Morocco - Health Financing and Management Project_Implementation Completion Report (2007)

8/14/2019 Morocco - Health Financing and Management Project_Implementation Completion Report (2007)

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Document of

The World Bank

Report No:ICR0000188

IMPLEMENTATION COMPLETION AND RESULTS REPORT(IBRD-44240)

FOR A

LOAN IN THE AMOUNT OF 61. 1 MILLION EUROS

(US$66.0 MILLION EQUIVALENT)

TO THE

KINGDOM OF MOROCCO

FOR A

HEALTH FINANCING AND MANAGEMENT PROJECT

September 27, 2007

Human Development SectorMiddle East and North Africa Region

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


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CURRENCY EQUIVALENTS

Exchange Rate Effective December 31, 2006

Currency Unit = MAD

MAD1.00 = US$ 0.12US$ 1.00 = MAD 8.3

FISCAL YEARJanuary 1 December 31

ABBREVIATIONS AND ACRONYMS

AMO Assurance maladie obligatoireANAM Agence nationale de lassurance maladie

BAJ Barnamaj Al Aoulaouiyat Al Ijtimaiya/ Social Priorities Program

DO Development Objectives

EC European CommissionEIB European Investment Bank

FAMS Financial and Accounting Management System

GOM Government of Morocco

HR Human ResourcesICR Implementation Completion Report

ISR Implementation Status Report

M&E Monitoring and EvaluationMoF Ministry of Finance

MoH Ministry of Health

PAGSS Projet dappui la gestion du secteur de la sant

PDO Project Development Objectives

PEH Plan dtablissement de lhpital

PFGSS Projet de financement et de gestion du secteur de la sant

PU Project Unit

QAE Quality at Entry

QAG Quality Assurance GroupQI Quality Improvement

RAMED Rgime dassistance mdicale pour les conomiquement diminus

SIG-HO Systme dinformation et de gestion hospitalire

TA Technical Assistance

UMER Unit de la mise en oeuvre de la rforme

USP Unit de suivi du projet

Vice President: Daniela Gressani

Country Director: Theodore Ahlers

Sector Manager: Akiko Maeda

Project Team Leader: Jean-Jacques Frre

ICR Primary Author: Sameh El-Saharty


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Kingdom of Morocco

Health Financing and Management Project

CONTENTS

A. Basic Information 1B. Key Dates 1C. Ratings Summary 1D. Sector and Theme Codes 2E. Bank Staff 2F. Results Framework Analysis 2G. Ratings of Project Performance in ISRs 4H. Restructuring 4I. Disbursement Graph 5Project Context, Development Objectives and Design 6

Key Factors Affecting Implementation and Outcomes 9Assessment of Outcomes 13Assessment of Risk to Development Outcomes 16Assessment of Bank and Borrower Performance 17Lessons Learned 18Comments on Issues Raised by Borrower/Implementing Agencies/Partners 19Annex 1: Project Costs and Financing 21Annex 2: Outputs by Component 22Annex 3: Economic and Financial Analysis 24Annex 4: Bank Lending and Implementation Support/Supervision Processes 25Annex 5: Beneficiary Survey Results 27

Annex 6: Stakeholder Workshop Report and Results 28Annex 7: Summary of Borrowers ICR and/or Comments on Draft ICR 29Annex 8: Comments of Cofinanciers and Other Partners/Stakeholders 39Annex 9: List of Supporting Documents 40Annex 10: Status of Introduction of Hospital Management Tools and HospitalDevelopment as of Project Closing 41


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A. Basic Information

Country: Morocco Project Name:MA-HEALTH

MANAGEMENT

Project ID: P005525 L/C/TF Number(s): IBRD-44240

ICR Date: 09/27/2007 ICR Type: Core ICRLending Instrument: SIL Borrower: GOV.OF MOROCCO

Original Total

Commitment:USD 66.0M Disbursed Amount: USD 30.9M

Environmental Category: B

Implementing Agencies:

Direction des Ambulances et des soins obligatoires

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original DateRevised / Actual

Date(s)

Concept Review: 04/22/1994 Effectiveness: 11/29/1999 11/29/1999

Appraisal: 11/07/1997 Restructuring(s): 10/21/2003

Approval: 12/17/1998 Mid-term Review: 12/17/2005 05/04/2004

Closing: 12/31/2003 12/31/2006

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Unsatisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Unsatisfactory

Borrower Performance: Moderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision:Moderately

Unsatisfactory

Implementing

Agency/Agencies:

Moderately

Unsatisfactory

Overall BankPerformance:

ModeratelyUnsatisfactory

Overall BorrowerPerformance:

ModeratelyUnsatisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

PerformanceIndicators

QAG Assessments

(if any)Rating

Potential Problem Project

at any time (Yes/No):No

Quality at Entry

(QEA):Satisfactory


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Problem Project at any

time (Yes/No):Yes

Quality of

Supervision (QSA):

Moderately

Unsatisfactory

DO rating before

Closing/Inactive status:

Moderately

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 3 3

Compulsory health finance 3 3

Health 94 94

Theme Code (Primary/Secondary)

Decentralization Secondary Secondary

Health system performance Primary Primary

E. Bank Staff

Positions At ICR At Approval

Vice President: Daniela Gressani Kemal Dervis

Country Director: Cecile Fruman Daniel Ritchie

Sector Manager: Akiko Maeda Jacques F. Baudouy

Project Team Leader: Jean-Jacques Frre Anne M. Pierre-Louis

ICR Team Leader: Jean-Jacques Frre

ICR Primary Author: Sameh El-Saharty

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

The objectives of the project and the description of the other components are unchanged.

The objectives of the project are :

a) Improve the efficiency and the quality of care in 14 public hospitals bystrengthening strategic planning capacity and introducing organizational andmanagement tools and quality control mechanisms;

b) Mobilize additional resources, while preserving equity, by assisting theGovernment in introducing new financing mechanisms; and

c) Strengthen MOH's policy formulation and sector management capacity byassisting MOH in adjusting and performing its mandate in the context of the

Regionalization Law and provide MOH administrative staff with the managementtools required.


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Revised Project Development Objectives (as approved by original approving authority)

The PDOs were not revised.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value Achieved

at Completion or

Target Years

Indicator 1 : Number of persons trained overseas

Value

quantitative or

Qualitative)

045 (overseas: 36,

local: N/A)

-71 overseas, 824 local

-training in Morocco

was mainly focused on

upgrading and

developing the skills of

professional staff

(between 2003 and2005, cumulative

PFGSS and CIDA)

Date achieved 12/01/2001 12/01/2006 12/01/2006

Comments

(incl. %

achievement)

The indicator is not robust enough to measure efficiency or quality of hospital

services.

Indicator 2 : Personnel satisfaction

Value

quantitative or

Qualitative)

0

Based on survey to

be conducted at

end of project

Date achieved 12/01/2001 12/01/2006

Comments

(incl. %

achievement)

A survey on client satisfaction was planned but not conducted and a survey on

personnel satisfaction was conducted in October 2006. Please refer to Annex 5 for

details.

Indicator 3 : Number of hospitals with medical waste systems in place

Value

quantitative or

Qualitative)

0 5

Date achieved 12/01/2001 12/01/2006

Comments

(incl. %

achievement)

The five sterilization grinders were installed and functional by the end of the project.

