants. Based on the MOF actuarial study, these expenditures are expected to exceed the amount to be financed by the World Bank loan. In addition, US$50 million will provide temporary financial protection against high OOP health expenditures for vulnerable populations outside Phase I Governorates through the PTES.

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Table 6. Project Costing per Component

Project Components IBRD Financing (US$, million)

Component 1: Enrollment and empanelment of the population into UHIS 208

Component 2: Strengthening UHIS governance, systems and facilitating 132 environment Component 3: Provide temporary financial protection against high OOP health 50 expenditures for vulnerable populations outside Phase I Governorates Component 4: Institutional Capacity Building, Technical Assistance and Project 10 Management Component 5: CERC 0

Total Financing through IBRD loan 400

50. Eligible expenditure category (EEC). For Components 1 and 2, EEC supported by the project reflect both the investment and recurrent costs that are assumed to be implicitly priced into the premium payment amounts, including:

• Non-salary operating costs of (a) relevant MOF departments involved in the UHIS, (b) UHIA, (c) GAHAR, (d) HCO (this includes just the HCO and not the providers it will be responsible for), and (e) EASPMTM. Specifically, the budget line items covered in each respective agency will be the following:

o Chapter 1: (Compensations and Benefits) for allowances and employer premium contribution for civil servants in Phase I Governorates, budget lines (Code No. 21110101 to Code No. 21140101). These are new budgetary contributions that are expected to finance the initial setup of the UHIS.

o Chapter 2: (Goods and Services) for training, per diems, transportation, and consulting activities in different organizations, respectively (Code No. 21210100 to Code No. 212211012).

o Chapter 4 (Subsidies, Grants, and Social Benefits) allocated to premium subsidies for the vulnerable and PTES budget lines (Code No. 21430301 to Code No. 21450101).

o Chapter 6: (Capital Investments) allocated for programmatic operational costs and consultancy contracts (codes for relevant investment projects).

• Premium subsidies for the vulnerable and employer premium contribution for civil servants in Phase I Governorates

• UHIS-related consultancies and training.

51. For Component 3, the EEC will be subsidies for the PTES (a chapter 4 program) out of the national central budget for the non-Phase I Governorates under the UHIS.

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C. Project Beneficiaries

52. The proposed project will benefit, directly and indirectly, the entire population of Egypt, particularly the poor and vulnerable. The proposed project will target the entire six Phase I Governorates. These six governorates have around 6 million population, with over 36 percent of the population living below poverty line and having difficulties in access to quality care. With this project supporting implementation of the mandatory UHIS and contributing to the subsidized enrollment of vulnerable people, the population will have better financial protection and improved access to quality health services at public and private health facilities and are likely to improve their health status. The project will also improve the quality and capacity of health facilities, and regulatory bodies, in the six Phase I Governorates and at the national level. With experiences and lessons gained on the UHIS, this project will pave the way for the smooth implementation of the comprehensive UHIL in subsequent phases, eventually covering the whole country as committed by the GOE. Further, the project will benefit the vulnerable populations in non-Phase I Governorates who have been affected the most by the COVID-19 outbreak. Those would include persons above the age of 50 who reside in the poorest non-Phase I Governorates of the UHIS and are utilizing secondary/tertiary health care services through the PTES. This support will offer financial protection against high OOP health expenditures that may, if left unsupported, aggravate poverty levels in those population segments.

53. The project is expected to benefit health workers at all levels of government institutions through enhanced governance, institutional capacity building, and improved social and environmental measures. The project will support system improvement activities at the national, governorate, district, and village (PHC) levels, which will contribute to enhanced capacity and better working conditions for health workers.

54. Private sector players will also benefit from the project through various market-enabling activities in the UHIA, GAHAR, and EASPMTM: (a) one-stop-shop for easier private provider licensing, (b) alleviation of regulatory restrictions and bureaucracy for enhanced private sector participation, (c) transparency and fair competition in health facility accreditation and contracting, (d) establishing of robust and efficient payment mechanisms to reward quality of care and encourage market competition, and (e) benefit from market power of the EASPMTM in negotiating better prices for pharmaceuticals and supplies.

55. The project will also benefit all foreign non-Egyptian residents in the six governorates, including refugees. The UHIS provides for enrollment, through different mechanisms, of non-Egyptian persons to benefit from the improved health services and financial protection that the UHIS will offer. The project will also indirectly benefit the Egyptian expatriate community around the world as the UHIS system will engage in reciprocal international agreements for cross-enrollment of mutual respective citizen populations with other country systems that have a substantial expatriate Egyptian population as stipulated in the UHIL.

56. Furthermore, the project is making substantial investments in environmental and climate measures by: (a) developing and adopting a Green Health Insurance System, that is incorporating environmentally friendly practices including those that address the effects of climate change, which will include introducing energy efficiency measures, decreased use of non-recyclable materials, and enhanced waste management (medical and nonmedical) that will be rolled out nationwide; (b) improving resilience

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of the population by reducing their high OOP health expenditures by providing them with enhanced affordable and accessible health services that also cater to the ill-health effects of climate change; and (c) improving the availability of quality health services at the local level, decreasing the frequency of travel and time required for seeking care at distant facilities and hence minimizing gas emissions.

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D. Results Chain Figure 4. Theory of Change for the Proposed Project

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E. Rationale for Bank Involvement and Role of Partners 1. 57. The World Bank Group has several comparative advantages, including the ability to: (a) leverage the long history of engagement and solid understanding of the health sector in Egypt; (b) bring global expertise on health insurance design, rollout, and reform to the Egyptian context; (c) promote private sector participation and create markets through engagement with IFC, the private sector arm of the World Bank Group; and (d) leverage World Bank engagement in other sectors (such as macro-fiscal, financial, social protection, and environmental) in Egypt to facilitate project implementation.

58. The World Bank has a long history of both financial assistance and TA to Egypt and is largely viewed as a leader in this field with considerable convening power. This includes support through TA and five loans: (a) the National Schistosomiasis Control Project (1993–2002); (b) the Population Project (1998–2005); (c) the Health Sector Reform Program (1998–2009); (d) the Health Insurance Systems Development Project (2009–2018), renamed through restructuring in 2014 as the Healthcare Quality Improvement Project [HQIP]); and (e) TEHSP (2018–2023).

59. The World Bank has produced several detailed analyses of the health sector in Egypt. These include: Health Public Expenditure Reviews (2005, 2014, and 2018); Health Policy Notes (2006); Role of Social Changes Agents in Increasing Demand on Health Services (2007); Study on Quality of PHC Services in Alexandria and Menofia (2010); Understanding and Exercising Rights to Family Planning in Egypt (2013); A Roadmap to Achieve Social Justice in Healthcare in Egypt (2015); and Viral Hepatitis Program Support Series (2017). It has engaged with the Egyptian authorities on health financing, service delivery, and health outcomes and, as such, this project is a natural extension of this work.

60. Development Partners. Early coordination and engagement with other DPs to ensure consistency and harmonization in responding to the financial and technical needs of the UHIS is critical. Other DPs that are providing technical and financial support to the GOE for the UHIS include the French Development Agency (AFD) financing of EUR 60 million focused on supporting the system’s main legal pillars through the issuance of both the UHIL and its executive decree; and the WHO that is providing on-time TA to the UHIS through technical advisers to assist with facility management. In addition, the Japan International Cooperation Agency (JICA) is exploring opportunities to engage in parallel financing with the World Bank using a results-based funding modality. Discussions are underway with DPs to ensure harmonization and alignment of the UHIS support, including through joint client engagements and joint missions.

61. Private health care corporations and NGOs. As a response to the call by the MOHP for the private sector and NGOs to be involved in the UHIS early on, multiple players have pledged and are providing support utilizing various corporate social responsibility and charitable initiatives to the Port Said pilot. Memoranda of Understanding were signed between the MOHP and leading hospital groups such as Cleopatra Group, Al Maghrabi Eye Hospitals, and Almeada Group to provide advisory, quality enhancement, and managerial support functions to public hospitals. This has included the co-branding of certain public hospitals to instigate and foster a positive brand recognition by the local population. Multiple national NGOs were tasked with performing community awareness campaigns on the importance and benefits of the UHIS with plans underway to expand their participation in the enrollment of beneficiaries as well.

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Table 7. The Role of the World Bank Group and Other Partners in Support of the UHIS

ystems

wareness

UHIL

uilding

S

apacity

A

roviders

Quality Quality

B

opulation upport to

C

P

Standards

IT IT

S

P

Managerial

Coverageof

Institutional

mprovement

Participation

Accreditation

I

Private Sector Private

and Communication

World Bank Group X X X X X X X IFC X X X X JICA X X X X AFD X X X X WHO X X X Private Sector Hospitals X X X NGOs X

F. Lessons Learned and Reflected in the Project Design

62. The project design has been informed by key lessons learned from global experiences in supporting social health insurance (SHI) systems, the approach to private sector inclusion in the health care system as well as lessons from previous World Bank-financed operations, including the experience from the recent World Bank-financed HQIP, which closed in June 2017, and the ongoing TEHSP that became effective on September 2018. Global experiences in establishing SHI including from India, Thailand, Croatia, and China were shared with the GOE in a workshop in February 2020 so as to inform the GOE’s reform process. The World Bank technical experts have managed SHI schemes in various countries and incorporated the lessons learned in the design of the proposed operation.

63. Government commitment at all levels is critical. Government commitment including strong political backing at the highest level needs to be translated into concrete measures to ensure effective implementation for a well-defined program. The buy-in and ownership of the top- and middle-level leadership is also important for project oversight, coupled with a dedicated PMU team, composed of government staff and external consultants who have an explicit mandate to work on the project. This was the lesson learned under the HQIP and TEHSP where involvement and stewardship from the President’s Office, the ministerial levels, and the project manager enabled the restructured HQIP project to be implemented in record time. The design of implementation arrangements of the proposed project, therefore, specifically provides for a strong PMU established within the MOF, and representations of the various supported agencies, with key staff already being preselected to lead relevant parts of the project, as well as many highly trained professionals (contracted staff) to mainly focus on the core fiduciary, safeguards, and monitoring functions. These contracted staff are expected to be in place within one month of loan effectiveness.

64. A legislative and regulatory framework needs to be in place. At the beginning, the HQIP suffered from major delays, in large part, because the UHIL had not been approved while the project was meant to support the implementation of a health insurance system to be provided under the law. By contrast, the proposed project will be implemented within a mandate provided under the UHIL.

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65. In implementation of complex reforms, realistic expectations for fast and successful implementation and project timetables are important. These lessons have been at the forefront of the thinking of the World Bank and that of the GOE. To ensure that past mistakes are not repeated, the World Bank has engaged closely with all relevant government counterparts in ensuring that the project timetable is realistic and in preparing a detailed cost table and identifying institutional capacity building and TA needs that would be critical for the successful implementation of the project. The GOE and the World Bank have committed to remain focused but flexible and will continue to work closely to maximize efficiency while maintaining the necessary technical quality of the project design. Given the extensive technical support needs that will be required to support such a complex reform, there will be a need for World Bank TA. Discussions are underway with the UK Government to provide funding for technical support.

III. IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements

66. The project will be implemented by the MOF through a PMU that will include government and contracted staff. The PMU will be established not later than three months after loan effectiveness. The PMU will be headed by a Project Manager, under the supervision of the MOF EJU, and will be responsible for day-to-day project implementation, overall fiduciary activities, documentation, contracting of consulting and non-consulting services, M&E, and reporting to the MOF and the World Bank on all aspects of the project. An experienced FM consultant with a TOR acceptable to the World Bank Group will help train and transfer knowledge to the appointed staff. The Project Manager will be responsible for formally evaluating the performance of the PMU staff. The PMU will prepare and submit semiannual progress reports to the World Bank that, among others, provide detailed reporting on project progress by components, procurement, FM, verification reports received from the IVA, and environmental and social aspects. In addition, an annual external audit, combining both technical and financial audit components, will be conducted to ensure the appropriate use of funds and to monitor physical progress in the targeted activities and governorates. The detailed roles and responsibilities of the PMU staff will be outlined in the POM to be adopted not later than three months after loan effectiveness. The POM will clearly indicate the staff reporting structure and the separation of responsibilities among staff in the PMU, including indicating the personnel authorized to sign the Withdrawal Applications, safeguarding assets, record keeping, monthly account reconciliation, and so on. The POM is a living document and will be adjusted during implementation to reflect any changes made, either in design, implementation arrangements, or fiduciary oversight. The PMU will be responsible for coordinating the achievements of PBCs and other implementation activities with the other units and directorates within the MOHP. The PMU will have dedicated M&E staff who will be responsible for regular data collection and analysis, regular reporting on the status of the Results Framework indicators including reporting on PBCs, and disseminating lessons from the project. Achievement of PBCs will be verified by an IVA.

67. An SC will be established not later than three months after loan effectiveness. The SC will be responsible for overall project stewardship, oversight, and monitoring of implementation progress. It will include heads of the main agencies involved in the UHIS (UHIA, HCO, GAHAR, and EASPMTM) and representatives from relevant ministries (MOF; MOHP; and Ministry of Planning, Monitoring, and Administrative Reform). It will be chaired by the Minister of Finance, with the PMU coordinator serving as

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the secretary. The SC will meet at least every six months, and its main tasks will be to: (a) review policy issues relevant to the achievement of project objectives, (b) approve annual work plans and budgets, and (c) review project progress reports and take appropriate actions to support project implementation.

B. Results Monitoring and Evaluation Arrangements

68. The project will be monitored and evaluated based on the systematic use of data, indicators, and targets set out in the RF and PBC verification protocol. The PMU will have a dedicated M&E staff responsible for: (a) regular data collection, analysis of data, and regular reporting on the status of the RF indicators; (b) managing of the IVA responsible for the independent verification of PBC achievement; (c) contribution to the semiannual progress reports to the World Bank, which would include updates on the latest progress against RF indicators as well as PBCs; and (d) operational research for learning and disseminating lessons from the project. A detailed M&E system and plan will be developed and included in the POM. The M&E system will provide for a feedback loop to other members of the PMU to help with implementation course adjustments. The ministry staff at the central, governorate, and district levels will carry out implementation support missions to Phase I facilities supported by the project.

69. Verification of PBCs. The project will finance the services of the IVA, which will have the necessary level of independence from project implementation and the credibility and authority to lead the verification process. The IVA will be appointed not later than three months after loan effectiveness

C. Sustainability

70. The sustainability of the UHIS after project closure will depend on the interaction of different factors and risks. With strong political commitment, the GOE has developed a multi-year implementation plan as outlined in the UHIL. Four new agencies in charge of UHIS implementation will remain for the long term. The operation processes, IT systems, institutional capacity, and social inclusion mechanisms set up during the project implementation period are likely to remain functional in the long term. Project sustainability is expected to be achieved through: (a) building capacity of the UHIS agencies, (b) strengthening governance and regulations, (c) rolling out data systems and knowledge management programs, and (d) expanding private sector participation. As described in the economic analysis section, actuarial projections support the financial sustainability of the UHIA for another eight years after the project completion, but also flag the need of additional revenue generation and cost containment strategies in the long term. However, given a post-COVID-19 economy, many of the model assumptions would be tested. The GOE is currently exploring additional types of taxes as a potential future revenue generation mechanism. Exploring feasible options during the project implementation period will help improve long-term sustainability of the UHIS. Another type of risk is around the uncertainty of public acceptance, health care utilization growth, quality of care, and impact on the private health care market. Once data become available after implementation, these need to be carefully assessed. In addition, several types of general risks that may affect future sustainability beyond project period need to be closely monitored and mitigated, including: (a) macroeconomic risk, (b) fiscal risk, and (c) potential resistance toward public institutional reforms.

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IV. PROJECT APPRAISAL SUMMARY

A. Technical, Economic and Financial Analysis

71. The technical soundness of the overall design of the project is reflected both in its alignment with country health priorities and incorporation of lessons learned and recommendations from recent work and global experiences.

(a) Alignment with key needs and priorities. In 2015, the World Bank analyzed key barriers to improving Egypt’s health system performance and enhancing equitable health outcomes for poor families, children, and women. The analysis underscored the need to: (i) provide financial protection against OOP health care expenditures, (ii) improve the quality of health services at the first and second levels of care, and (iii) provide better inclusion of private sector players. The approval of the UHIL in 2018 represents a key milestone in health system governance, which along with the commitment to improve access, coverage, and commitment to the fiscal implications of the UHIS rollout, opens a unique window of opportunity to improve health system performance. The political commitment to roll out the UHIS at the highest levels of government is expected to keep continued momentum on better financial protection in health.

(b) Leveraging successful implementation strategies. The soundness of the project design is further supported by successful strategies that have achieved concrete results in the country over the past two years. The launch of Egypt’s Elimination of Viral Hep C Plan and systematic investments in quality improvement at MOHP facilities, both of which were financed by the World Bank and implemented by the GOE, have begun the process of transformation of key aspects of health system performance. Moreover, the project’s support to increased coverage, financial protection, and institutional building are fully aligned with new global trends to provide UHC that offers effective coverage, quality services, and financial protection to everyone. The project is expected to boost Egypt’s rankings with regard to coverage and financial protection rates. The anticipated improvements in health outcomes will further enable Egypt to attain its Sustainable Development Goals and Human Capital Index target.

72. Economic analysis. Globally, SHI programs are found to have significant social and economic impacts. This section aims to assess: (a) the various aspects of the UHIS’s economic impacts; (b) the cost, health benefit, human capital impacts, cost-effectiveness, and the return on investment of the project; (c) the medium-term financial sustainability of the UHIS program in the Phase I Governorates within the project period; and the (d) the long-term sustainability of Egypt’s UHIS national rollout.

73. The UHIS is likely to contribute to Egypt’s poverty reduction, labor force productivity, and economic growth, which rationalize the need for public investment.

(a) Poverty reduction. Egypt has a poverty rate of 32.5 percent.21 The Egyptian health system currently relies heavily on OOP payments. With lower ability to pay, the poor have greater

21 HIECS, CAPMAS, 2017–2018.

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difficulties in accessing health care services. Therefore, they are more likely to have poor health, disabilities, and lower productivity, leading to a vicious cycle of poverty. Globally, medical impoverishment is also increasingly being documented. As tracked by Sustainable Development Goal indicator 3.8.2, the global incidence of high OOP spending increased by 3.6 percent a year between 2000 and 2015, using the 10 percent income threshold, and the increase is as high as 5.3 percent per year using the 25 percent income threshold. 22 Introduction of the UHIS can contribute to poverty reduction as its design favors the poor. Not only does the GOE subsidize the poor from general tax revenue, but also the premium contributions (a fixed percentage of salary) from the non-vulnerable groups and the solidarity tax (a fixed percentage of corporate revenue) collect a larger contribution from the wealthier corporates and individuals to cross-subsidize the poor. This improves social justice and reduces the financial burden on the poor. Insurance coverage will also reduce medical impoverishment among the poor and near-poor population (estimated at a further 20 percent).

(b) Labor force productivity and labor market mobility. While ill health results in huge productivity losses due to early death, loss of employment opportunities, and absenteeism, SHI is a good way to increase labor force productivity. The detailed estimates are included in the cost-effectiveness analysis. Furthermore, it guarantees financial protection regardless of where people live or their employment status, making it easier for people to change jobs and take advantage of new opportunities.

(c) Boost health sector growth. The health sector is an important sector of the economy. Globally, SHI increases demand for health care, which leads to growth in the public and private health sector, attracting more employment and investment. The planned salary increases and infrastructure upgrades in public health facilities by the GOE are also likely to rapidly expand the public health sector.

74. To quantify the economic impact of the UHIS as well as the medium-term and long-term financial sustainability, three models were developed, including a medium-term cost and revenue analyses on Phase I Governorates, a cost-effectiveness analysis on Phase I Governorates, and a long-term cost and revenue analysis on the nationwide UHIS rollout. After a short transition period when the MOF supply-side budget and UHIA co-finance medical care in Egypt, the UHIA is expected to eventually become a self-sustaining public single payer organization for public and contracted private medical care in Egypt. Therefore, the analysis of cost, revenue, and expenditure of the UHIS are focused on the UHIA, while the health and economic impact analysis covers the whole health care system.

75. During the project implementation period, the UHIA cost is estimated to be around US$2.79 billion. As a typical public payer organization, most of the UHIA cost will be claims payout. Historical medical cost data and assumptions on cost growth and inflation were used. With the phased rollout plan and gradual scaling up in each governorate (60 percent to 70 percent to 80 percent), the UHIA cost is estimated to increase from EGP 5.61 billion in FY20 (2.2 percent of Egypt’s 2018 GDP) to EGP 13.23 billion

22 https://www.who.int/healthinfo/universal_health_coverage/report/fp_gmr_2019.pdf?ua=1.

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in FY24 (5.3 percent of Egypt’s 2018 GDP), and totaling EGP 47 billion or US$2.79 billion assuming a 7 percent annual discount rate (table 8).

Table 8. Projected UHIA Revenue and Expenditures in Phase I Governorates (FY20–FY24), EGP billion UHIA Revenue UHIA Cost Employer Other Claims Phase I Government and Annual Year Revenues (Excluding Governorates Subsidy to Employee Balance Reserves (including Co- Premium Premium Tax) payment) Contributions FY19 Port Said 0.00 0.00 6.29 0.00 6.29 6.29 (Actuals) Port Said, FY20 Ismailia, and 1.49 2.09 7.96 5.61 5.93 12.22 Luxor Port Said, Ismailia, FY21 Luxor, Suez, 2.65 3.67 10.29 11.20 5.42 17.64 Aswan, and South Sinai Port Said, Ismailia, FY22 Luxor, Suez, 2.72 4.25 10.29 12.22 5.05 22.68 Aswan, and South Sinai Port Said, Ismailia, FY23 2.79 4.57 10.29 12.91 4.74 27.42 Luxor, Suez, and Aswan Port Said, Ismailia, FY24 Luxor, Suez, 2.86 4.68 10.29 13.23 4.60 32.03 Aswan, and South Sinai Total in billion EGP (discounted 13 17 43 47 23 95 to present value) Total in billion US$ (discounted 0.74 0.97 2.52 2.79 1.34 5.61 to present value) Source: Estimation based on UHIA revenue, UHIA program rollout plan, and assumptions. US$1 =EGP 17.

76. The UHIA is projected to generate a significant amount of revenue to offset its cost, indicating medium-term financial sustainability of the UHIA in the six Phase I Governorates within the project period (FY20–FY24). The analysis used UHIA actual revenue data for FY19, and assumptions on health

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expenditure, inflation, and investment return. It was assumed that contributions from employers, employees, and government subsidy will increase with program rollout in more governorates. Yet, other revenues from nationwide taxes and fees are not expected to significantly increase after 2021. In all years, based on World Bank staff estimates, UHIA revenue is expected to be significantly higher than claims values, resulting in large annual balances and accumulation of reserve (table 8). In addition, the six Phase I Governorates only account for a small proportion of the Egyptian population (around 6 percent), and a small share of Egypt’s public expenditures on health (4.7 percent in FY18 and 4.5 percent in FY17). Therefore, program implementation in these governorates is unlikely to incur a financial risk to the GOE.

77. The UHIS is expected to cover nearly 6 million beneficiaries in six Phase I Governorates, enhancing access to health services, reducing disease burden, and contributing to better health outcomes. In modeling program health benefits, assumptions were made on program rollout, population growth, enrollment rate, and program effectiveness. Egypt-specific disease burden data were from the 2016 Global Burden of Disease. Disease burden is commonly measured in disability-adjusted life years (DALYs). One DALY lost can be thought of as one lost year of healthy life. Therefore, health outcomes improvements due to the program are approximated using reduction in number of DALYs lost. Globally, there are wide variations in the impact of SHI programs on health service utilization and improvement in health outcomes. The analysis therefore modeled three scenarios: low (5 percent reduction in DALYs lost), base (10 percent reduction in DALYs lost), and high (20 percent reduction in DALYs lost). Given the phased enrollment approach, the program is expected to reach a coverage of 2.7 million beneficiaries in FY20 and nearly 6 million by FY24 (table 9). Assuming the program would improve health outcomes by 10 percent (measured as 10 percent reduction in DALYs lost among beneficiaries), the program would reduce 677,539 DALYs lost over a five-year time horizon, that is, save 677,539 years of healthy life.

Table 9. Estimated Program Coverage, Costs, and Health Benefits (Phase I Governorates) Total Total Medical DALY Lost DALY Lost DALY Lost Fiscal Year Beneficiaries Claims (US$, Reduction Reduction Reduction (high) Enrolled millions) (low) (base) FY20 2,669,220 330 37,485 74,970 149,941 FY21 4,847,463 659 68,075 136,151 272,301 FY22 5,290,591 719 74,298 148,597 297,194 FY23 5,587,951 759 78,474 156,949 313,898 FY24 5,727,649 778 80,436 160,872 321,745 Total (present value) — 2,787 338,770 677,539 1,355,078

78. By improving population health, the UHIS will increase Egypt’s human capital and labor force productivity. The economic value of these are estimated using both a ‘human capital approach’ and a ‘statistical value of life’ approach:

(a) Human capital approach. Health condition has long been linked to loss of productivity due to premature death at productive ages, absenteeism, presentism, and compromised ability to find high-paid jobs. Among people with one health condition, the productivity loss can be 10 days a year, and for those with two or more health conditions, the loss can be up to 23

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days per year. 23 With an average annual market wage of round US$3,600, the annual productivity loss due to health conditions for an average employee in Egypt ranges between US$100 to US$227 per year. The total productivity loss among the 3.3 million employees expected to be enrolled in the UHIS in the six Phase I Governorates would be around US$376 million per year, equivalent to 0.15 percent of Egypt’s 2018 GDP. Conservatively assuming the UHIS would reduce an employee’s productivity loss due to health conditions by 10 percent, the total productivity saved would be US$37.6 million per year in the six Phase I Governorates, equivalent to 0.015 percent of Egypt’s 2018 GDP.

(b) Statistical value of life approach. The concept of ‘value of statistical life’ (or life-year) can be used to monetize the health benefits of the UHIS program, assuming the value of statistical life is three times the GDP per capita. Egypt’s GDP per capita in 2018 was US$2,573. Applying this monetary value to a conservative estimate of 677,539 DALYs gained by the UHIS program from FY20–FY24, the total health benefits of the program is over US$1 billion in economic value each year on average, or 0.5 percent of Egypt’s GDP in 2018.

79. The UHIS program is likely to be cost-effective and have a significant return on investment. From FY20 to FY24, the total program cost is estimated around US$2.79 billion, after converting future costs to present value using a 7 percent annual discount rate. With 677,539 DALYs reduction, the cost of averting 1 DALY lost by the program is US$4,113 (table 10). Globally, commonly used thresholds to identify cost- effective interventions and programs are based on GDP per capita: ‘very cost-effective’ defined as cost per DALY less than GDP per capita, and ‘cost-effective’ defined as cost per DALY less than three times the GDP per capita. Egypt’s GDP per capita in 2018 was US$2,573. Therefore, the UHIS program is likely a cost- effective program. For every US$1 investment in the program, return is around US$2.

Table 10. Cost-effectiveness and Return to Investment Total Return to Incremental Cost- Assessment Health Impact of Medical DALYs Lost US$1 of effectiveness Ratio Against Common Health Insurance Costs (US$, Averted Investment (Cost/DALY) Benchmark billion) (US$) Base (10% 677,539 4,113 Cost-effective 2 improvement) Low (5% 2.79 338,770 8,226 Not cost-effective 1 improvement) High (20% 1,355,078 2,057 Very cost-effective 4 improvement)

80. Beyond the project scope, a comprehensive actuarial model developed by the MOF finds that the UHIS nationwide scale-up will be financially sustainable over the longer term (from FY19 to FY33), that is, the revenue will be sufficient to cover health care services provided by both public and private sector facilities under the UHIS. The MOF conducted an actuarial modeling study in 2017 (table 11) which was updated in 2019. The study included various inputs, such as UHIA revenue; demographic information (population, population growth, and mortality); labor force information (wage, retirement, and labor

23 Mitchell, Rebecca J., and Paul Bates. 2011. “Measuring Health-related Productivity Loss.” Population Health Management 14 (2) : 93–98.