Indicator 4 : Average occupancy rateValue

quantitative or

Qualitative)

54.9% 70%

Date achieved 12/01/2001 12/01/2006

Comments

(incl. %

achievement)

Average occupancy rate is a reasonable measure of hospital efficiency. The

indicator, however, did not significantly increase as the construction of project

hospitals was only just completed at project closing. The construction was executed


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in several wards and largely affected the hospital central units (radiology, laboratory,

operating rooms). The fact that the hospital staff was able to maintain the level of

services during construction attests to their dedication and hard work.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : % committed funds; engaged; disbursed

Value

(quantitative

or Qualitative)

0,0,0100%; 100%;

100%

Date achieved 12/01/2001 12/01/2006

Comments

(incl. %

achievement)

There was no baseline value assigned.

Indicator 2 : Proportion of public hospitals are autonomous

Value

(quantitative

or Qualitative)

38% 90%

Date achieved 12/01/2001 12/01/2006

Comments

(incl. %

achievement)

In addition to the MOH hospitals, two university hospitals became autonomous

during the project period, giving a total of 4 autonomous university hospitals.

G. Ratings of Project Performance in ISRs

No.Date ISR

ArchivedDO IP

Actual

Disbursements

(USD millions)

1 03/02/1999 Satisfactory Satisfactory 0.00







8 03/15/2001 Satisfactory Satisfactory 3.279 09/13/2001 Satisfactory Satisfactory 3.27



12 03/13/2003 Unsatisfactory Unsatisfactory 4.27

13 06/29/2003 Unsatisfactory Satisfactory 4.55




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19 08/07/2005 Moderately Satisfactory Moderately Satisfactory 18.16

20 11/16/2005 Moderately Satisfactory Moderately Satisfactory 20.69

21 06/30/2006 Moderately Satisfactory Moderately Satisfactory 27.9622 12/17/2006 Moderately Satisfactory Moderately Satisfactory 33.31

H. Restructuring (if any)

ISR Ratings at

RestructuringRestructuring

Date(s)

Board

Approved

PDO Change DO IP

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made

10/21/2003 N U S 4.76

I. Disbursement Profile


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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

In the early 1990s, Moroccos economic performance had slowed mainly because of unfavorable

external events (droughts), which resulted in slackened growth and social inequity. In the late 1990s,Morocco was undergoing a major transition led by King Mohamed VI, which resulted in opening ofthe political process and stressed the rule of law. Nevertheless, the economy was still suffering fromslow growth together with high unemployment and poverty rate at 14% and 19%, respectively.Moreover, the gaps and inequalities between rural and urban areas were profound. The Government,realizing that these factors might undermine the political transition if unchecked, adopted a nationalSocial Priorities Program that covered priority health, education and social services.

In the health sector, the country made steady progress as reflected by an increase in life expectancy atbirth to 67 years, a decrease in infant mortality rate to 48 deaths per 100,000 live births, and anincrease in immunization coverage to 94%. The World Bank (WB) supported the social programthrough the Basic Health Project/BAJ (Barnamaj Al Aoulaouiyat Al Ijtimaiya) (1996 2003) aimed atstrengthening preventive and basic curative care in the poorest 14 provinces.

Despite the progress made and the focus on basic health services, the health system still faced majorsystemic challenges:

o Government budgetary allocations for health were among the lowest compared tocountries with similar income level. In 1999, health expenditures were about 4.5%of GDP which was equivalent to around US$56 per capita. Moreover, only 16.4% ofthe population was covered by health insurance.

o The hospital network received only about 56% of public resources allocated forhealth and suffered from the deterioration of the physical infrastructure, which led topoor quality of services.

o The effectiveness of the health systems was low due to weak institutional capacity aswell as overly centralized management and decision-making processes.

o Most of the private sector service providers were concentrated in the two largestcities (Rabat and Casablanca).

Given these challenges, the Government of Morocco (GOM) requested the WB to further support thehealth sector in order to complement the Basic Health Project, which addressed the equity of ruralaccess to basic health care, to ensure the sustainability of the BAJ, and support the then recentlyratified regionalization law (1997) as the Government's effort to implement an articulated andsustainable Social Development Strategy.

In this context, the Health Sector Financing and Management Project was developed to address for thefirst time central and systemic sectoral issues such as inefficiency, inequity, resource mobilization andweak management capacity, which would have a significant impact on the long term sector

development and sustainability.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

According to the loan agreement, the Project Development Objectives (PDOs) were to assist theBorrower in: (i) improving the efficiency and quality of public hospital services, (ii) introducing newfinancial mechanisms for the health sector, and (iii) strengthening the Ministry of Healths (MOH)policy formulation and sector management capacities.


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The achievement of the above PDOs would be demonstrated by the following key indicators:

To measure the improvement of the efficiency and quality of care in project hospitals:o Percentage of personnel adequately trained and redeployed in project hospitalso Rate of client satisfactiono Rate of personnel satisfaction

To mobilize additional financial resources:o Percent increase in the revenues compared with 1997/1998o Percent increase in cost recovery (from health insurance patients and fee for services)

To strengthen MOH policy formulation and sector management capacity:o Percent of the non-salary recurrent budget allocated to the basic health services

network out of the total MOH recurrent budgeto Percent of the non-salary recurrent budget allocated to the MOH hospital network out

of the total MOH recurrent budgeto Percent of the non-salary recurrent budget allocated to the administration out of the

total MOH recurrent budgeto Rate of commitment and disbursement of the investment budget.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and

reasons/justification

The PDOs were not revised.

1.4 Main Beneficiaries

At the local level, the primary beneficiary group (affected mainly by component I of the project) wasthe population living in the catchment areas of the hospitals originally targeted, which was estimatedat 7 million persons. The project would provide this population with better access and improvedquality of health care services.

Also, the personnel of the project hospitals (both managerial and medical staff) would benefit from theproject as a result of a better work environment, including new facilities and equipment, and trainingas well as adoption of new management tools that would allow efficient use of resources and hospitalautonomy.

At the national level, the MOH, and the population at large, were also to benefit from the project, as itwould trigger nationwide hospital reform (component I), and implement and develop new financingmechanisms that would mobilize additional resources for the sector and increases health insurancecoverage (component II).

1.5 Original Components (as approved)

The three original components of the project were closely linked and interdependent. The newfinancing mechanisms would have a significant impact on hospital autonomy, and improved policyand decision-making capacity in the MOH would be essential to the long term sustainability ofhospital management and sector financing reforms:

Component I: Strengthening hospital management and improving service quality in 14 hospitals(total estimated cost: US$62.5 million). Improving hospital performance would be achieved bystrengthening hospital strategic planning capacity and introducing organizational and managementtools, procedures and information systems needed for decision-making and resource-allocation


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processes. Improving the quality of health care in selected hospitals would be realized bydefining and implementing norms for the organization and delivery of clinical and other services,establishing quality control mechanisms, implementing staffing norms and providing training,rehabilitating facilities, and providing medical equipment.

Component II: Improving health sector financing (total estimated cost: US$1.7 million) bydeveloping a National Health Insurance Scheme (NHIS) with mandatory enrollment foremployees in order to increase health insurance coverage from 15% to 30% of the population anddeveloping mechanisms to ensure health care for the poor.

Component III: Strengthening the MOH institutional capacity (total estimated costs: US$1.8million) by assisting the MOH in performing its new functions in the context of theRegionalization Law and implementing its sector strategy as well as providing it with themanagement and data tools for policy formulation and decision-making.

1.6 Revised Components

In July 2003, the GOM requested the Bank to cancel 18.0 million Euros, amend the project description,and extend the project closing date by three years to December 31, 2006.

The justification for this request included slow disbursement and delayed implementation of theproject components, particularly the hospital reform program. The hospital renovations had to bephased in for each hospital, starting with one section and then moving to another in order to minimizedisruption of services to the population, the additional time required had not been originally foreseen.Moreover, there was a need for several prerequisites such as the Hospital Development Plans (HDPs)and Management Tools, which were not completed due to the delay in selecting the technicalassistance.

In October 2003, the project was restructured and approved by the Regional Vice President. ThePDOs, however, were not changed; only the description of the first component was modified to read:Strengthening Hospital Management and Improving Hospital Service Quality Development andimplementation of a model for upgrading Project Hospitals through: (i) the introduction of new

management tools and procedures in about 14 Project Hospitals; and (ii) the modernization ofinfrastructure and equipment in about 5 Project Hospitals.

The project implementation plans for the extension phase indicated that the HDPs would be developedfor the 14 hospitals and that the technical assistance (TA) would support the introduction of the coremanagement tools in the 5 hospitals receiving infrastructure improvements and equipment.

The description of the other components and the key performance indicators remained unchanged butthe target indicators were refined. The project hospitals were changed from 14 to 5 hospitals.

1.7 Other significant changes

There were two other changes associated with project restructuring in October 2003:

The extension of the project closing date for three years from December 31, 2003 toDecember 31, 2006. The purpose of the extension was to provide adequate time to completethe introduction of management tools and physical renovations and equipping of the fivehospitals.

The technical assistance contract was extended for an additional two years to fully integratethe interventions in all 5 hospitals, and strengthen institutional capacity.


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2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

The project concept note was approved in April 1994. The appraisal was conducted in November1997. The project was approved by the Board in December 1998 and became effective in November1999. This is more than five years from concept to effectiveness. The project appraisal document,however, captured to a great extent the changes in the political, economic and sector environments andthe team was able to adapt project design to the evolving sector context and government strategicdirections.

Moreover, the background analysis and the rationale for the Banks intervention were sound, and thelessons learned from the Health Development Project, the Health Sector Investment Project, and theBasic Health Project/BAJ were incorporated in the design of this project. However, many of thelessons learned from previous projects were not fully applied to this project.

In terms of Quality at Entry (QAE), the project development objectives and the design of the

components at the outset were in line with both the Government and Bank strategies. The improvedbasic health services realized under the BAJ encouraged the Government to proceed with the Bank inimproving the curative services at the secondary hospital level. In addition, political commitment forthe expansion of health insurance coverage was reflected through the preparation of a draft law in1995 to increase formal health insurance coverage from 15% to 30% of the population. Moreover, anew Regionalization Law was promulgated in 1997, which provided the framework of theregionalization activities envisaged under Component III of the project.

However, neither the Government nor the Bank was realistic in terms of the timeframe needed toimplement such a complex reform program and such ambitious objectives; the risks were alsounderestimated. Improving efficiency and quality in 14 hospitals was not realistic, particularly in lightof implementation readiness. At effectiveness, the implementation plan and the procurementpackages for the first year were not ready. It took almost one year to select the TA for hospital reform

primarily due to a lack of appreciation by the MOH of the role to be played by the TA. As a result,the contract was signed in 2001 and the TA was not mobilized until early 2002. Project managementstructure and implementation arrangements could have been more effective; the creation of a hospitalreform unit (Unit de la mise en oeuvre de la rforme - UMER) within the Directorate of Hospital andAmbulatory Care reinforced the need for better coordination between hospitals, health district offices,and the central ministry. Similarly, the project objectives related to improving health sector financingand strengthening MOH policy and strategic planning were ambitious given the political climate at thetime, particularly for expanding health insurance coverage. The objective could not have beenrealistically achieved with an allocation of only US$1.8 million for TA and training, whichrepresented only 2.5% of the project budget. In addition, the TA focused mainly on supportingComponent I with insufficient support to ensuring coordination between the three components.Project readiness was also affected by the lack of an Operations Manual, which was only finalized in2001. Finally, the lack of a monitoring and evaluation plan and system was a major weakness.

In retrospect, the ICR team is cognizant of the fact that many of the political economy factors weredifficult to identify at appraisal. However, project readiness could have been further strengthened atthe outset of the project.

The QAG did a QAE review of this project and it was rated satisfactory.


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2.2 Implementation

The overall rating for project implementation is Moderately Satisfactory. The project wasimplemented at two different speeds: before and after restructuring. From November 1999 toDecember 2002, the project was characterized by slow implementation progress, reflected by a lowdisbursement rate of 6.5%. The project focused on providing high caliber TA as part of the Bank

team to assist the government in the reform process, working with the government on getting the TAon board, and the creation and strengthening of the Project Unit (Unit de Suivi du Projet - USP).Following the 2003 restructuring, project implementation picked up and significant progress wasmade by the revised project closing date. The assessment of project implementation is summarized bycomponent below.

Implementation of Component I is rated Moderately Satisfactory. There were significant delays in thestart up of this component, due to the multiplicity and complexity of the activities to be undertaken.The hospital reform unit, UMER, was created in late 2000 to coordinate this component and to serveas an interface between the central level, the regions and the 14 project hospitals as well as the TA. Inaddition, the selection of the TA team to provide support on the reforms took longer than expected,nearly 20 months, due to the political environment and procurement procedures. As a result, the TAteam only began actual work in January 2002. Following restructuring, implementation proceeded

broadly on two pillars: (i) physical improvement of hospital infrastructure through investment inbuilding and medical equipment; and (ii) development and introduction of modern management tools.Almost all planned hospital investments in buildings and medical equipment were completed by theproject closing date but the introduction of management tools was fragmented. By project closing, theproject hospitals provided a potentially successful model for replication. The cost of this endeavorwas about US$9.0 million per hospital for infrastructure improvements, as well as the modernizationof hospital management tools for improvements in quality of care. The government agreed with theEuropean Investment Bank to upgrade an additional 20 hospitals and to introduce the managementtools developed under the Bank-financed project. Nevertheless, the sustainability of the hospitalreform component remains a challenge for these hospitals, particularly in the absence of anyindication that additional financial resources will be mobilized whether from a commensurate increasein the MOH budget for maintenance or from implementing the health financing scheme for the poor(Rgime dassistance mdicale pour les conomiquement diminus - RAMED). It is to be noted that,although the MOH budget has been steadily increasing by about 10% annually since 2003, it hasremained focused for the most part on improving the primary health care services and the drug supplyin hospitals.

Annex 10 provides additional information on the status of the implementation of management toolsand the status of each hospital at project closing.

Implementation of Component II is rated Moderately Satisfactory. Progress was minimal during thefirst couple of years of the project; however, several legal frameworks and decrees have beenapproved in the last 2-3 years to increase insurance coverage for the population. Progress was markedby the ratification of the Framework Law on Mandatory Health Insurance ( Assurance MaladieObligatoire AMO) in August 2002 ( Loi-Cadre 65-00) that also established the National Health

Insurance Agency (Agence Nationale de lAssurance MaladieANAM). However, it took almost threeyears to initiate the implementation of the AMO scheme with the appointment of the ANAM Directorin June 2005 followed by adoption of nine new government decrees related to the establishment of theAMO in August 2005. The publication of these decrees made the AMO effective as of September 1,2005. Subsequent decrees were issued in 2006 that resulted in the extension of the health insurancecoverage to new groups of the population. By project closing, it was estimated that the AMO wascovering about 25% of the population, including the coverage of new groups of professionals andinformal working groups through new schemes; implementation of RAMED was postponed in orderto prepare additional studies to better assess the political, fiscal and economic implications.