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force participation); health expenditure (per beneficiary health expenditure, annual growth rate); enrollment and utilization rates; economic information (inflation, interest rate, and GDP growth); and a phased implementation plan.

Table 11. MOF Actuarial Model Inputs and Data Sources Parameter Inputs Data Source Number of enrolled Projected UHIS implementation plan by Estimates beneficiaries governorate Estimated enrollment rate by year Estimates Population and population projection Estimates based on census data, fertility, and mortality rate projection Labor market participation Labor surveys Health expenditure per EGP 2,100 per year in 2020 Expenditure and claims data from old beneficiary public health insurance scheme and private health insurance scheme Enrollment rate 70% for employees and 90% for Enrollment target subsidized population Tax revenue 0.07% of GDP MOF historical data Inflation 7% MOF projection Wage increase 1.50% Assumption Medical inflation 7% Assumption Return to investment Inflation + 4% CBE data and assumption Incidence rate 6.9% for inpatient and 348.5% for Historical data and projection outpatient Cost of care SHI pricelist Co-payment 0 for inpatient, 5% for test, 10% for UHIL imaging, and 20% for OOP drugs Utilization rate 80% Assumption

81. As shown in table 12, the study projects that between 2019 and 2030, the UHIA’s annual revenue will be enough to cover its annual expenditures. Only starting from 2031 will the UHIA start to have negative cash flow and may need to rely on its reserve and require additional resource mobilization. The estimated claims ratio (claim/premium) ranges between 1.34 to 1.64 across the years, with earmarked tax revenues playing an important role in subsidizing the scheme.

Table 12. Projected Long-term Revenues and Expenditures of the UHIA with Nationwide UHIS Implementation

Contribution Other Annual Population Claims Reserves Including. Revenue Balance Claims Year Enrolled (EGP, (EGP, Subsidy (EGP, (EGP, (billion Ratio (million) billions) billions) billions) billions) EGP) 2019 1.00 1.23 15.79 1.96 15.01 15.01 1.64 2020 3.11 4.15 19.08 6.43 16.57 31.58 1.6 2021 5.73 8.32 25.27 12.54 20.59 52.17 1.56 2022 6.29 9.91 29.97 14.52 24.8 76.98 1.52 2023 14.95 25.57 35.84 36.40 23.56 100.54 1.48

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Contribution Other Annual Population Claims Reserves Including. Revenue Balance Claims Year Enrolled (EGP, (EGP, Subsidy (EGP, (EGP, (billion Ratio (million) billions) billions) billions) billions) EGP) 2024 26.68 49.60 45.55 68.36 23.92 124.45 1.44 2025 31.08 62.79 52.57 83.61 28.04 152.49 1.39 2026 49.69 109.12 60.83 140.01 23.38 175.88 1.34 2027 56.52 135.02 73.12 175.22 24.67 200.55 1.36 2028 57.31 149.01 81.70 195.53 25.92 226.47 1.37 2029 65.19 184.47 91.51 244.79 19.52 245.98 1.39 2030 73.72 227.12 102.18 304.76 9.91 255.89 1.41 2031 90.49 303.52 112.91 411.99 −15.45 240.44 1.42 2032 100.83 368.34 121.55 505.76 −40.45 199.99 1.44 2033 108.37 431.11 128.87 598.92 −68.2 131.79 1.46 Source: MOF actuarial study (2019). US$1=EGP 17.

82. While no significant financial risk was identified for the project, several factors may affect the projected long-term financial sustainability, and will need to be regularly assessed during implementation and incorporated into the long-term UHIA sustainability mechanism. First, given the claims ratio of around 1.6, in cases of accelerated program implementation, the UHIA reserve may get exhausted faster than currently projected. Second, global experiences have shown that per capita health expenditures in real term typically increase overtime, with expanded availability of technology, population aging, and shift to output-based payment. Tracking trends of UHIS cost escalation is critical to adjust its sustainability estimates. Third, the macroeconomic outlook may affect the revenue generation and financial projections. For instance, any slowdown in economic growth may limit the collection of solidarity tax from companies. The model assumed a 7 percent inflation rate and 17 percent return on investment based on current data and future projections. If return on investment continues to decrease in the future, the UHIA’s revenue generation from investment of reserve fund may be compromised. Fourth, as is typically the case for SHI programs, estimating the demand increase in health services is challenging. The model assumed a moderate demand increase in response to health insurance. However, when actual service utilization data on service volume, service mix, and public-private mix become available, the model needs to be updated. It is recommended that the actuarial analysis gets updated every 2–3 years, based on which, any potential future financial risks can be flagged, and revenue mobilization strategies can be developed. Last, after completion of UHIS reform, the UHIA and MOHP public health budgets will be the major financial sources for health services in Egypt. In cases of major shocks to population health and health system, such as a pandemic, other health threats, and disasters, both the UHIA and MOHP may be stressed, calling for a forward-looking financial preparedness plan and emergency reserve built into the sustainability mechanism of the UHIA.

83. By mitigating the adverse effects of COVID-19 pandemic at a national level and expanding health services and financial protection to vulnerable populations in the non-Phase I UHIS Governorates under Component 3, the project in addition to its support through UHIS is likely to have further benefits. With approximately 500,000 people in non-Phase I Governorates likely to receive coverage for a two-year period as a temporary COVID-19 effect mitigation measure, the project is estimated to save 14,000 DALYs

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per year, converting to an economic value of US$108 million per year, and US$316 million over a two-year period of temporary COVID-19 mitigation measures.

B. Fiduciary

84. Financial Management (FM). The PMU will be responsible for the day-to-day implementation of the project. A ministerial decree will be issued to second fully dedicated staff to the PMU from the MOF finance department. An experienced FM consultant will be hired, based on terms acceptable to the World Bank, to train and transfer knowledge to the PMU staff. A PMU manager will be responsible for formally evaluating the performance of the seconded staff. Capacity building such as training and study tours will help incentivize MOF staff working on the project. For the capacity building mechanism to be eligible for financing under the project, clear guidelines and provisions will be included in the POM and agreed with the World Bank. This process will be fair, efficient, and transparent.

85. The POM will clearly show the staff reporting system under the project and will indicate the separation of responsibilities among PMU staff, including the authorized signatories to the Withdrawal Applications, safeguarding assets, record keeping, monthly account reconciliation, and so on. The POM is a living document and will be regularly amended, as needed, throughout project implementation.

86. The project will establish an automated accounting and management information system as a pilot, which may later be replicated by the MOF. The system output and the related levels of details generated by the system will be tailored to the client’s needs and will be compatible with the current MOF system. These will be agreed with the client before project effectiveness.

87. The fiduciary systems underlying health sector activities are governed by Egypt’s laws regulating the state budget, government accounting, and procurement. The annual budget calendar largely provides for orderly and timely budget formulation and appropriation. The enacted state budget and final account reports are made public. A predictive control system is implemented by MOF financial controllers stationed in line ministry accounting units. Accounting units across the central government use a financial management information system (FMIS) to record budget allocations and modifications, and to execute the budget. The MOF completed the automation of the FMIS in March 2018 and issued directives No. 2/2018 and 3/2018 with additional instructions on implementation mechanisms and controls. Monthly budget execution reports detailing expenditures and revenues are produced by budget entities and submitted to the MOF’s Final Accounts sector within 10 days after the end of each month. Annual final accounts are produced and audited within six months of fiscal year end.

88. PBCs will be verified by an IVA (entity/consultant), to be contracted by the GOE. EEs will be reported quarterly to the World Bank through interim financial reports (IFRs), whose design and content will be agreed with the MOF, as well as through an annual external audit.

89. Given the focus on EEs, the key FM risks include the lack of sufficient assurance/due diligence regarding the project-related expenditures. The main mitigating measures include: (a) the accurate definition of the project scope and funds flow arrangements; (b) focus on allocated subsidies controls in carrying out the internal audit function; and (c) the scope of the project’s external audit TOR and hiring of an IVA to verify the achievement of PBCs.

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90. EEs. While the PBCs were crafted to ensure that reform actions are progressing and systems are developed and functioning, the corresponding EEs are mostly geared to Chapter 4 budget lines with some EEs covering other budget lines, for example, Chapters 1, 2, and 6. Therefore, a challenge exists related to the comprehensiveness and relevance of such selections. Securing the appropriate capacity to competitively and transparently undertake this challenging task and its administration are critical measures for proper governance, effective delivery, and quality outputs.

91. Funds flow. The proceeds of the loan will be transferred to a Designated Account (DA) which will be opened in a bank acceptable to the World Bank. The project will use the DA mainly to manage the financing of expenditures under the IPF component(s). The DA will be denominated in US dollars and will be used for the sole purpose of implementing the project activities. With the rolling out of electronic payments for all government expenditures through the Treasury Single Account, payments are now taking place through e-payment requests by the disbursing entity to the Central Payments Unit at the MOF. DA payments will be segregated, traceable, reconcilable, and subject to financial audits.

92. For the project EEs incurred through the state budget, the World Bank will reimburse these expenditures according to the assigned values corresponding to the PBCs achieved with every verification cycle unless the amount of such EEs at the end of the cycle is less than the PBC values. In that case, the World Bank will cap the reimbursement to the amount of EEs. The reimbursement of EEs will be directed to the government budget account advised by the borrower.

93. Accounting and reporting. The envisaged expenditure list is mostly geared to Chapter 4 budget allocations. The pilot FMIS system will be capable of generating the quarterly IFRs and Annual Project Financial Statements Reports required under the Loan Agreement. The project will use the cash basis of accounting and maintains its books of accounts.

94. Internal control. The MOF expenditure control system is regulated by national laws, policies, and procedures. Ex ante review is consistently exercised by the assigned financial controller (representing the MOF) who is typically assigned as the second signatory to payments issuance. The complete automation of the records of all accounting units using the FMIS will help apply further controls on budget commitments. All financial and administrative records are subject to internal review and inspection by the Financial and Administrative Supervision Department. In addition, external oversight is conducted by the Central Audit Agency as well as the Central Agency for Organization and Administration. The TOR for the annual external audit will also ensure a thorough review of the project records and reporting thereon.

95. Auditing. The PMU will appoint an independent external auditor using TORs acceptable to the World Bank. The auditor will be responsible for auditing the project annual financial statements and review of the quarterly IFRs, which are due 45 days after the end of each semester and the audited project financial statements, which are due six months after the end of each financial year.

96. Retroactive Financing and advance payment. Up to US$80 million will be eligible for retroactive financing of EEs incurred up to a year prior to the signature date of the Loan Agreement. The project will also allow for an advance payment for PBC-based disbursements (Category 1) based on 6-month implementation forecast. While the advance amount will be considered at loan effectiveness, the initial advance may amount up to 25 percent of the Category allocation. The second one, for Category 2, will be initially set up at US$2 million. FM risk is rated Substantial. Based on the review of the fiduciary

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arrangements within the newly established entity, the inherent risks, the nature of the project design, the stakeholders’ interests involved, the expanded roles of units and directorates in achieving results, and the link to wider reform program activities that are beyond the project scope.

97. Procurement activities will be limited to TA under Component 4. The allocated amount under Component 4 will be used to finance capacity-building contracts, analytical activities for the establishment of the new UHIS, procurement of some IT equipment, and the IVA contract. No procurement activities are foreseen under Components 1,2 or3. The “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants” (Anti-Corruption Guidelines), dated October 15, 2006, and revised in January 2011 and as of July 1, 2016, will apply to project activities. All procurable project activities, whether linked to the PBCs or not, will be subject to the “World Bank Procurement Regulations for IPF Borrowers”, dated July 2016, revised November 2017 and August 2018 (Procurement Regulations).

98. Procurement risk is Moderate. Procurement will be carried out in accordance with the World Bank Procurement Regulations and the Loan Agreement. A simplified Project Procurement Strategy for Development and the Procurement Plan have been developed.

99. To mitigate foreseen procurement-related risks, the following measures are proposed: (a) the MOF will assign qualified and experienced procurement staff within the PMU to be responsible for managing and supervising all procurement activities under the project; (b) the POM will include detailed explanation of all procurement steps, decision-making, and management of records to integrate procurement processing; and (c) close support will be provided by the World Bank staff as needed.

100. Systematic Tracking of Exchanges in Procurement (STEP). The use of STEP is required under this project and all procurement activities/documents will be uploaded to the system. It will define the market approach options, the selection methods, and contractual arrangements, and determine the World Bank Group’s prior/post reviews. A draft Procurement Plan covering the first 18 months of the project period has been prepared by the MOF.

. C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . D. Environmental and Social

101. Mitigation measures are based on identified potential risks and impacts as identified in the environmental and social instruments prepared by MOF including the Social Impact Assessment (SIA) and the Stakeholder Engagement Plan (SEP). The MOF will implement the proposed mitigation measures to maximize social benefits and minimize potentially negative impacts as outlined in the Environmental and Social Commitment Plan (ESCP). .

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102. Environmental risk is Moderate. As the project will not support any health care supply-side activities or physical interventions including construction, rehabilitation, or provision of medical services, no major direct environmental risks are expected. The relevant ESSs were determined to be ESS1, ESS2, ESS3, ESS4, and ESS10.

103. Under PBR 8.3, a Green Health Insurance System Strategy will be developed in Year 3, to channel environmental benefits into better health care service provision, through developing performance standards. Those standards will incentivize health care facilities to adapt energy and resource efficiency measures. Health care service providers will be enrolled and accredited in the new health insurance system by meeting several performance standards developed by GAHAR including GAHAR’s Environment, Health, and Safety Standards (EHSS). The World Bank Group conducted a gap analysis between GAHAR’s EHSS and the World Bank Group Environmental, Health, and Safety Guidelines for health care facilities. The gap analysis concluded that the GAHAR EHSS and the national standards are aligned to a great extent with World Bank Group Environmental, Health, and Safety Guidelines for health care facilities in terms of management of environmental risks associated with health care services, including air emissions, hazardous materials and waste, occupational health and safety, infection control, and wastewater effluents.