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Implementation of Component III is rated Moderately Unsatisfactory. The implementation of thiscomponent focused primarily on the completion of two critical studies. The study on theOrganizational and Technical Audit of the MOH was completed in 2005, and the other study on thecomprehensive Human Resources Strategy for the MOH, was completed in 2006. In August 2005,the MOH launched the regionalization process in the pilot area referred to as the Oriental Region by

issuing the Ministerial Circular No. 3 that created a new regional health structure, which was part ofthe budgetary support conditionality of the European Commission (EC) project. The regionalizationaspect of the reform program, however, was limited to the deconcentration of planning andmanagement of some functions and fell short of the envisaged devolution of broader functions such ashuman resources management and financial autonomy.

There were several factors either under the control of the Government or the Implementing Agenciesthat influenced the implementation of the project. These are discussed below.

Factors subject to the control of the Government. The key factor that influenced the projectimplementation at that level was the Government commitment to the different reforms, which was notconsistent over time and across the different Government agencies, particularly for health insurance

and regionalization reforms. For the former, progress was only made following the creation of aworking group at the Prime Ministers level in 2001. A "Committee of Experts" appointed by the PMsteered the preparation of a number of studies and draft legislation on the mandatory health insurancescheme (AMO) and the health financing scheme for the poor (RAMED). However, the weakinstitutional capacity was another binding constraint as it took almost three years to initiate theimplementation of the AMO scheme after the ratification of the Framework Law in 2002. Althoughthe proposed laws on both AMO and RAMED were to be submitted to Parliament, the Governmentproceeded with only the AMO, and the implementation of RAMED was postponed in order to betterassess the political, fiscal and economic implications. The coordination of donor support was anotherkey factor as exemplified by the EC-funded project (PAGSS) that was the main vehicle to field testand implement the regionalization aspect of the reform program, which resulted in the creation of theOriental health region. However, the pace of the regionalization reform was extremely slow andlimited in scope primarily due to: (i) the political economy surrounding the balance of power between

the central level and the regions in the allocation and management of resources; and (ii) the difficultyof decoupling the health sector from other sectors and the civil administration code.

Factors subject to the control of the implementing agencies. The delayed implementation of theinvestment plan was attributed to a variety of factors, including: (i) delays in the procurement of keycontracts; (ii) unexpected technical issues that delayed construction (e.g., water found below theconstruction site at Settat); (iii) cancellations of works with some contractors due to poor performanceand re-awarding of the contracts; and (iv) lack of synchronization of the procurement of medicalequipment with completion of civil works. As for the management tools, the implementation wascomplicated by the MOH failure to provide sufficient local counterparts to disseminate themanagement tools to the other 9 hospitals. Lack of qualified personnel was a key binding constraintto successful implementation and adoption of the tools. Other factors include: (i) lack of coordinationbetween all the project hospitals; (ii) differences in the pace of progress between hospitals; and (iii)frequent changes in hospital management personnel (e.g., Settat). On the other hand, the quality of theoverall TA financed under the project was high and played a key role in implementing the hospitalreforms and guiding the health insurance reforms.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

The rating for the Monitoring and Evaluation (M&E) system was Unsatisfactory as it was one ofthe weakest and most poorly implemented parts of the project. By project closing date, the M&Esystem provided little information on project impact, primarily as the indicators (outcome and


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increased during the last two years of the project after Bank missions revealed a number of contractsthat had not been previously claimed for reimbursements. Major efforts were made to clear backlogsand improve financial management flow. Despite the capacity building that took place duringimplementation, and the systems purchased, it is unlikely that the PU will be sustained for reasons ofpragmatism, as the PU was set up outside of the MOH, although the personnel are now well versed inBank procedures. The 2005 audit report was received by the Bank, and the 2006 audit report is

expected to be received by end June 2007.

Procurement management was Moderately Satisfactory. Post-reviews revealed some procedurescontrary to Bank guidelines (one envelope system for consultants), and a lack of awareness of Bankguidelines with the result that National Procedures were applied. In addition, procurement wasaffected by the compartmentalization of the MOH Departments; slow implementation of procurementactivities due to lengthy national procedures; review processes by the Bank; and internal paymentprocesses. Nevertheless, the five hospitals under renovation/construction and associated equipmentwere delivered by the project closing date. In addition, the staff of the PU provided regularsupervision in the field, and training to regional staff in management following the mid-term mission.

2.5 Post-completion Operation/Next Phase

Given the limited scope and fragility of the hospital reform achievements, there will be a need toconsolidate and sustain the gains, which may be attained through the new European Investment Bank(EIB) funded project that aims at expanding the reform to an additional 21 hospitals. It is importanthowever, to focus first on the five project hospitals and formally involve the staff in the efforts toextend these reforms to other hospitals, particularly given that the experience gained from the projectis both pertinent and practical. While some of the PFGSS hospital directors are involved in the newMOH project as experts, there should be a systematic plan in place. Additionally, the EIB fundedproject will mobilize foreign TA to accompany the reforms in the new hospitals. Given that themanagement tools were not fully operational, there is a risk of the EIB TA developing new toolsinstead of capitalizing on previous efforts. The MOH is aware of these risks and is planning toreinforce the gains of the PFGSS in the five hospitals by relying on the existing tools and improvingthe processes before they are put into use in the selected hospitals. Furthermore, there was little effort

made to allocate Operation & Maintenance budget to ensure the sustainability of the projectinvestments.

On the other hand, in the area of health financing reform, the extension of health insurance coverage islikely to be sustained but the lack of such coverage for the poor may erode the few gains made inhospital reforms due to the fact that the poor constitute more than 70% of the users of public hospitalservices.

As for the institutional capacity in support of the regionalization process as well as the reforms ingeneral, the project helped in the transformation of a cadre of MOH staff at the central and hospitallevels, who may be considered as a driving force for the reform but do not constitute a sufficientcritical mass to sustain it.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The relevance of the project objectives, design and implementation is rated Moderately High. ThePDOs remain relevant to the current health sector situation. Increasing the efficiency of the healthsystem, particularly public hospitals that consume a large share of the MOH budget, and improvingthe quality of health services together with extending health insurance coverage and decentralizingsome management functions and responsibilities, are key objectives that continue to feature


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prominently in the countrys national programs and the human development pillar of the Banksassistance strategy. Moreover, the recently approved Health, Nutrition, and Population (HNP)Strategy of the Bank stresses the increasing importance of dealing with health financing systems inaddressing the growing burden of diseases due to the health transition.

The project design was quite strong on the TA aspects, which were covered not only through the

project but also through Bank supervision missions. Most of the TA reports were of high quality andvery relevant to the reform challenges that continue to face the Moroccan health system.

Project implementation pace was extremely slow given the complexity of the reforms. Theinstitutional arrangements could have been more effective; there was an overemphasis on the physicalinvestments, and at the beginning of project implementation, the linkage of the three components wasweak but improved with time.

3.2 Achievement of Project Development Objectives

The overall achievement of the Project Development Objectives is rated Moderately Unsatisfactory.

At the outset, it is important to stress that the project performance indicators established at projectappraisal and after restructuring were not sufficiently monitored, which made it difficult to assessproject achievements. In addition, given the delays in implementation, the indicators are also affectedby the fact that hospital construction was not completed until the revised project closing date. Anadditional effort was made during the ICR preparation to collect and analyze new information in orderto assess project performance, particularly for Component I, given that it constituted more than 90%of project financing. The assessment of each PDO is detailed below.

The achievement of the objective of Improving efficiency and quality of public hospital services.

Despite the functionality of some of the upgraded hospital services and the introduction of newmanagement tools in the five project hospitals, the project only partially achieved the stated DOrelated to improved efficiency and quality in these hospitals.