104. The main indirect environmental risk during the rollout in Phase I is an increase in the generation of health care waste streams at the national level due to potential increases in health care service utilization. The project design has therefore integrated the preparation of a SESA in Year 2 to assess and examine the potential impacts of the rolling out of the UHIS at the national level. The development and implementation of SESA is committed to in the project ESCP. Additionally, at the governorate level, monitoring of different waste streams will be carried out and documented in the enrolled health care service providers and aggregated at the PMU level to be reported quarterly.

105. The project is expected to contribute to considerable positive results, including extending coverage to an estimated 6 million individuals in Phase I Governorates. The UHIS is expected to reduce the burden of OOP expenditures and achieve financial protection to virtually all citizens in Phase I Governorates during the project period. It will also offer noncontributory coverage for disadvantaged groups,24, who are estimated to be more than 2 million people in the Phase I Governorates. Exemption of these groups from paying both premiums and co-payments is expected to encourage them to utilize health care, whenever necessary, and protect them from getting trapped in poverty due to OOP expenses and loss of livelihood due to illness. The project will contribute to reducing the gap between women and men in terms of health insurance coverage as well as the gap between low-income and high-income women in terms of income proportion of health care-related OOP. Furthermore, the UHIS expands financial coverage to non-working women, unlike the out-phasing system, which excludes such vulnerable categories. It is also anticipated to contribute to delivery of good quality services, through provision of TA and capacity building to GAHAR. Adopting a ‘people-centered’ approach in the standards for health care

24 Prime Minister’s Decree 1948/2019 has defined six groups as disadvantaged: (a) beneficiaries of the cash transfer programs (Takaful and Karama, as well as the social security pension); (b) the unemployed person or family head who is ineligible to or has exhausted his/her eligibility period to unemployment benefits and every dependent person in the family; (c) the person or family head with no breadwinner or income, who lacks family care and resides in a social or health care facility; (d) the disabled person or family head who cannot earn money or have any source of income; (e) persons and families who reside in specific geographic areas and who are temporarily experiencing a natural or manmade disaster; and (f) the person or family head whose average income does not satisfy his/her own needs or his/her family members’ essential needs.

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facility registration and accreditation is a real shift in paradigm in the delivery of health care services in Egypt and is well aligned with the stakeholder engagement requirements of the project. The project is expected to secure citizen engagement through establishment and/or support of platforms necessary for the citizens to be able to provide their feedback, concerns, and complaints on any aspects pertaining to the new system. Regular structured feedback of citizens voice will be sought biannually.

106. The draft SIA demonstrated that the project may encounter several potential social risks and impacts. These include: (a) some lack of public acceptance due to cultural challenges and lack of trust in the GP’s capacity (gate-keeping system), which is a core shift that the UHIS is introducing; (b) the quality and even coverage of services; (c) exclusion of vulnerable populations due to targeting errors; (d) financial burdens on the near-poor; (e) limited institutional capacity and inability to deal with social risks; (f) the inability of small private clinics to be part of the new system, due to registration and accreditation requirements, which would be challenging for them; and (g) double insurance payments, for example, by private sector employees, who already have private insurance coverage. Mitigation measures have been proposed in the SIA to ensure that potential risks and impacts are managed.

107. The SEP identified and analyzed the project’s key stakeholders and interested parties; outlined a strategy for engagement; and assessed existing grievance redress mechanisms (GRMs) and information disclosure channels, as well as provision of the necessary measures for addressing identified gaps. The SEP has set a systematic and inclusive approach for communication and information sharing that will be followed by the different groups of stakeholders. This is in turn expected to contribute to minimizing the potential social risks and impacts of the project and proactive addressal of grievances and concerns. The ESCP, which forms part of the Loan Agreement of the project, sets out a timeframe of measures and actions that the GOE commits to, to ensure that potential adverse project risks and impacts are avoided, reduced, or mitigated. The GOE commits to follow an adaptive management approach, which provides room for proper handling of risks and impacts that may emerge, throughout the project life cycle, due to any unforeseen circumstances.

108. Identified project benefits and risks were subject to rounds of consultations with stakeholders. Following the SEP, the consultations, information disclosure, and engagement with different groups of stakeholders will continue during the project’s life cycle. The entities involved in the project, namely UHIA, GAHAR, MOF, HCO, and MOHP have conducted several rounds of consultation and outreach. For instance, GAHAR has been very proactive in reaching out to and consulting with the different groups of service providers including public and private hospitals, clinics, and NGOs. GAHAR also updates the registration and accreditation standards to reflect the different needs of beneficiaries in different geographic locations. For example, they are currently finalizing a set of standards that further accommodate office- based practice (rather than larger facilities) in areas where the population is widely dispersed, such as in South Sinai.

109. The MOHP and the HCO have led several consultations and awareness-raising events with different groups of beneficiaries in the targeted governorates with a focus on Port Said, Luxor, and South Sinai, in light of the gradual expansion of the system. The primary target of the HCO is the citizens/project beneficiaries. Outreach to local tribes in different districts in South Sinai has been done to share information about the project, obtain feedback, and also to get the beneficiaries registered to the new system using locally appropriate modalities (for example, mobile campaigns in difficult-to-reach areas) that make it easy and less costly for citizens. The same approach has been followed in Luxor districts. In

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addition to field (face-to-face) campaigns, different stakeholders disseminate UHIS-related information on their social media platforms regularly. Such platforms include, for example, the Facebook pages run by the MOHP (about 800,000 followers) and the UHIA (about 10,000 followers). Moreover, the respective senior officials appear very often on television, radio, and newspapers to disseminate information on the new system and respond to concerns of the people.

110. Gender. Health expenditures and utilization trends vary by gender in Egypt. Women use more health care services than men and are less likely to be insured. They often use private providers and, consequently, spend more per capita on all types of health care25. Also, women are less likely to be insured due to their lower level of labor force participation compared to men. 80 percent of women reported not having any health insurance coverage compared with 63 percent of men in 2018. Moreover, coverage levels are higher for women in the highest wealth quintile than among other women due to higher levels of education, better opportunities for employment, and greater ability to pay for private insurance. Also, income proportion of health care-related costs tends to be higher for low-income women.

111. The project is expected to have significant health and developmental impacts for women, especially among the poorest segment of the targeted population. Under Component 1, the project will ensure through multiple channels such as social media, face-to-face outreach at health facilities and in workplaces, as well as the use of mobile buses as outreach and enrollment points to reach out to women and men to ensure inclusive enrollment and empanelment into UHIS and narrowing the existing gap in insurance coverage. The project will also prioritize and provide contribution for low-income women through premium subsidies given that the UHIS focuses on poorest families in Egypt, including participants in the ongoing conditional cash transfer programs, Takaful and Karama, where around 90 percent of beneficiaries are female 26 (identified as part of the six disadvantaged groups benefiting from UHIS subsidies). In addition, the UHIS expands financial coverage to non-working women, unlike the old system, which excludes such vulnerable categories. The benefit package provided under the UHIS, covered under Component 2 will be tailored to the needs of women, including screening for chronic diseases and cancer and will strengthen some of the maternal health packages. Furthermore, the introduction of accredited telemedicine services will offer an innovative approach to deliver targeted support to women in a manner that does not require traveling long distances. The project will also promote equal representation in coordination bodies for UHIS (PBR 7.1) and ensure the impact assessment of subsidizing vulnerable groups under the UHIS (PBR 8.1) to report on differentiated impacts on women and men. Additionally, the capacity building that will be provided to the EJU at the MOF will include training on gender-sensitive data management and gender analysis, and the modular information system will ensure the availability of comparable gender- and income-disaggregated data which will be important to maintain and enhance the gender lens within operations. The project will include the following indicators to track narrowing of the main identified gender gap: (i) share of females among people enrolled with UHIA and empanelled with a GP in Phase I Governorates (excluding Targeted Vulnerable People), and (ii) share of females among Targeted Vulnerable People enrolled with UHIA and empanelled with a GP. Additionally, the project will monitor the number of female beneficiaries who have received essential health, nutrition, and population (HNP) services. As women are often the main responsible persons for domestic work (including caring for

25 USAID (U.S. Agency for International Development). 2011. Egypt National Health Account 2008/2009. https://www.hfgproject.org/wp-content/uploads/2015/02/Egypt-National-Health-Accounts-2008_09.pdf. 26 Takaful and Karama programs have reached 2.24 million households across all governorates (comprising approximately 9.46 million individuals) of which 88 percent are women.

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the sick), increasing access to health services may contribute to reducing their time dedicated to care for the sick and free up time for women to access the labor market (currently female participation is at 24.2 percent of the total labor force).27

112. Climate screening. This project was screened for climate risk and assessed as being at ‘Moderate’ risk from extreme precipitation and flooding, and sea-level rise. Although climate change risks on project outcomes are considered ‘Low’, Egypt faces vulnerabilities related to climate change. The vast majority of the population and infrastructure in Egypt are concentrated in the Delta and along the Mediterranean coast, with agriculture being the biggest employer (over 31.2 percent of the total population, contributing 14 percent to GDP in 2009),28 making Egypt particularly vulnerable to the impacts of sea-level rise, particularly inundation and salt intrusion. Vulnerabilities include mean annual temperature which is expected to increase by 2°C to 3°С by 2050, with warming increasing more rapidly in the interior regions, while rainfall is projected to reduce by 7 percent near the coast by 2050 and by 9 percent in central Egypt.29, In addition, changes to precipitation patterns are expected to lead to heavy rains, causing urban flooding (along coastal areas) and flash floods (in Upper Egypt and Sinai), inevitably causing storm damage, coupled with more frequent heat waves and dust storms. Rain-induced floods can wash away property, cause displacement of people, loss of life, a substantial reduction in agricultural productivity, and an increase in the prevalence of vector-borne diseases. In the short term, extreme heat waves, strong dust storms, and urban floods would affect the ability of those in need of health care services to reach health facilities. In the long term, some health care facilities in vulnerable areas in the Northern Delta would be inundated.

113. Impact of climate change on health. The health sector is affected by climate variability through both direct and indirect pathways, including extreme climate events (for example, heat waves, hurricanes/storms, floods, and droughts) and gradual changes (for example, water, food, and air quality) that negatively influence human health. While climate change has a significant impact on disaster management efforts and poses a significant threat to the efforts to meet the growing needs of the most vulnerable populations, the most direct link between climate change and ill health is air pollution, which kills 7 million people per year.30 Globally, over 90 percent of the air breathed by urban populations contains levels of outdoor air pollutants that exceed the WHO’s guidelines31 and a warming climate will worsen air quality. In the context of Egypt, the risk of vector-borne diseases is also Substantial given the potential for flooding.

114. The project will reduce vulnerability to climate change, specifically, project activities will enhance the adaptive capacity of the population, contributing to their climate resilience which is critical

27 World Economic Forum 2017. The Global Gender Gap Report 2017. http://www3.weforum.org/docs/WEF_GGGR_2017.pdf. 28 https://climateknowledgeportal.worldbank.org/country/egypt. 29 https://climateknowledgeportal.worldbank.org/country/egypt/climate-data-projections. The greatest reductions are projected during June, July, and August at 22percent, followed by September, October, and November by 11 percent. In Egypt’s central regions the highest reductions are projected for June, July, and August by 27 percent and September, October, and November by 11 percent. 30 WHO (World Health Organization). 2017. Preventing Non-Communicable Diseases by Reducing Environmental Risk Factors. Geneva: World Health Organization. 31 WHO (World Health Organization). 2018. COP24 Special Report on Health & Climate Change.

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for poor and vulnerable households who are often at the highest risk to the effects of climate change. Specific project activities which will support climate change adaptation include the following:

• PBC 2 will target populations that are particularly vulnerable to the impacts of climate change, including people who reside in specific geographic areas that temporarily experience a natural or manmade disaster. The six groups of underprivileged people who meet the public treasury criteria to have their contributions to the UHIS covered are those who are more vulnerable to natural hazards (such as extreme precipitation and flooding and sea-level rise) and the resulting price changes and have less access to support to cope and adapt to extreme climate events and fluctuations in heat and are at higher risk of vector- borne diseases. By aiming to provide national UHC to vulnerable groups, the project will create a safety net that will improve access to quality health care so that the beneficiaries can adapt to and be treated for the potential increase in vector-borne diseases (for example, malaria and dengue fever) due to flooding, and receive health advice on how to manage health impacts resulting from increasing air pollution and rising annual temperatures.

• PBC 3 will enhance population climate resilience by providing access to a package of health services which responds to the population’s health needs and burden of disease.

• PBC 8: Climate and Health Vulnerability Assessment (CHVA). The project will finance a CHVA to identify the specific health threats faced by the Egyptian population and to ensure most efficient targeting of resources to deal with the risks faced now and into the future. The CHVA will consider climate-related exposures such as rising temperature and changing precipitation as well as extreme weather events, current and future climate-related health outcomes such as malaria and other vector-borne diseases, nutrition and maternal and child health threats, and the capacity of the system to cope with these challenges. The CHVA will provide national- and state-level findings and recommendations designed to be embedded into current government initiatives, including the UHIS.

115. The project will support climate change mitigation through the following activities:

• Under Component 1, PBC 1 and PBC 2 will target the enrollment of the population of Phase I Governorates in the UHIS and its empanelment with PHC service points and therefore health provision will be closer to patient’s households. This will result in the reduction of travel time and the requirement for journeys avoiding transport-related emissions. This mitigation measure is particularly important in the context of Egypt where motor vehicle emissions and transportation are major contributors to air pollution.

• Reduction of energy consumption in health facilities. Health care systems at their core require enormous amounts of energy, from the supply chain to individual health care facilities, while hospitals are energy-intensive buildings. The UHIS project aims to address some of the inherent climate vulnerabilities as part of the support under the project. Normative performance standards (for energy efficiency) will be developed for inclusion in the accreditation criteria of health facilities under the new UHIS.

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• Digital health records under PBC 4. To reduce waste and increase sustainability and climate mitigation measures, the new UHIS will be encouraged to switch to digital health records, to reduce the paperwork generated by both health care facilities and their suppliers and to reduce waste dumped in landfills and paper production, which requires large amounts of water and emissions of methane as it decomposes. The shift to digital record storage, will simultaneously help keep patient data more secure and easily accessible by both patients and health care providers. In addition, increasing the quality and availability of health services at the local level will reduce the health system’s carbon footprint through a decrease in the need for patients to travel to distant facilities to achieve the services they require.

• Telemedicine under PBC 5, as part of accreditation. To better identify vulnerable populations in regions affected by climate disasters and more effectively and efficiently reach these households, the use of telemedicine will be introduced to allow patients to schedule appointments and receive laboratory services without having to leave their home, reducing emissions resulting from commutes to health care facilities. Telemedicine gives patients access to their primary care provider and other health professionals through remote channels, such as telephones and video chats. Through telemedicine, health care professionals will evaluate, diagnose, and provide treatment options to patients from a distance, allowing the disabled, the elderly, and patients in remote areas to receive care they may not have otherwise been able to obtain.

• Local Food, waste reduction, and sustainability. Health facilities will be encouraged to invest in sourcing local food, reducing waste, and improving sustainability. Hospitals will consider the environmental impacts of their food suppliers, purchasing locally sourced food products. This will strengthen the local economy, cut down on food miles, and reduce dependence on fossil fuels and air pollution. Less miles traveled also means that there is less risk of food contamination or spoilage, keeping patients healthier. Hospitals will also work with local composting companies to haul away food waste that can be used as fertilizer in sustainable farming.

• Energy-conscious sources and construction. Construction of new health facilities and renovation of existing facilities will be built taking into account ‘green’ principles: (a) designing buildings to maximize the amount of sunlight they receive; (b) constructing green roofs, which help to stem the flow of storm water; (c) construction waste being diverted to recycling; (d) use of green building materials (including low-emission paint and forest certified wood); (e) water-saving fixtures to reduce usage in comparison to more conventional plumbing systems; (f) energy-efficient chillers, boilers, and insulation units; and (g) motion-sensing lights. The use of alternative energy (including solar power) will not only help offset energy consumption but it will also positively affect human health by lowering greenhouse gas emissions and reduce air pollutants, including sulfur and nitrogen, improving air quality.

116. Embedding a systematic approach to integrating ‘Green Health Insurance’ and energy efficiency interventions in the Egyptian health sector will take advantage of potential energy savings and climate co-benefits. To achieve this, the following activities will be carried out in conjunction with the World Bank

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Health, Climate, and Environment Program and the Energy Sector Management Assistance Program. First, normative performance standards (for EE) will be developed for inclusion in the accreditation criteria of health facilities under the new UHIS. Second, a series of in-country energy efficiency audits of a range of health facilities will be carried out with the objective to identify opportunities for energy savings in health facilities in advance of accreditation.

117. GRM. The rollout of the UHIS is anticipated to generate a large number of queries, suggestions, and complaints that would necessitate the creation of a responsive and interactive GRM. The GRM will allow appropriate channels for beneficiaries to communicate their complaints, which will be carefully considered on time. Currently, there is a 24/7 call center mandated to respond to beneficiaries’ inquiries and complaints. This center is assumed to be a key uptake channel, through which complaints are received and rechanneled to relevant bodies (for example GAHAR or the UHIA) for further action/feedback. Complaints are also handled at the facilities level, where an officer at each health care facility is responsible for client satisfaction. Furthermore, inspecting exclusion-related complaints is mandated by Prime Ministerial Decree No. 1948/2019 to a permanent committee, formed by the UHIA’s chairperson.

118. The MOF has prepared and disclosed a SEP satisfactory to the World Bank. The SEP was prepared based on requirements under ESS10. A robust GRM system, coupled with an awareness-raising campaign, is among the key elements of the SEP. The SEP also analyzes groups of stakeholders who could be negatively affected and other interested parties that might have an influence on the project.

119. Social risk is rated Substantial. On the institutional capacity front, this will be their first experience for the MOF as an implementing agency of a World Bank-funded project. Client capacity is a significant challenge, particularly because the ESF requires the borrower to undertake several key tasks, such as preparation and implementation of an SEP as well as an ESCP. Considering the abovementioned potential risks and capacity limitations, the social risk classification is deemed Substantial and will be reviewed regularly as the project progresses forward.

V. GRIEVANCE REDRESS SERVICES

120. Communities and individuals who believe that they are adversely affected by a WBG supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

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VI. KEY RISKS

121. Overall project risk is rated Substantial. The individual risks leading to the overall risk being Substantial are discussed in the following paragraphs.

122. Political and governance risk is rated Substantial. Although there is strong commitment at the highest level of the government (President, Prime Minister, and Minister of Finance) to gradually introduce universal health insurance in all governorates, as stipulated by the UHIL, political and governance risk is considered Substantial. Introducing universal health insurance is an ambitious reform program that is expected to face several challenges. There is need to ensure that the government commitment translates to concrete measures to ensure effective implementation for a well-defined program. The fact that this project will be implemented within a mandate provided under the UHIL and there is a clear delineation of functions across the new UHIS agencies will help mitigate the political and governance risks. In addition, the coordinating body/platform with representation from all the key stakeholders will help to ensure oversight of the UHIS and hold the newly formed UHIS agencies accountable for fulfilling their mandates and coordinating among each other. A PMU will be established within the EJU with core fiduciary capacities and representation from the UHIS agencies.

123. Macroeconomic risk is Substantial. As the UHIS revenue depends on payroll contribution, tax revenue, levies, and market return to investment, the uncertainty in macroeconomic trends, especially in a post COVID-19 environment, incurs some risk to the funding of the UHIS. Growth is expected to be sustained through a recovery in private consumption and investment, supported by moderating inflation and easing monetary policy. Risks to the outlook stem from three different levels: macroeconomic, fiscal, and external. On the macroeconomic level, natural gas and tourism have been responsible for more than a quarter of the achieved GDP growth in the past two years. However, both sectors were substantially negatively affected through the COVID-19 economic downturn. On the fiscal level, difficulty to mobilize revenues and the rapid expansion of the interest payments (10 percent of GDP in FY19) crowding out healthier patterns of expenditure might cause deviation from announced fiscal targets, especially if reform momentum slows down. Other competing social sector priorities owing to the COVID-19 impact, for example, expansion in social safety nets might constitute a crowding out risk to the government’s ability to sustain adequate premium subsidies to the UHIS. Moreover, fiscal risks stemming from contingent liabilities are significant given that net guaranteed debt amounts to 20.4 percent of GDP, of which 11.4 percent of GDP are foreign guarantees and 9.1 percent of GDP are domestic guarantees. Egypt might also be exposed to external shocks due to escalating trade tensions, rising geopolitical risks in the region, and the sustained economic fallout of the impact of the coronavirus. Implications on the Egyptian economy from such risks could be channeled through different transmission channels, including trade and supply chains, oil prices, tourism, foreign direct investment, and portfolio investments and remittances. To mitigate the risk, the MOF, UHIS, and World Bank will closely monitor the macroeconomic trends and continue to update the UHIA actuarial model.

124. Technical design risk is Substantial. SHI is an increasingly popular policy reform agenda in low- and middle-income countries. Although success stories do exist, different SHI schemes have considerable variations in the achievement of their stated objectives for a variety of reasons. First, there are general principles and elements of SHI but there is no consensus on the technical blueprints for SHI. Second, while the same SHI design is beneficial in a well-governed setting, it may also lead to greater costs and inequities

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in a poorly governed environment. Third, the empirical evidence of labor-tax financed SHI for low- and middle-income countries remains weak. Fourth, setting up a new SHI organization which can efficiently receive, pool, and pay out its funds would require significant human capital. Fifth, while the Egypt’s UHIL has been approved, many technical and operational details for its implementation still need to be further developed. This on one hand, poses challenges for the project but on the other hand, creates entry points for policy dialogue and TA to help Egypt minimize pitfalls/unintended negative consequences and maximize the benefits of the UHIS for its people.

125. Institutional capacity for implementation and sustainability risk is Substantial. The success of and sustainability of the new UHIS will depend greatly on the performance of the newly created UHIS agencies. These agencies are new with no established track record which makes the institutional capacity risk Substantial. The four new agencies still need to fill their organizational structures with qualified staff, prepare standard operating procedures, and invest in integrated IT systems. To mitigate these risks, a clear modus operandi will be developed for each agency so that there is clarity on which agency will be doing what, who is accountable for what, and identified criteria for monitoring performance during the project implementation time frame. In addition, an assessment of the existing capacity in the new agencies will be undertaken by the EJU in the first year of implementation with recommendations on areas where additional capacity would be needed. The assessments will inform the organizational structure and the multi-year staffing plans (incentivized through PBR 7.232 for GAHAR, UHIA, and HCO) that will be developed by each of the four new UHIS agencies. This will help ensure the new agencies are adequately staffed by the third year of implementation. The project will support, through PBC 4, the rollout of the UHIS IT system focusing on the essential IT modules (beneficiary enrollment, provider management, and claims management) that are required for a functional UHIS. The basic modules will be rolled out in the first year with a full-fledged IT system by the fourth year of implementation. Support will also be provided to strengthen the procurement module that will be managed by the EASPMTM. The key reforms and critical activities necessary for the success and sustainability of the UHIS have been articulated, including their sequencing, as outlined in annex 2. During project implementation, risks will be mitigated through frequent implementation support missions to monitor progress and provision of TA as needed. The UHIS will also require significant on-budget expenditures over an extended time frame to upgrade public sector health care facilities and to attract doctors to join the public sector and build their capacity through better compensation packages and other non-tangible benefits, to obtain accreditation from GAHAR.

126. Financial sustainability in the Phase I Governorates supported by the project cannot be sustained by premiums alone (table 3); taxes and earmarked charges (box 1) will also be critical revenue sources. In this regard, project funds will flow directly to the MOF to reimburse contributions paid to the UHIA by the state treasury for the premiums of on-budget civil servants in Phase I Governorates. This will be in addition to the premiums paid by the state treasury to the UHIA on behalf of poor citizens in Phase I Governorates33 (5 percent of the minimum salary, as stipulated by the UHIL). Prime Minister Decree No. 1948/2019 stated certain criteria to identify the financially underprivileged persons and listed some controls to exempt them

32 PBR 7.2 focuses on the development and formal adoption of the organizational structure and a multiyear human resource plan for the UHIA, GAHAR, and HCO. 33 The GOE has announced its plan to roll out the system in June 2020 in two additional governorates: (a) Aswan and (b) Luxor, which were originally included in Phase II, per Annex 2 of the UHIL.

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from UHIS contributions. However, enforcing these controls needs coordination and electronic data- sharing between different public sector entities. Hence the need for well-functioning and integrated IT systems. In addition, regular updates of the actuarial model will identify needs and provide opportunity to adjust implementation course based on available resources.

127. Stakeholder risk is Substantial. The project will scale up the effort to implement UHC in Phase I Governorates and to respond to demand for access to affordable, quality services, while reducing the burden of disease. However, there is a risk that the pace of delivery of community-level services may not be satisfactory due to logistical and governance issues. Moreover, there is a risk of sustainable coverage and enrollment of vulnerable groups. The MOF undertook an actuarial analysis to estimate the fiscal impacts of different scenarios in the design of a new insurance system and enrollment strategies, to ensure the affordability of the new system. Stakeholder risk is considered Substantial as the capacity of the new UHIS agencies in terms of quality, timeline, and functionality remains unknown and a concern. In addition, the coordination among the new agencies has not been fully established. The stakeholder’s risk will be mitigated through a deep and early engagement with the implementing agencies with the provision of the much-needed TA. All related organizations are young and are expected to be eager to embrace sound governance practices.

128. Fiduciary risk is Substantial due to the Substantial FM risk rating. Key FM mitigation measures are detailed in the following paragraphs.

129. Entity level. Since the establishment of the EJU at the MOF, it remains understaffed pertaining to the FM function. Additionally, it lacks the required systems and procedures to carry out the FM function for the project. Hence, it requires significant efforts to establish and maintain the FM function. The EJU, through the PMU, agreed to hire additional FM staff to carry out the FM function and to develop and maintain a POM governing the areas of record keeping, disbursement activities, reporting, and auditing arrangements. The EJU, through the PMU, will also recruit an FM consultant with previous experience working on World Bank-financed projects. The recruited consultant will train the PMU FM staff on World Bank guidelines and procedures. The World Bank staff will provide regular implementation support throughout the project implementation. The residual risk is rated Substantial.

130. Accounting. The EJU does not have an automated accounting system which is instrumental to implement the envisaged project given its size and complexity. The accounting system may also not provide comprehensive information on all sources and uses of funds. The residual risk is rated Substantial.

131. Internal control. The EJU does not have documented accounting policies and procedures arrangements to reflect the project accounts, controls, documentation, and budgetary cycles. This will lead to inconsistent application and adherence to unified and documented policies and procedures. The EJU, through the PMU will create financial policies and procedures manual to depict the cycles pertaining to reporting, recording, reviewing, and approving the project’s transactions that will be followed during the implementation of the project. The POM will be adopted not later than three months after loan effectiveness. This risk is rated Substantial.

132. Funds flow. The PMU will open separate DAs that will operated by the EJU through the PMU. The account will be reconciled on time and will be replenished periodically. The residual risk is Moderate.

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133. Financial reporting. The project reports will need to reflect the project finances through the FMIS (to be established) and issue it timely on quarterly and annual basis. The format and content of the project reports will be agreed with the PMU before effectiveness. Copies of these reports will be attached to the POM thus standardizing the same. The EJU, through the PMU, will establish an automated accounting system. This system will allow the generation of the overall project financial reports on time. The residual risk is Substantial.