Since the investment program was completed by project closing and most of the upgraded services

were not fully operational, it was not possible to assess the efficiency or the quality of the upgradedservices. In fact, most of the utilization indicators deteriorated in 2005 (data were not available for2006). This was expected as many of the critical services in project hospitals were affected by theongoing civil works. For example, the average hospital occupancy rate did not improve as it remainedat about 57% and the number of hospital days was significantly reduced. Similarly, the fullimplementation of the package of management tools was delayed and not uniform across the 5 projecthospitals.

In terms of provider satisfaction, a survey concluded that there was an improved perception ofproviders regarding the upgraded services and working conditions (64%) as well as the managementsystem (56%). However, the ICR team did not find the survey methodology robust enough to supportthe survey findings. For example, some of the services surveyed were not fully operational at the timeof the survey. Also, there was a planned Beneficiary Survey which was not conducted.

It is worth noting that the project succeeded in improving the physical infrastructure in the projecthospitals, introduced new clinical services, and increased hospital capacity. However, all could not beobjectively measured at project closing. Additional information was collected during the ICRpreparation in order to assess the project outcomes beyond what was provided in the M&E system.To this effect, the team visited another five hospitals outside of the project interventions (El-Jadida,Ibn Zohr in Marrakech, Ibn AlKhatib in Fs, Essalama in Kalaa Segharna, and Ttouan) and notedsignificant differences in the way the hospital managers and medical staff interacted, planned, andmanaged the hospital functions. This transformation in the culture of managing public hospitals in


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Morocco was an important project outcome, which was not adequately evaluated. It is thereforehighly recommended to conduct a post completion evaluation in two years to assess the actual impactof the project in terms of efficiency and quality.

The achievement of the objective of introducing new financial mechanisms for the health sector. Atthe outcome level, the stated DO was partially achieved as there was an increase in the population

covered by health insurance, mainly for the independent workers, from 15% to about 25%. The healthinsurance scheme covering the poor (RAMED) was not implemented at the time of project closing,which impacted the ability of hospitals to better manage costs and the provision of services.

The Government passed the Law 65/00 in 2002, which established the mandatory health insurance(AMO) program and the program for the poor (RAMED) as well as the national health insuranceregulatory agency (ANAM). This was followed by a series of by-laws and decrees in 2005 and 2006to operationalize the ANAM and actually implement the first part of the AMO for independentworkers.

The project outputs in terms of TA and studies contributed to the critical thinking and reflections aswell as the strategic considerations related to the implementation of the health insurance reform thatstarted with an analysis of the draft law (Bitrn Associates, 2002) and ended with the series of 7

reports on establishing the ANAM (Soucy et Partenaires, 2006). In addition, the EC continues towork with the government and specifically the MOH on proceeding with health insurance issues.

The achievement of the objective of Strengthening the MOHs policy formulation and sector

management capacities. The achievement of this objective was extremely difficult to assess as theindicators identified at project appraisal were not systematically collected. More importantly, theindicators were inadequate to monitor strengthened policy and decision making capacity. Despitethe inputs from the TA financed under the project, the products were only available late in projectimplementation and recommendations were not validated in time to have any clear impact. On theother hand, the government took modest steps toward regionalization, primarily through the EC-funded project (PAGSS), with the establishment of the first health region in August 2005. Subsequentregionalization is underway, albeit slowly, with other donors involved in the sector. It was noted thattwo more health regionswere created in late 2006.

3.3 Efficiency

The project aimed at improving health system efficiency by gradually increasing allocations to costeffective interventions, upgrading the human capital base and improving labor productivity as a resultof raising the health status of the population through expanding health insurance coverage.

It is worth noting that more than 90% of the project costs were to finance hospital investments, whichwere completed only by the project closing date, and the full range of the health services affected bythe physical infrastructure improvement was not offered. It was therefore not practical to conduct anyefficiency analysis to assess whether the costs involved in achieving project objectives werereasonable in comparison with both the benefits and with recognized norms particularly in the absence

of hospital utilization data. It is therefore recommended to conduct such analyses in two years (as partof the post completion evaluation) when the full range of improved services would be provided andutilization data would be available.

3.4 Justification of Overall Outcome Rating

The overall outcome rating is Moderately Unsatisfactory. By the project closing date, at the outcomelevel, most of the staff of the five project hospitals were satisfied with the upgraded facilities andequipment. The PEH was introduced in all 14 hospitals, and budget management based on results was


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introduced. On the other hand, there was little data to assess improved quality or increased efficiency(except for the qualitative data collected at the hospital level). At the output level, most of themanagement tools were developed and introduced in the five hospitals but were implementedunequally. Also, the utilization indicators had significantly dropped due to the fact that most hospitalswere still under construction up to project closing. The project objectives, however, remain relevantand a post completion assessment of the project impact in two years may provide positive results,

given the improved physical infrastructure, increased hospital capacity, and the ongoing expansion ofhealth insurance coverage.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development. The project was expected to havea significant impact on improving social equity through better allocation and targeting of public healthresources, thus increasing access of the poor to health care. Beneficiary assessments were planned tobe carried out in order to assess the social impact of project activities but were not conducted.Nevertheless, it is expected that many of the poor population will benefit from improved hospitalservices, particularly when the health insurance coverage for the poor (RAMED) is implemented. Apost completion assessment in two years would therefore be critical to assess the project social impact.

(b) Institutional Change/Strengthening. The project had a positive impact on institutionaldevelopment, particularly at the central level, in understanding and managing complex reforms relatedto public hospitals and health sector financing: preparation of hospital development plans which aremandated for all hospitals (including the recent passage of the law on Hospital Reform); theintroduction of modern hospital management tools; the creation of the UMER to coordinate andmanage complex hospital development projects, which will continue with the EIB funded project; andthe creation of the communication units in the project hospitals, which strengthened the outreachactivities and bridged the gap between hospital management, hospital staff and the community.Similarly, in health financing, the project TA contributed to the development of the organizationalstructure of the ANAM and in strengthening its capacity as well as supporting the MOH/DRSF inconducting complex studies, e.g., the actuarial studies.

(c) Other Unintended Outcomes and Impacts (positive or negative). A positive unintendedoutcome of the project was the development of new health insurance schemes to cover theprofessional and independent workers (e.g., Inaya) under the mandatory health insurance program. Inaddition, the reform process engaged national stakeholders to openly debate the future of hospitalreforms.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

N/A

4. Assessment of Risk to Development Outcome

The risk to development outcome is Moderate. This is explained by the fact that the project

outcomes, although limited, are subject to political economy forces that are outside the programsphere of influence, particularly for health insurance coverage and regionalization. On the other hand,the hospital management tools developed by the project are likely to be institutionalized by the newHospital Reform Law, provided this is coupled with the mobilization of significant human andfinancial resources, particularly for operation and maintenance for the large hospital investments madeunder the project.


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development outcomes and the inter-linkages between the project components. More seriously, theBank failed in proactively taking action and missed several opportunities, e.g., during the mid-termreview and restructuring, to change the project course in order to achieve more realistic objectives.

5.2 Borrower Performance(a) Government Performance

The Government performance is rated Moderately Satisfactory. Despite several setbacks (bothpolitical and institutional), the Government, particularly the MOF and the MOH (as the entityresponsible for health policy and implementing agency for the project ), stood by its reform program.However, it underestimated the time and institutional capacity needed to introduce major changes inhospital, regional and central management, including financing of the reform. The regionalization lawwas issued in 1997 and the health insurance law was drafted in 2000. But it took almost 3 yearsbetween the ratification of the health insurance law in 2002 and issuing its by-laws in 2005 as well asthe operationalization of the ANAM. In addition, some efforts were made to address the fundamentalissue of human resources which has impeded the effectiveness of the health sector; however, morerigorous interventions are needed. In general, the enabling environment was lacking due to weakpolicy and institutional frameworks. All these efforts require long term commitments, and thegovernment continues to push ahead on the reform program and has partnered with the EIB inupgrading additional hospitals and the dissemination of the management tools introduced under theproject. A very recent and positive aspect is the issuance of the decree on Hospital Reform whichstipulates the requirement for a PEH in all national hospitals as well as other important aspects thatwill further enhance the hospital reform process. The one aspect that is still not resolved is the healthinsurance scheme for the poor (RAMED) which is needed to reduce poverty and inequity.