134. Auditing. The size and complexity of the project call for a special and tailored audit TOR. The PMU will prepare an external auditor’s TOR. The audit will be conducted in accordance with International Standards on Auditing. The auditors’ TORs will be prepared by the PMU and cleared by the World Bank before the engagement of the auditor. The external auditor will be responsible for the review of the quarterly IFRs and audit of the annual project financial statements. Quarterly reviewed IFRs and annual audited project financial statements reports will be reviewed upon reception and discussed with the PMU and if necessary with the auditor. The residual risk is rated Substantial.

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VII. RESULTS FRAMEWORK AND MONITORING

Results Framework COUNTRY: Egypt, Arab Republic of Supporting Egypt’s Universal Health Insurance System

Project Development Objectives(s) To (i) increase the coverage of Egypt’s Universal Health Insurance System in Phase I Governorates, (ii) strengthen UHIS-related governance and institutions, and (iii) provide temporary financial protection against high out of pocket health expenditures for vulnerable populations outside Phase I Governorates.

Project Development Objective Indicators

RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Enrollment and Empanelment of the Population into UHIS

Number of people enrolled with UHIA and empanelled with a GP in Phase I Governorates (excluding PBC 1 0.00 776,325.00 1,552,000.00 2,328,000.00 3,107,065.00 Targeted Vulnerable People) (Number)

Percentage of people enrolled with UHIA and empanelled with a GP in Phase I Governorates 0.00 50.00 50.00 50.00 50.00 (excluding Targeted Vulnerable People) who are female (Number)

Per capita annual PHC visits by UHIS enrollees in Phase I 1.10 1.45 1.80 2.15 2.50 Governorates (Number)

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RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Per capita annual PHC visits by male UHIS enrollees in Phase I 0.98 1.33 1.70 2.02 2.40 Governorates (Number)

Strengthening UHIS Governance, Systems and Facilitating Environment

Percentage of contracted public provider entities that have been 0.00 80.00 90.00 90.00 100.00 accredited by GAHAR (Percentage)

Annual percentage of payments by UHIA that are made to contracted providers in Phase I Governorates PBC 6 0.00 50.00 60.00 70.00 80.00 within 60 days from the date of claim submission (Percentage)

Temporary financial protection against high OOP healthcare expenditures for vulnerable populations

Number of Other Vulnerable People benefiting from PTES in PBC 9 0.00 500,000.00 1,000,000.00 1,000,000.00 1,000,000.00 Other Governorates (Number)

Female share of the number of Other Vulnerable People 0.00 45.00 45.00 45.00 benefiting from PTES in other Governorates (Percentage)

PDO Table SPACE

Intermediate Results Indicators by Components

RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Comp 1: Enrollment of the population in the UHIS and empanelment with General Practitioners (GP)

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RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Number of Targeted Vulnerable People enrolled with UHIA and PBC 2 0.00 660,000.00 1,320,000.00 1,980,000.00 2,620,584.00 empanelled with a GP (number) (Number) Number of Targeted Vulnerable People enrolled with UHIA and empanelled with a GP (number) 0.00 660,000 / 85% 1,320,000 / 75% 1,980,000 / 70% 2,620,584 / 60% and share of females among them (percentage) (Text) People who have received essential health, nutrition, and population 0.00 2,436,325.00 3,872,000.00 5,308,000.00 6,727,649.00 (HNP) services (CRI, Number) People who have received essential health, nutrition, and population (HNP) services - 0.00 2,436,325.00 4,872,000.00 5,308,000.00 6,727,649.00 Female (RMS requirement) (CRI, Number) Comp 2: Strengthening capacity of UHIS-related agencies, governance & creating enabling environment Development and adoption by UHIA of a benefit package for the continuum of care (primary care, PBC 3 No Yes Yes secondary and tertiary hospital care) (Yes/No) Supporting modular UHIS No modular UHIS Information Beneficiary enrollment Provider epanelment Supply chain procurement PBC 4 Claim management module information system roll-out (Text) System module enrollment module module within EASPMTM Creation of official coordinating body for UHIS at national and PBC 7 0.00 1.00 4.00 5.00 7.00 Governorate levels (Number) Establishment of a one- stop shop for licensing of private primary No No No Yes Yes healthcare services (Yes/No)

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RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Development and adoption of a process guide for hospital No Yes Yes accreditation standards by GAHAR (Yes/No) Operationalization of a Big Data No No No No Yes Analytics unit within UHIA (Yes/No) Development of quality of care monitoring frameworks for PHC & No No Yes for PHC Yes for hospitals Yes for PHC and hospitals hospitals (Text) Share of case-based payment in total UHIA’s annual payment to 0.00 5.00 10.00 15.00 20.00 hospitals (Percentage) Introduction of the risk adjusted capitation (at least for sex and age) No No No No Yes in PHC payment (Yes/No) Development of National Strategy for Quality of Care and Patient No No Yes Yes Safety (Yes/No) Annual UHIA performance and expenditure review report 0.00 0.00 0.00 1.00 2.00 published (Number) Annual report on patient satisfaction, grievances and 0.00 1.00 1.00 1.00 1.00 utilization published (Number) Annual UHIS Health Forum held at No forums conducted at All enrolled Governorates All enrolled Governorates All enrolled Governorates All enrolled Governorates and Governorate and national levels Governorate or national levels and national level and national level and national level national level (Text) 15 public and 5 private 4 public and 4 private ambulatory service providers, Strengthening accreditation and 15 public and 5 private 10 public and 20 private radiology service providers; PBC 5 0.00 1 public and 1 private provider contracting (Text) hospitals pharmacies 5 public and 5 private Telemedicine service laboratory service providers providers

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RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 Client user satisfaction and utilization surveys conducted in 0.00 1.00 2.00 3.00 4.00 project target areas (Number) Development of guidelines and protocols on data privacy and management of health records, to No Yes mitigate risk of data breaches (Yes/No) Development and formal adoption of the organizational structure and a multi-year Human Resource Plan No Yes Yes Yes Yes for each of UHIA, GAHAR and HCO (Yes/No) Reduction of the staffing gap for each of UHIA, GAHAR and HCO 0.00 50.00 60.00 80.00 100.00 (Percentage) Level of satisfaction of citizens and patients in their participation in coordination committees 0.00 50.00 65.00 75.00 90.00 (disaggregated for national and regional levels (Percentage) Revision of the strategy to target vulnerable people for UHIS PBC 8 No No No Yes Yes subsidies (Yes/No)

IO Table SPACE

UL Table SPACE

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Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of people enrolled Number of people enrolled with UHIA and with UHIA and empanelled UHIA empanelled with a GP in Phase I with a GP in Phase I Annual Information UHIA

Governorates (excluding Targeted Governorates (excluding System Vulnerable People) Targeted Vulnerable People). Percentage of people Percentage of people enrolled with enrolled with UHIA and UHIA UHIA and empanelled with a GP in empanelled with a GP in Annual Information UHIA Phase I Governorates (excluding Phase I Governorates System Targeted Vulnerable People) who are (excluding Targeted

female Vulnerable People)who are female (sex disaggregated) UHIA Per capita annual PHC visits by UHIS Annual information UHIA enrollees in Phase I Governorates system

Per capita annual PHC visits UHIA Per capita annual PHC visits by male by male UHIS enrollees in Annual information UHIA UHIS enrollees in Phase I Phase I Governorates (sex system Governorates disaggregated) Percentage of contracted UHIA, GAHAR Percentage of contracted public provider UHIA, GAHAR public provider entities that Annual and public UHIA entities that have been accredited by information systems have been accredited by providers GAHAR GAHAR Number of Other Vulnerable People Number of other vulnerable MOF, MOH, Desk review, sampling Annual MOF benefiting from PTES in Other people benefiting from PTES PTES and of beneficiaries via

Governorates in Other Governorates. sampling of phone and face to face

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beneficiaries interviews

Percentage of female share of the number of Other Vulnerable People benefiting from PTES in MOF, MOH, Desk review, sampling other Governorates. Female share of the number of Other PTES and of beneficiaries via Target is set at % 45 as Annual MOF Vulnerable People benefiting from sampling of phone and face to face maternal and reproductive PTES in other Governorates beneficiaries interviews health services are not

covered under PTES but provided for free under primary and secondary health care services. PBR 6.2: Annual percentage of payments by UHIA that UHIA, sample Annual percentage of payments by UHIA are paid in less than 60 days HCO and UHIA information that are made to contracted providers in from the date of claim Annual UHIA non-public system Phase I Governorates within 60 days from submission to UHIA by providers the date of claim submission contracted providers in

Phase I Governorates (US$15 million) ME PDO Table SPACE

Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Number of vulnerable Review of Number of Targeted Vulnerable People persons and their Annual UHIA, MOF documentation and IT UHIA enrolled with UHIA and empanelled with dependents for whom UHIA systems a GP (number) received state-paid

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subsidies (the poor) in the preceding calendar year in full. Under the universal health insurance system, the vulnerable and their dependents are identified using the proxy means tested administered by the “last resort” social assistance scheme. Number of people enrolled with UHIA and empanelled Number of Targeted Vulnerable with a GP in Phase I UHIA Review of People enrolled with UHIA and Governorates (excluding Annual Information documentation and IT UHIA empanelled with a GP (number) and Targeted Vulnerable People) System systems share of females among them (number) and share of

(percentage) female among them (percentage) (sex disaggregated) UHIA People who have received essential Annual information UHIA health, nutrition, and population (HNP) system services

People who have received essential UHIA health, nutrition, and population Annual Information UHIA

(HNP) services - Female (RMS System requirement) Development and adoption Development and adoption by UHIA of a by UHIA of a benefit UHIA information benefit package for the continuum of care Annual UHIA UHIA package for the continuum system (primary care, secondary and tertiary of care (primary care, hospital care) secondary and tertiary

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hospital care).

UHIA and EASTPMTM Supporting modular UHIS information Annual UHIA and EASTPMTM information systems. system roll-out

UHIA information Creation of official coordinating body for Annual UHIA system UHIS at national and Governorate levels

Establishment of a one- stop shop for MOH information MOH licensing of private primary healthcare system services Development and adoption of a process GAHAR information Annual GAHAR guide for hospital accreditation standards system by GAHAR UHIA information Operationalization of a Big Data Analytics Annual UHIA system unit within UHIA

From Year 1 to Year 4, at Development of quality of care least 10 clinical guidelines GAHAR information Annual GAHAR monitoring frameworks for PHC & on priority conditions (TBD) system hospitals will be revised or developed and endorsed annually. This indicator measures the payment method used by the UHIA to pay hospitals. Share of case-based payment in total Annual UHIA The measure is the UHIA’s annual payment to hospitals proportion of hospital discharges paid using the case based payment system. Introduction of the risk adjusted Annual UHIA capitation (at least for sex and age) in PHC payment

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For development of Quality Framework for Strategic Purchasing and its introduction into the payment mechanism, a decision of the UHIA Board of Directors is required, Development of National Strategy for which formally adopts Annual GAHAR and UHIA

Quality of Care and Patient Safety revisions to the current payment model, namely: (a) introduction of Key Performance Indicators (KPI) and (b) Quality Indicators (QI) to improve efficiency and quality of care in family medicine and hospitals. Annual UHIA performance and Annual UHIA expenditure review report published Annual report on patient satisfaction, Annual UHIA UHIA grievances and utilization published Annual UHIS Health Forum held at Annual UHIS UHIS

Governorate and national levels UHIA information Strengthening accreditation and provider Annual UHIA system contracting

User satisfaction and To track yearly the patient utilization survey in satisfaction and utilization Client user satisfaction and utilization Yearly. MOHP targeted facilities MOHP. levels in project target areas surveys conducted in project target areas conducted by an in the target Phase I independent agency. Governorates.

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Measures development of Development of guidelines and protocols guidelines and protocols on World Bank and IVA on data privacy and management of data privacy and Annual. MOHP / IVA MOHP review health records, to mitigate risk of data management of health breaches records, to mitigate risk of data breaches. In year 1, development and Development and formal adoption of the formal adoption of the Review of organizational structure and a multi-year organizational structure and Annual MOF MOF documentation Human Resource Plan for each of UHIA, a multi-year Human

GAHAR and HCO Resource Plan for each of UHIA, GAHAR and HCO From year 1 to 4, calculate the average percentage of filled (hired and onboarded) MOF, UHIA, Review of Reduction of the staffing gap for each of positions in the combined Annual MOF GAHAR, HCO documentation UHIA, GAHAR and HCO total number of positions in

the UHIA, GAHAR and HCO officially adopted organizational structures Survey of citizens and Level of satisfaction of patients that take part Level of satisfaction of citizens and citizens and patients in their in the coordination patients in their participation in participation in coordination Bi-annual UHIA committee meetings at UHIA coordination committees (disaggregated committees (disaggregated both the national level for national and regional levels for national and regional and in each of the levels) Phase I Governorates

Revision of the strategy to Revision of the strategy to target Annual UHIA target vulnerable people for vulnerable people for UHIS subsidies UHIS subsidies

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ME IO Table SPACE

Performance-Based Conditions Matrix

DLI_TBL_MATRIX PBC 1: Number of people enrolled with UHIA and empanelled with a GP in Phase I Governorates (excluding Targeted PBC 1 Vulnerable People)

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Output Yes Number 28,000,000.00 8.00

Period Value Allocated Amount (USD) Formula Baseline 0.00

FY21 to FY24 3,107,065.00 28,000,000.00 $901,172 per 100K persons enrolled/empanelled

DLI_TBL_MATRIX PBC 2 PBC 2: Number of vulnerable population enrolled with UHIS and empanelled with a GP

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Output Yes Text 180,000,000.00 41.20

Period Value Allocated Amount (USD) Formula Baseline 0 / N/A

FY21 to FY24 2,620,584 180,000,000.00 $6,868,698 per 100K vulerable persons enrolled/empanelled

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DLI_TBL_MATRIX PBC 3: Development and adoption of a benefit package for the continuum of care (primary care, secondary and tertiary PBC 3 hospital care

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Process No Yes/No 10,000,000.00 4.00

Period Value Allocated Amount (USD) Formula Baseline No

FY21 to FY24 Yes 10,000,000.00

DLI_TBL_MATRIX PBC 4 PBC 4: Supporting modular UHIS information system roll-out

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Process No Text 35,000,000.00 14.00