(b) Implementing Agency or Agencies PerformanceThe performance of the implementing agencies is rated Moderately Unsatisfactory. The keyimplementing agency of the project was the MOH, including the different departments responsible forthe three components and the project-created units (USP and UMER). Despite the commitment of theMOH departments and project units to the reform process, implementation readiness was weak, andefforts fragmented. There was lack of coordination between the three project components, whichrequired a higher convening MOH authority to support the USP. While there was some consultation

with local authorities regarding hospital reform interventions, there was little consultation with thebroader stakeholders and the public until much later in project implementation. Also, it took a longtime to resolve implementation issues, particularly with regard to the management of the hospital civilworks. On the other hand, the management of the fiduciary aspects was adequate and projectcovenants were realized but with delays. The performance, however, improved in the last year of theproject, particularly with regard to the UMER, as the learning curve increased.

(c) Justification of Rating for Overall Borrower PerformanceThe overall performance of the Borrower is rated Moderately Unsatisfactory. The proposed reformsand project interventions constituted uncharted waters for the Government and MOH personnel. Thelearning curve was steep, and momentum was slow, particularly due to the lack of skilled humanresources and the lack of effective coordination between the different departments of the MOH,despite the governments commitment. In addition, two years were lost (2000 and 2001) due to

government inaction in launching project activities.

6. Lessons Learned

The project provides good lessons for similar future operations, which are summarized below.

Health sector reform is complex and long-term in nature. It is becoming increasingly recognizedthat the objectives of the health sector reforms envisaged in the mid 90s were overly ambitiousand could not possibly be achieved in the life of a five-year project. A more incrementalapproach with a clear roadmap and benchmarks may be more practical.


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Government commitment is necessary but not sufficient for engaging in a health sector reformprogram. Despite Government commitment, it took a long period for actions to materializebecause of weak institutional capacity to carry out the reforms, which was coupled with an acuteshortage of adequately qualified personnel. This should have required an in-depth institutionalanalysis and an organizational development plan to accompany the reform.

The institutional arrangements are critical in the success of complex projects. The coordination ofthe project components and activities was a key challenge. The cooperation between the differentMOH departments, the regions and project units was suboptimal. The institutional arrangement ingeneral led to project fragmentation. The office of a higher convening authority would have beenmore effective in ensuring this level of coordination.

Investment lending may not be the best instrument for inducing major sector reforms. Using aninvestment lending instrument for a project with both huge physical investments as well asambitious reforms would inadvertently lead the implementers to focus on the physicalinvestments. Other approaches and instruments such as a Development Policy Lending, incombination with technical assistance lending, could be more appropriate.

Hospital construction and/or rehabilitation is very complex and takes a long time. Experiencefrom this and other similar projects has demonstrated that hospitals are complex constructionprojects, particularly when they are rehabilitated, as services continue to be provided while civilworks are going on, which usually slows the pace of implementation. For hospital rehabilitation,it is judicious to have the architectural drawings ready before project effectiveness.

Project readiness is a good predictor of successful project implementation. The weak projectreadiness in terms of lack of a good M&E system, relevant performance indicators with baselinevalues, procurement packages, and operations manual should have signaled major readinessissues. Given the Bank focus on results, the test for a potentially successful project would be tohave performance indicators with measurable baseline values at appraisal.

Proactive interventions are critical in correcting the course of the project. The mid-term reviewand project restructuring were missed opportunities and could have been used more effectively inchanging the course of the project by intervening earlier and more strategically to revise the PDOsand the implementation scope of the project.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

The MOH has commissioned its own external evaluation of the project achievements and impact, andthis evaluation report is expected to be completed in the fall of 2007. In the meantime, theGovernment submitted its initial comments on the French version of the ICR, which are attached asAnnex 7. While noting the importance of the ICR, the Government indicated that it would bepremature to evaluate the outcomes of the project at this time, and emphasized the need to undertakefurther in-depth examination of the project by the different central and regional MOH departments.The Government therefore requested to postpone their submission of more comprehensive commentson the project achievements until the external evaluation is completed.

(b) Cofinanciers N/A

(c) Other partners and stakeholdersThe European Investment Bank is supporting the hospital reform program with a new project that isstarting in 2007 and targeting 17 hospitals.

The EIB indicated that all the three original components of the WB financed project (PFGSS) werehighly relevant to the country and sector. Although Component I had the most direct bearing on theEIB's project, the other two components clearly had a wider beneficial effect, as well as providingimportant support to Component I.


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Some of the key hospital management tools developed under the PFGSS included: (i) the HospitalDevelopment Plan (PEH), (ii) the financial management accounting model, (iii) the costing and billing,(iv) the management and technical hospital reorganization, (v) the planning and management ofhuman resources (GRH), (vi) the quality and clinical audit, and (vii) the routine maintenanceprograms. The EIB assessment is that the first five tools have been developed and implemented in

one of the five project hospitals, some of them were implemented in more than one, and all five wereimplemented in Agadir. Moreover, the quality aspects were somewhat less developed. Finally, therewill be a need for further work to integrate all these tools and scale them up to other hospitals.

Given the availability of these tools, the EIB is planning to provide TA to support the scaling up ofthese seven tools in all or a subset of the 17 hospitals in the EIB project in parallel with the physicalimprovement.


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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

ComponentsAppraisal Estimate

(USD millions)

Actual/Latest

Estimate (USD

millions)

Percentage of

Appraisal

STRENGHTENING HOSPITALMANAGEMENT ANDIMPROVING QUALITY OFSERVICES

61.30 35.58 94.8

IMPROVING HEALTH SECTORFINANCING

1.87 2.20 2.8

STRENGTHENING POLICY

AND DECISION-MAKINGCAPACITIES 1.54 1.80 2.4

Total Baseline Cost 64.71 39.58

Physical Contingencies3.64 0.00 0.00

Price Contingencies7.75 0.00 0.00

Total Project Costs 76.10 39.58

Project Preparation Fund 0.00 0.00 .00Front-end fee IBRD 0.61 0.00 .00

Total Financing Required 76.71 39.58

(b) Financing

Source of FundsType of

Cofinancing

Appraisal

Estimate

(USD

millions)

Actual/Latest

Estimate

(USD

millions)

Percentage of

Appraisal

Borrower 0.00 0.00 .00

International Bank for Reconstructionand Development

66.00 39.58 .00


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Annex 2. Outputs by Component

Component I: Hospital Reform

Output type Output indicators

Values at

end of

project

Comments

Development andimplementation of amanagement informationsystem (SIGHO) [percentage implemented]

100% This percentage was reported by the MOH on the basisthat the MIS was planned in only one hospital. The MISwas developed and implemented in the pole ofexcellence at Hospital Hassan II in Agadir.

Number of hospitalswhere a PEH has been set-up and validated

14 The PEH was developed and actually implemented inthe five project hospitals and developed for theremaining 9 hospitals. This was the basic managementtool to be introduced in the target 14 hospitals.

Number of hospitals withhuman resourcesmanagement units

5 The new organizational structure of the project hospitalsincluded newly developed human resources units. Thestaffing and activities of these units varied acrosshospitals.

Management tools

introduced in the

project hospitals

Number of hospitals with

an accounting andfinancial managementsystem

5 The new accounting and financial management system

was introduced in the five project hospitals. However,the actual implementation and use varied acrosshospitals.

Introduction of

maintenance plans

in project hospitals

Percentage of hospitalbudgets allocated tomaintenance

6.71% The ICR team found it difficult to comment on thisindicator as there was neither a baseline nor a targetvalue.

Percentage increase inpatients in the five projecthospitals

-55.05% Project hospitals were under construction and thereforeservices and levels of utilization were significantlyreduced.

Average occupancy rate 57.69% Baseline was 59% and the target value was 70%. Theindicator showed no improvement as the projecthospitals were under construction and therefore servicesand levels of utilization were significantly reduced.

Percentage increase innumber of imaging examsin the project hospitals


Improvement of

utilization rates of

the project

hospitals

Percentage increase in thenumber of lab tests in theproject hospitals


Safi (first phase): surgeryrooms, centralsterilization, kitchen andadministration.

Completed100%.

Safi (second phase):radiology, intensive care,ER, external work

Completed100%

The two phases were fully executed except for thebiology and the intensive care units, which were notoperational by project closing date. The incinerator wasoperational. The total cost of investments in Safi wasabout US$ 10.6 million. The impact of hospitalimprovements on service utilization or quality was notpossible to assess.

Agadir (first phase):

surgery rooms, centralsterilization, ambulatorysurgery clinic, radiology.

Completed

100%.

Agadir (second phase):ER, intensive care,pediatric clinic

Completed100%

The two phases were fully executed by project closing

date at a total cost of about US$ 11.5 million. Mostservices started to operate right before closing except forthe operations/surgery rooms and the central sterilizationunit, which were not operational. The incinerator wasfully operational. Improved services started in late2006, which did not permit an assessment of projectimpact on utilization and quality of services.

Physical

rehabilitation and

provision of

equipment in

project hospitals

Meknes (first phase):radiology, surgery,sterilization, intensivecare.

Completed100%.

The two phases were fully executed almost by projectclosing date at a total cost of about $13.1 million,however not all services and equipment were fullyoperational such as the intensive care unit and biology


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Meknes (second phase):labs, ER, burnt unit,administrative unit,external work

Completed100%

laboratory. The impact on improved service utilizationwas not therefore possible to assess.

Beni Mellal (first phase):logistics unit, centralpharmacy, hemodialysis,

radiology.

Completed100%.

Beni Mellal (secondphase): ambulatorymedicine& surgery,intensive care, ER,maternity, medicalarchives, administrativeunit.

Completed100%

The two phases were fully executed at a total cost ofabout $9.4 million, and almost all services started tobecome fully functional by project closing date. The

impact on improved service utilization was not thereforepossible to assess.

Settat (first phase):surgery, sterilization, andradiology.

Completed100%.

Settat (second phase):radiology, intensive care,ER, biology laboratories,

external work

Completed100%

The two phases were fully executed at a total cost ofabout $9.4 million and all units were operational butbarely by project closing date. The impact on utilizationwas not therefore possible to assess.

Component II: Health Sector Financing

Output indicators were not monitored. However, the following outputs were noted by the ICRpreparation team:

A Framework Law on mandatory health insurance scheme (Assurance maladie obligatoireAMO) ratified in August 2002 (Loi-Cadre 65-00).

Nine Government Decrees related to the establishment of the AMO were published in August2005. These nine decrees covered a wide range of areas, including the reimbursementmodalities and the medical control, contributions to the CNSS (Caisse nationale de scuritsociale) and the CNOPS (Caisse nationale des organismes de prvoyance sociale), the

medical coverage rates for health services under the CNSS and the CNOPS, eligibility criteriafor the AMO, categories of affiliation daily workers covered under the AMO, the financialorganization of the AMO, and the contributions to the CNSS for family coverage.

The TA financed by the project contributed to a series of technical studies (7 in total), whichbenefited the ANAM.

A number of studies were prepared for the RAMED, including an actuarial study that coveredimportant elements concerning the definition of the eligible population and its size, the cost ofcoverage, and financing mechanisms.

Component III: Health Sector Capacity

Output indicators were not monitored. However, the following outputs were noted by the ICR

preparation team:

A study on the Organizational and Technical Audit of the MOH was completed in 2005. A study on a comprehensive Human Resources Strategy for the MOH was completed in

2006.

A Ministerial Circular No. 3 was issued in August 2005, in order to create a new regionalhealth structure in the pilot area of the Oriental.


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Annex 3. Economic and Financial Analysis

(including assumptions in the analysis)

The project aimed at improving the health system efficiency by gradually increasing allocations tocost effective interventions, upgrading the human capital base and improving labor productivity as aresult of raising the health status of the population through expanding health insurance coverage.

It is worth noting that more than 90% of the project costs were to finance hospital investments, whichwere completed only by project closing date, and the full range of health services affected by thephysical infrastructure improvement was not offered. It was not therefore practical to conduct aneconomic or financial analysis to assess whether the costs involved in achieving project objectiveswere reasonable in comparison with both the benefits and with recognized norms particularly in theabsence of hospital utilization data. It is therefore recommended to conduct an economic andfinancial analyses in two years (as part of the post completion evaluation) when the full range ofimproved services would be provided and utilization data available.


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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title UnitResponsibility/

Specialty

Lending

Ferid Belhaj Manager MNCMA Team member

Sherif ArifRegional Environmental and

Safeguards AdvisorMNACS Team member

Rafika Chaouali Financial Mgt. Spec. OPCFM Team member

Claudine Kader Senior Program Assistant MNSHD Team member

Maryse Pierre-Louis Health Lead Specialist AFTHD Task Manager

Daniel Kress Health Economist MNSHD Task Manager

Christian Rey Adviser, Quality and co-finance

EACIF Team member

Supervision/ICR

Meryem Benchemsi Consultant MNCMA Team member

Mbaye Mbengue Faye Consultant AFTU2 Team member

Jean-Jacques Frre Task Manager MNSHD Project Leader

Claudine Kader Senior Program Assistant MNSHD Team member

Monique Kamphuis Consultant MNSHD Team member

Daniel Mercier Consultant MNSHD Team member

Axel Rahola Economist (Health) HDNHE Team member

Eileen Brainne Sullivan Operations Analyst MNSHD Team memberEric Andre Tkint deRoodenbeke

Sr. Health Specialist. AFTH2 Team member

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only)

Stage of Project CycleNo. of staff weeks

USD Thousands (including

travel and consultant costs)

Lending

FY93 1.29

FY94 72.00

FY95 32.76

FY96 18.32

FY97 128.80

FY98 201.53

FY99 42.38

FY00 0.69

FY01 0.00

FY02 0.00


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FY03 0.00

FY04 0.00

FY05 0.00

FY06 0.00

FY07 0.00

Total: 497.77

Supervision/ICR

FY93 0.00

FY94 0.00

FY95 0.00

FY96 0.00

FY97 1.80

FY98 0.00

FY99 68.93

FY00 23 103.13

FY01 13 67.90

FY02 5 52.41

FY03 11 72.38

FY04 18 98.54

FY05 25 177.40

FY06 16 106.78

FY07 12 83.76

Total: 123 833.03


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Annex 5. Beneficiary Survey Results

There was a beneficiary/client satisfaction survey planned but it was not conducted. However, asurvey on personnel satisfaction was conducted towards the end of the project (October 2006). Asummary of the key findings is presented below.