Period Value Allocated Amount (USD) Formula Baseline No modular UHIS Information System

FY21 to FY24 Capacity building for roll-out of the 4 modules 35,000,000.00 see procedure

DLI_TBL_MATRIX PBC 5 PBC 5: Strengthening accreditation and provider contracting

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Output No Text 25,000,000.00 7.20

Period Value Allocated Amount (USD) Formula Baseline 0.00

FY21 to FY24 Number of hospitals, pharamcies, radiology 25,000,000.00 see procedure

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service providers, laboratory service provider, ambulatory service and Telemedicine providers accredited by GAHAR and contracted by UHIA in Phase I Governorates

DLI_TBL_MATRIX PBC 6 PBC 6: Strengthening provider payment

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Process No Text 20,000,000.00 8.00

Period Value Allocated Amount (USD) Formula Baseline 0.00

FY21 to FY24 PBR 6.1: adoption of provider payment 20,000,000.00 PBR 6.1: US$5,000,000 -- PBR 6.2: mechanism; PBR 6.2: 80% US$15,000,000

DLI_TBL_MATRIX PBC 7 PBC 7: Strengthen governance of UHIS and enhance stakeholder participation and input

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Process Yes Text 27,000,000.00 8.80

Period Value Allocated Amount (USD) Formula Baseline 0.00

FY21 to FY24 PBR 7.1: Creation of coordination bodies for UHIS 27,000,000.00 see procedure at the national level and in all Phase I Governorates; PBR.2: Development and formal adoption of the organizational structure and a multi-year Human Resource Plan for each of the 3 agencies UHIA, GAHAR and HCO; PBR 7.3: Annual reduction of the staffing gap for each of

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the 3 agencies; PBR 7.4: Dissemination of annual reports on patient satisfaction, grievances and utilization; PBR 7.5: Establishment of a one-stop shop for licensing of private primary care services; PBR 7.6: Development and adoption of a process guide for hospital accreditation standards by GAHAR; PBR 7.7: Operationalization of of a Big Data Analytics unit within UHIA

DLI_TBL_MATRIX PBC 8 PBC 8: Development and adoption of a set of complementary regulations and strategies for UHIS

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Process No Text 15,000,000.00 6.00

Period Value Allocated Amount (USD) Formula Baseline N/A

FY21 to FY24 PBR 8.1: Review of Decree No. 1948/2019 15,000,000.00 see procedure (targeting vulnerable groups for UHIS subsidies) and adopting a new framework. PBR 8.2: Preparation and disclosure of a SESA in accordance with the ESCP on the environmental, climate change and social risks associated with the roll-out of UHIS. PBR 8.3: Development and Adoption of a Green Health Insurance System Strategy. PBR 8.4: Satisfactory adoption and implementation by three hospitals (including 2 public hospitals one non-governmental hospital) of the green health insurance system strategy in Phase I Governorates

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DLI_TBL_MATRIX PBC 9 PBC 9: Number of Other Vulnerable People benefiting from PTES in Other Governorates

Type of PBC Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount

Output Yes Number 50,000,000.00

Period Value Allocated Amount (USD) Formula Baseline 0.00

FY21 to FY24 500,000.00 50,000,000.00 see procedure

Verification Protocol Table: Performance-Based Conditions

PBC 1: Number of people enrolled with UHIA and empanelled with a GP in Phase I Governorates (excluding Targeted PBC 1 Vulnerable People) PBR Target 1.1 Payment for enrolling & empanelling of every 100,000 persons (excluding vulnerable populations) will be Description US$901,172. The minimum payment threshold is US$3,000,000 up to the maximum allocated amount. Data source/ Agency UHIA data, HCO data, spot checks, spot checks on target individuals, Third party data.

Verification Entity Years 1-4: Desk review of UHIA data on the number of people in target Phase I Governorates of the UHIS who are enrolled with UHIA and are empanelled with a primary/family healthcare physician/service. Interview a random subset of enrolled people by phone (sampling method and sample size to be cleared by the World bank) Payment for enrolling & empanelling Procedure of every 100,000 persons (excluding vulnerable population) will be US$901,172. The minimum payment threshold is US$3,000,000 up to the maximum allocated amount.

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PBC 2 PBC 2: Number of vulnerable population enrolled with UHIS and empanelled with a GP PBR Target 2.1 Number of Targeted Vulnerable People enrolled with UHIA and empanelled with a GP. Payment for enrolling Description & empanelling of every 100,000 vulnerable persons will be US$6,868,698. The minimum payment threshold is US$14,000,000 up to the maximum allocated amount. Data source/ Agency MOF, UHIA data, HCO data, spot checks, spot checks on target individuals, Third party data. Years 1-4: verify that the number of vulnerable people in target Phase I Governorates of the UHIS who are enrolled with Verification Entity UHIA and are empanelled with a primary/family healthcare physician/service. Years 1-4: Desk review of UHIA data on the number of vulnerable people in target Phase I Governorates of the UHIS who are enrolled with UHIA and are empanelled with a primary/family healthcare physician/service. Interview a random subset of Procedure enrolled vulnerable people by phone (sampling method and sample size to be cleared by the World Bank).

PBC 3: Development and adoption of a benefit package for the continuum of care (primary care, secondary and tertiary PBC 3 hospital care PBR Target 3.1: Development and adoption of a benefit package for the continuum of care (primary care, secondary and Description tertiary hospital care. Data source/ Agency UHIA, HCO hospitals, non-public sector hospital data, third party data.

Verification Entity Year 1: verify that the UHIA has developed and officially adopted a benefit package for the continuum of care (primary care, secondary and tertiary hospital care) that is: (a) meets best international best practices for health benefit packages supported by national payer/national insurance financed schemes; (b)responds to population health needs and disease Procedure burden; (c) provides for a reasonable and greater private sector participation in service delivery; and (d) acceptable to the World Bank. US$10,000,000 will be awarded upon the verification of the approval and adoption of Benefit Package.

PBC 4 PBC 4: Supporting modular UHIS information system roll-out PBR Target 4.1: Development and roll-out of beneficiary enrolment module within UHIA (US$10,000,000). PBR Target 4.2: Description Development and roll-out of provider management module within UHIA (US$10,000,000). PBR Target 4.3: Development and

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roll-out of claim management module within UHIA (US$10,000,000). PBR Target 4.4: Development and roll-out of the procurement module within EASPMTM (US$5,000,000). Data source/ Agency GAHAR, HCO, non-public hospitals, third party data.

Verification Entity Year 1: Verify that an electronic beneficiary enrolment information module has been developed and rolled-out by UHIA and that it is: (a) being used by UHIA to enrol UHIS beneficiaries; and (b) acceptable to the World Bank. Development and roll- out of the procurement module within EASPMTM (US$5,000,000) Year 2: Verify that an electronic provider management information system has been developed and rolled-out by UHIA and that is: (a) being used by UHIA to enrol & interact with UHIS contracted providers; and (b) acceptable to the World Bank. Year 3: Verify that an electronic claim management information system has been developed and rolled-out by UHIA and that it is: (a) being used by UHIA to handle claims submitted by UHIS contracted providers; and (b) acceptable to the World Bank. Procedure Year 3: Verify that an electronic medical procurement information system has been developed and rolled-out by EASPMTM and that is: (a) being used by EASPMTM to handle procurement processes and daily operations; and (b) acceptable to the World Bank. Payment Formula: PBR 4.1: Beneficiary enrollment and empanelment module: US$10,000,000 PBR 4.2: Provider empanelment module: US$10,000,000 PBR 4.3: Claim management module: US$10,000,000 PBR 4.4: Procurement module: US$5,000,000

PBC 5 PBC 5: Strengthening accreditation and provider contracting PBR Target 5.1 Accreditation by GAHAR and contracting by UHIA of 20 hospitals, of which 5 are non-governmental hospitals in Phase I Governorates PBR Target 5.2 Accreditation by GAHAR and contracting by UHIA of 30 pharmacies, of which 20 are non-governmental pharmacies in Phase I Governorates PBR Target 5.3 Accreditation by GAHAR and contracting by UHIA of Description 8 radiology service providers, of which 4 are non-governmental radiology service providers in Phase I Governorates PBR Target 5.4 Accreditation by GAHAR and contracting by UHIA of 15 laboratory service providers, of which 10 are non- governmental laboratory service providers in Phase I Governorates PBR Target 5.5 Accreditation by GAHAR and contracting

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by UHIA of 15 ambulatory service providers, of which 5 are non-governmental ambulatory service providers in Phase I Governorates PBR Taret 5.6 Accreditation by GAHAR and contracting by UHIA of three telemedicine service providers, of which two are non-governmental telemedicine service providers in Phase I Governorates Data source/ Agency GAHAR, HCO, non-public hospitals, third party data.

Verification Entity Year 2: Payment of US$ 10 million upon verification that 20 licensed hospitals have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 5 hospitals out of the 20 are non-public hospitals; and (b) they are physically located in target Phase I Governorates of UHIS. Year 3: Payment of US$ 3 million upon verification that 30 licensed pharmacies have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 20 pharmacies out of the 30 are non-public pharmacies; and (b) they are physically located in target Phase I Governorates of UHIS. Year 3: Payment of US$ 3 million upon verification that 8 licensed radiology service providers have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 4 radiology service providers out of the 8 are non-public radiology service providers; and (b) they are physically located in target Phase I Governorates of UHIS. Procedure Year 3: Payment of US$ 3 million upon verification that 15 licensed laboratory service providers have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 10 laboratory service providers out of the 15 are non-public laboratory service providers; and (b) they are physically located in target Phase I Governorates of UHIS. Year 4: Payment of US$ 3 million upon verification that 15 licensed ambulatory service providers have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 5 ambulatory service providers out of the 15 are non-public; and (b) they are physically located in target Phase I Governorates of UHIS. Year 4: Payment of US$3 million upon verification that 3 licnesed Telemedicine service providers have been accredited by GAHAR and contracted by UHIA under the UHIS and that: (a) a minimum of 2 Telemedicne service providers out of the 3 are non-public; and (b) they are physically located in target Phase I Governorates of UHIS.

PBC 6 PBC 6: Strengthening provider payment PBR 6.1: Development and adoption of a provider payment mechanisms regulation by UHIA (US$5 million). PBR 6.2: Annual Description percentage of payments by UHIA that are paid in less than 60 days from the date of claim submission to UHIA by contracted providers in Phase I Governorates (US$15 million).

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Data source/ Agency UHIA, sample HCO and non-public providers.

Verification Entity Year 1: verify that UHIA has developed and officially adopted a regulation that details the various provider payment mechanisms that is: (a) ensuring best international practice for provider payment mechanisms; and (b) been adopted after going through a wide consultation process with public and private providers. Procedure Year 1: Verify that at least 20% of payments paid by UHIA back for contracted providers in target Phase I Governorates under UHIS are (a) paid back to providers in 60 days or less from the date of claim submission to UHIA by the respective providers. Payments to all provider entities regardless of the type of service provided are included in the count.

PBC 7 PBC 7: Strengthen governance of UHIS and enhance stakeholder participation and input PBR 7.1: Creation of coordination bodies for UHIS at the national level and in all Phase I Governorates. PBR 7.2: Development and adoption of the respective organizational structure and multi-year human resource plan for UHIA, GAHAR and HCO. PBR 7.3 Year on year reduction of staffing gap (combined positions in organizational structures) in UHIA, GAHAR Description and HCO. PBR 7.4 Dissemination of annual reports on patient satisfaction, grievances and utilization of services by UHIA and GAHAR. PBR 7.5: Establishment of a one-stop shop for licensing of private primary care services. PBR 7.6: Development and adoption of a process guide for hospital accreditation standards by GAHAR. PBR 7.7: Operationalization of a Big Data Analytics unit within UHIA. Data source/ Agency MOF, UHIA, GAHAR, HCO, third party data.

Verification Entity ForPBR 7.1: Year 1: Verify that: 1- a coordinating body has been created through a dedicated law or a governmental decree to serve as a dialogue and exchange platform between the stakeholders under the UHIS. Such platform should compose of: (a) UHIA; (b) GAHAR; (c) HCO; (d) MOF; (e) MOHP; (d) representatives from the private provider sector; (e) Patient- Rights/Groups representatives; and (f) any other related NGO’s, government agencies, etc that may be of benefit to the Procedure body. 2- The first meeting of the said body has been convened. For PBR Target 7.2 verify that UHIA, GAHAR and HCO have all developed and formally adopted, through a decree, their own organizational structures, respectively, and that each organization had developed a multi-year Human resource plan. For PBR Target 7.3: Years 1-4: Verify each year that the average percentage of filled (hired and onboarded) positions in the

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combined total number of positions in the UHIA, GAHAR an HCO officially adopted organizational structures are meeting the minimum identified yearly targets. For PBR Target 7.4: Years 1-4: Verify each year that UHIA & GAHAR have either together or separately report(s) that illustrates comprehensive data and analyses on patient satisfaction rates, grievances and utilization rates and surveys. The report(s) should: (a) based on international best practices; and (b) be acceptable to the Bank. For PBR Target 7.5: Year 1-4: Verify the establishment of a one-stop shop within a suitable government agency for all bureaucratic procedures for the licensing of private primary health care services. For PBR 7.6: Year 3: Verify that GAHAR has developed and officially adopted a detailed process guide for the hospital accreditation too that includes: (a) Intent of each standard, including clarification/interpretation of the requirements; (b) Measurable elements for each standard; (c) Scoring methodology - how to give score and calculate compliance percentage, including cases when some measurable elements are not applicable; and (d) Description of the survey process: how is compliance with each standard assessed, assessment criteria, what documents are reviewed during the survey, which staff is interviewed, what observations are made by the assessors. For PBR 7.7: Year 4: Verify that UHIA has established within its organization structure a dedicated functional Big Data Analytics unit that is: (a) properly staffed; (b) properly funded; (c) has TORs and internal processes that allows for the conduction of proper analyses for big data generated from the operations of UHIS. Payment: PBR Target 7.1: US$1,428,571 will be awarded upon verification of the creation of each coordination body and that it has been convened for a first meeting PBR Target 7.2: US$2,000,000 will be awarded upon verification that UHIA, GAHAR and HCO have all developed and formally adopted, through a decree, their own organizational structures, respectively, and that each organization had developed a multi-year Human resource plan. PBR Target 7.3: US$750,000 will be awarded each year respectively upon verification that the average percentage of filled (hired and onboarded) positions in the combined total number of positions in the UHIA, GAHAR an HCO officially adopted organizational structures are meeting the minimum identified yearly targets of : 50% for FY2020-21 (US$1,000,000); 75% for FY2021-22 (US$1,000,000), and 100% for FY2022-23 (US$1,000,000). PBR Target 7.4: US$1,250,000 will be awarded upon verification of the issuance of each annual report(s) for patient satisfaction, grievances and utilization surveys. PBR Target 7.5: US$3,000,000 will be awarded upon verification of the establishment of the one stop shop for licensing of private primary healthcare services.

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PBR Target 7.6: US$2,000,000 will be awarded upon verification of the issuance and official adoption of a process guide for hospital accreditation standards. PBR Target 7.7: US$2,000,000 will be awarded upon verification of establishment and functionality of a big data analytics unit within UHIA.

PBC 8 PBC 8: Development and adoption of a set of complementary regulations and strategies for UHIS PBR 8.1: Review of Decree No. 1948/2019 (targeting vulnerable groups for UHIS subsidies) and adopting a new framework (US$6,000,000). PBR 8.2: Preparation and disclosure of a SESA in accordance with the ESCP on the environmental, climate change and social risks associated with the roll-out of UHIS(US$2,000,000). PBR 8.3 Development and Adoption of a Green Description Health Insurance System Strategy (US$2,000,000). PBR 8.4 Satisfactory adoption and implementation by three hospitals (including 2 public hospitals one non-governmental hospital) of the green health insurance system strategy in Phase I Governorates (US$5,000,000). Data source/ Agency MOF, MOHP.

Verification Entity For PBR 8.1 ,Year 1: Verify that the Government of Egypt has finalized and adopted a revised strategy for targeting of vulnerable groups under UHIS that is: (a) based on lessons learned from the targeting mechanisms that were implemented since the beginning of UHIS; (b) based on a thorough analyses of the available data generated from actual implementation of UHIS; and (c) addresses the financial sustainability of the government financial support to the respective vulnerable groups under the UHIS. For PBR 8.2 Year 2: verify that the borrower has prepared and publicly disclosed a Strategic Environmental and Social Assessment (SESA) study that conforms with World Bank guidelines & standards. Procedure For PBR 8.3 Year 2: verify the adoption of a Green Health Insurance System Strategy. For PBR 8.4 Year 3: verify the satisfactory adoption & implementation of the Green Health Insurance System Strategy in 3 hospitals, of which 1 is non-public in target Phase I Governorates Payment: PBR Target 8.1: US$6,000,000 will be awarded upon verification of review of Decree No. 1948/2019 (targeting vulnerable groups for UHIS subsidies) and adopting a new framework. PBR Target 8.2: US$2,000,000 will be awarded upon verification of the successful preparation, Bank approval of and public

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disclosure of the SESA study associated with the roll-out of UHIS. PBR Target 8.3: US$3,000,000 will be awarded upon verification of development and adoption of a green health insurance system strategy. PBR Target 8.4: US$5,000,000 will be awarded upon verification of the implementation of the Green health insurance system strategy.

PBC 9 PBC 9: Number of Other Vulnerable People benefiting from PTES in Other Governorates PBR 9.1: Number of Other Vulnerable People benefiting from PTES in Other Governorates. Payment for utilizing inpatient Description healthcare services in Years 1 and 2 only through the PTES program for every 100,000 persons will be US$5,000,000. The minimum payment threshold is US$5,000,000 up to the maximum allocated amount. Data source/ Agency PTES informaton system

Verification Entity MOF, MOHP For PBR 9.1: Years 1-4: Desk review of PTES data on the number of people utilizing healthcre services in Years 1 and 2 only through the PTES program and are: a) 50 years of age or above; b) non-HIO beneficiaries; c) utilizing PTES for health services requiring in-patient admissions; and d) residing in the poorest 11 Governorates (by percentage share of the poor) outside of Procedure Phase I Governorates namely: Assyut, Sohag, Minya, North Sinai, Matrouh, Red Sea, Beheira, Qena, Beni-Suef, Giza and Cairo. Interview a random subset of such beneficiaries by phone (sampling method and sample size to be cleared by the World Bank).

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ANNEX 1: Sources for Eligible Expenditure Categories (EECs) for Project-financed Performance Based Conditions (PBCs)

COUNTRY: Arab Republic of Egypt Supporting Egypt’s Universal Health Insurance System

Amount EEC (Applicable Budget Chapter Financed and Agency) PBC PBR by the (Fiscal Years: 19/20, 20/21, World Bank 21/22, 22/23, 23/24, and 24/25) loan PBC 1: Number of people enrolled US$28 Chapters 1,2, and 4; UHIA with UHIA and empanelled with a million GP in Phase I governorates (excluding Targeted Vulnerable People) PBC 2: Number of Targeted US$180 Chapter 4; UHIA Vulnerable People enrolled with million UHIA and empanelled with a GP in Phase I governorates PBC 3: Development and adoption US$10 Chapters 1 and 2; UHIA and HCO by UHIA of a benefit package for million the continuum of care (primary care, secondary and tertiary hospital care) PBC 4: Supporting modular UHIS PBR 4.1 US$10 Chapters 1 and 2; UHIA and HCO information technology system million rollout PBR 4.2 US$10 Chapters 1 and 2; UHIA and HCO million PBR 4.3 US$10 Chapters 1 and 2; UHIA million PBR 4.4 US$5 Chapters 1 and 2; EASPMTM million PBC 5: Strengthening accreditation PBR 5.1: US$10 Chapters 1,2,4, and 6; HCO, and provider contracting million GAHAR, UHIA, and MOHP PBR 5.2: US$3 Chapters 1,2,4, and 6, HCO, million GAHAR, UHIA, MOHP; Egyptian Drug Authority PBR 5.3: US$3 Chapters 1,2,4, and 6; HCO, million GAHAR, UHIA, and MOHP PBR 5.4: US$3 Chapters 1,2,4, and 6; HCO, million GAHAR, UHIA and MOHP

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Amount EEC (Applicable Budget Chapter Financed and Agency) PBC PBR by the (Fiscal Years: 19/20, 20/21, World Bank 21/22, 22/23, 23/24, and 24/25) loan PBR 5.5 US$3 Chapters 1,2,4, and 6; HCO, million GAHAR, UHIA, and MOHP

PBC 6: Strengthening provider PBR 6.1 US$5 Chapters 1,2,4, and 6; UHIA payment million PBR 6.2 US$15 Chapters, 1,2,4, and 6; UHIA and million MOF PBC 7: Strengthen governance of PBR 7.1 US$10 Chapters 1 and 2; HCO, GAHAR, UHIS and enhance stakeholder million UHIA, MOF, and MOHP participation and input PBR 7.2 US$2 Chapters 1 and 2; HCO, GAHAR, million and UHIA PBR 7.3 US$3 Chapters 1and 2; HCO, UHIA, and million GAHAR PBR 7.4 US$5 Chapters 1 and 2; HCO, UHIA, and million GAHAR PBR 7.5 US$3 Chapters 1, 2, and 6; General million Authority for Investment, MOF, and UHIA PBR 7.6 US$2 Chapters 1 and 2; GAHAR million PBR 7.7 US$2 Chapters 1,2, and 6; UHIA million PBC 8: Development and adoption PBR 8.1 US$6 Chapters 1,2, and 6; MOF, MOHP, of a set of complementary million and Ministry of Social Solidarity regulations and strategies for UHIS (MOSS) PBR 8.2 US$2million Chapters 1 and 2; MOHP, Ministry of Environment (MOE), and MOSS PBR. 8.3 US$2 Chapters 1 and 2; MOHP, MOE, million and MOSS. PBR 8.4 US$5 Chapters 1 and 2; HCO and MOE million

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Amount EEC (Applicable Budget Chapter Financed and Agency) PBC PBR by the (Fiscal Years: 19/20, 20/21, World Bank 21/22, 22/23, 23/24, and 24/25) loan PBC 9: Number of Other PBR 9: Number of US$50 Chapter 4 Vulnerable People benefiting from Other Vulnerable million PTES in Other Governorates People benefitting from PTES in Other Governorates

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ANNEX 2: UHIS Implementation Schedule

COUNTRY: Arab Republic of Egypt Supporting Egypt’s Universal Health Insurance System

1. Successful health insurance implementation will require clear-cut role definitions, timelines, and deft monitoring. Egypt has created four agencies under the UHIL to implement the UHIS. These agencies are: (a) (UHIA, which serves as the ‘purchaser’; (b) HCO - the ‘public provider’ of health services; (c) GAHAR - the ‘accreditor’ for health quality and patient safety; and (d) the EASPMTM - the ‘public procurer.’ The UHIS will be implemented in six phases, with the first phase as a pilot phase that will set the foundation and platform for a future large-scale effective program implementation. The first phase will require effective coordination and role definition among the four agencies. The implementation will require stringent monitoring and accountability with measures for course correction, if any. Business processes, protocols, guidelines, IT systems, and architecture will be laid down as state of the art, benchmarked with the best practices across the world. The sequencing of reform and implementation priorities of the four agencies are as detailed in the following tables:

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Table 2.1. UHIA Yearly Implementation Outline Yearly Implementation Outline Sequence No UHIA Parameter Year 1 Year 2 Year 3 Year 4 Implementation of the multiyear staffing 1 50% 75% 100% 100% plan (PBC 7) Enrollment of beneficiaries (PBCs 1, 2, 2 √ √ √ √ and 8) 3 Benefit package and costing (PBC 3) √ √ √ √ Episode 4 Strategic purchasing (PBC 6) based/capitation Continued revision DRG 25 packages DRG 50 packages /FFS Contracting public/private providers (PBC 5 √ √ √ √ 5) Integrated IT systems architecture, security, and Feedback/ 6 Basic modules seamless Full-fledged IT compliance (PBC 4) responsiveness personal records Biometric-enabled unique Health 7 √ √ √ √ identification for all (PBC 4) 8 Transaction management (PBC 4) √ √ √ √ 9 Claims processing (PBC 6) √ √ √ √ Capacity building (including training 10 √ √ √ √ modules) (PBC 7) 11 Data standards (PBC 4) Finalized √ √ √ 12 Demand awareness management (PBC 7) Finalizing strategy √ √ √ 13 Feedback and responsiveness (PBC 7) Finalizing strategy √ √ √ Deployment of 14 Fraud and abuse management Finalizing protocols Audit teams √ systems 15 M&E and business intelligence √ √ 16 Community engagement √ √ √ √ 17 Referral protocol and continuum of care Strategy approved √ √ √ Implementation 18 Revenue collection Strategy approved √ √ started Implementation 19 Fund management and investment Strategy approved √ √ started

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Yearly Implementation Outline Sequence No UHIA Parameter Year 1 Year 2 Year 3 Year 4 Financial modelling, reconciliation, and Implementation 20 Strategy approved √ √ financial control started Formalizing Formalizing 21 Data dictionaries (PBC 4) guidelines/ICD guidelines/ICD √ √ coding coding Standard treatment workflows for all Deployment of 22 Finalizing protocols √ √ treatments systems 100% digital (paperless) registry for Implementation 23 Strategy approved health infrastructure started Unique Health Workforce Registry for the Implementation 24 Strategy approved country started 100% m-Governance (everything works Implementation 25 Strategy approved through mobile) started Formalizing 26 Third-party administrators Selecting agencies √ √ strategy Formalizing pay Implementing pay for 27 Quality of care and accreditation (PBC 5) √ √ for performance performance for hospitals Formalizing 28 Health technology assessment √ √ √ strategy 29 Supply chain management Manual IT supported IT integrated Artificial intelligence based 30 Interoperability Planning Finalizing strategy √ √ Big data analytics and evidence-based 31 Studying patterns Finalizing agencies √ √ decision making ( PBCs 4 and 8) Public providers’ autonomy and claim Finalizing 32 Capacity building √ √ utilization guidelines

Table 2.2. GAHAR Yearly Implementation Outline Yearly Implementation Outline Sequence No GAHAR Parameter Year 1 Year 2 Year 3 Year 4 Implementation of the multiyear 1 50% 75% 100% 100% staffing plan (PBC 7)

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Yearly Implementation Outline Sequence No GAHAR Parameter Year 1 Year 2 Year 3 Year 4 Quality of care and accreditation Quality guidelines and safety 2 Start benchmarking Quality ratings Quality ratings (PBC 5) protocols 3 Feedback and responsiveness (PBC 7) Finalizing strategy √ √ √ Table 2.3. HCO Yearly Implementation Outline

Yearly Implementation Outline Sequence HCO No Parameter Year 1 Year 2 Year 3 Year 4 Implementation of the 1 multiyear staffing plan 25% 50% 100% 100% (PBC 7) IT systems hardware/provider 100% of health 2 √ √ √ enrolment/transaction facilities (PBC 4) 50% of health 3 Training on IT transactions 100% √ √ facilities 25% as local 100% centrally 4 Supply chain maintenance √ √ purchase procured Referral protocols and 5 Manual IT based √ √ continuum of care Feedback and Finalizing 6 √ √ √ responsiveness (PBC 7) strategy Fraud and abuse Finalizing 7 √ Audit teams Audit results prevention protocols

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Table 2.4. EASPMTM Yearly Implementation Outline

Yearly Implementation Outline EASPMTM Sequence No Parameter Year 1 Year 2 Year 3 Year 4 Implementation of the multiyear staffing 1 25% 50% 100% 100% plan (PBC 7) 50% of all 100% of all 2 IT-enabled procurement procurements procurements 3 Health Technology Assessment (PBC 4) Formalizing strategy √ √ √ 4 Feedback and responsiveness (PBC 7) Finalizing strategy √ √ √

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