Even though the selected survey themes were relevant, the survey structure and methodology were notrobust enough to support the survey findings. For example, some of the questions, such as the staffperception of the quality of services, were irrelevant since most of the upgraded services were notoperational as the civil works and the full installation of the new medical equipment were notcompleted in the project hospitals in October 2006. Nevertheless, the most significant results of thesurvey were the high satisfaction among all categories of hospital professionals with the acquisition ofnew equipment and material as well as improved working conditions (67.3% satisfied or highlysatisfied). Also, the new work dynamics (participative approach) induced by the project were wellperceived (56% satisfied or highly satisfied). Moreover, all categories of personnel, except for thephysicians, were aware of the projects objectives and activities. Forty percent of the physiciansreported that they were not well informed about the projects objectives and activities in their hospitals.On the other hand, the majority (56%) of the personnel were not satisfied with the transfer of skillsand competencies in management and planning as well as the new hospital organigram and createdcommittees. Physicians were the least satisfied with the project interventions (except for theacquisition of new equipment).


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Annex 6. Stakeholder Workshop Report and Results

(if any)


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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR


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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

N/A


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Annex 9. List of Supporting Documents

World Bank: ISRs of the Project World Bank: Back to office reports Supervision missions Plan de lenvironnement au Maroc: Plan de gestion des dchets hospitaliers BAJ Health Project : Implementation Completion Report Procurement Post Review Report Suivi du Ple D - Gestion des ressources humaines A review of the law proposing health insurance reform in Morocco Examen de la proposition de loi sur la rforme de la sant au maroc Accompagnement de la mise en place de lAgence Nationale de lAssurance Maladie

(Rapport dtape no. 1) Version dfinitive

Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie

Estimation budgtaire

Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie Rapports nos 5 et 6

Appui au Ministre de la Sant dans la mise en place de certaines mesuresdaccompagnement de la couverture mdicale de base

Appui au Ministre de la Sant dans la mise en place de certaines mesuresdaccompagnement de la couverture mdicale de base - Etats des lieux

Appui au Ministre de la Sant dans la mise en place de certaines mesuresdaccompagnement de la couverture mdicale de base - Proposition de critres pourlallocation des ressources budgtaires du Ministre de la Sante au niveau infra rgionaldans lobjectif de rduire les ingalits de sant

Appui au Ministre de la Sant dans la mise en place de certaines mesuresdaccompagnement de la couverture mdicale de base - Evaluation de limpact Rapport CREDES Health Insurance Expansion in Morocco


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Annex 10: Status of Introduction of Hospital Management Tools and Hospital Development

as of Project Closing

The implementation of this component proceeded broadly on two pillars: physical improvement ofhospital infrastructure through investment in building and medical equipment and development andintroduction of modern management tools.

The project aimed at developing and introducing a number of management tools including a HospitalDevelopment Plan (Plan dEtablissement de lHpital, PEH), hospital information system (SystmedInformation et Gestion Hospitalier, SIG-HO), quality improvement (QI), cost analysis, humanresources, financial and accounting management system (FAMS), and organizational developmentand support. By project closing, the PEH was developed for the 14 project hospitals and many of theplanned management tools were developed and introduced in the five hospitals but have not beenuniformly and optimally implemented. By project closing, the status of introducing theManagement Tools was as follows:

Hospital Development Plan ( Plan dEtablissement de lHpital, PEH). All the 14 projecthospitals have developed their first PEH for the 2001-2006 period and the core five hospitals hadfully implemented them. However, the preparation of the second PER for the 2007-2011periodwas not initiated, which raises questions regarding the institutionalization and sustainability ofthis tool.

Hospital Information System (Systme dInformation et Gesion Hospitalier, SIG-HO). Thiswas the least developed system as four of the five hospitals did not implement nor fullyoperationalize the complete SIG-HO by the project closing date. While all the equipment wasinstalled and most of the wiring and cabling was done in most offices and some services, theactual networking and internet connections were only functional in Agadir. At Mekns, the SIG-HO was partially connected to the radiology unit, the emergency room and the intensive care unit.

Quality Improvement (QI). Overall, the QI was implemented in the five hospitals with formallydedicated teams. Some QI initiatives have been developed such as prevention and control of

nosocomial infections, which was at an early stage of implementation. Nevertheless, thedeveloped methods and tools were under-utilized as they were not adequately disseminated (nocommunication support in place e.g. posters). A key challenge for QI was the lack of resources(staff and patient education, communication, etc) to make it a clear priority in the hospital.

Cost Analysis. In all five hospitals, the initial objective was developing tools to estimate andanalyze the unit cost of health services and developing a pricing and billing system on that basis,which has been reduced to a more realistic and simple cost collection tools. These costcollection tools were functional in all sites but the results were mostly utilized at the central level.A key reason for the difficulty to move to full unit cost-based management was the lack ofadequately trained personnel with competencies in cost analysis. Most staff assigned to datacollection on costs were nurses and medical aides who did not have the financial background andbenefited from limited training.

Human Resources (HR). All modules and tools of HR management were developed butpartially implemented. Tools such as HR information system, job description, work and leaveschedule, and reward system have been implemented in all hospitals. However, the actual use ofthe tools is suboptimal as it remains descriptive and not analytical. For example, the estimation ofpersonnel workload and productivity analysis were still not implemented in the project hospitals,except for Beni-Mellal where all the HR tools have been successfully implemented andproactively used.


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Financial and Accounting Management System (FAMS). This system had only been partiallyimplemented as four of the five hospitals have installed three out of the nine FAMS tools. Aftermuch delay, the Agadir hospital has launched the professional software (progiciel) in late 2006and has now fully developed the billing system as well as the complete nine tools needed for costanalysis. That delay was due to the difficulty in extending the procurement contract for theinstallation of the software and adapting it to the local context as well as the lack of adequately

trained personnel. The Progiciel is yet to be procured and installed in the other hospitals and thedesignated personnel adequately trained.

Organizational Development and Support. The objective of this pillar was to support thehospital management team in adopting and implementing the reforms for both administrative andmedical functions. Most of the new administrative functions were implemented in the fivehospitals with a new organigram that entailed the establishing of the management teams, theconsultative committees, the communication unit, and the admission and billing unit (BAF). Thecommunication unit in the five hospitals has proven to be very active in reaching out to differentstakeholders particularly in informing hospital staff and patients about the ongoing reforms but itsactions still remain confined to describing the hospital physical improvements. However, some ofthese functions were not fully computerized, particularly the BAF (computers exist but not used)because of lack of adequately trained personnel. On the other hand, the new medical functions

remain a challenge. For example, the creation of new departments (departmentalization) formedicine, surgery, mother and child, etc.is being met with resistance. For example, in Meknes,the management team is still discussing the status and functions of a department before actuallycreate them. (Only the internal medicine department was established in the five hospitals).Similarly, the medical record has neither been unified nor fully used because of lack ofcommunication/training of the medical staff. The resistance of the medical corps to change wasthe key factor in the lack of progress in implementing the new medical functions and tools such asthe unified medical record, which severely limits any progress in the quality of health care and inthe implementation of the universal medical insurance scheme. Two factors seem predominantlyresponsible of the failure in mainstreaming the medical record. First, the physicians have notbeen involved enough and/or trained and lack knowledge about the reform objectives and theirroles and administrative responsibilities. Second, there was no incentive scheme in place(leverage/control/sanctions) for the physicians that encouraged them to adopt the unified medicalrecord. Resistance to change was not adequately considered in project design particularlyresistance from the medical corps.

Hospital investment in buildings and medical equipment was completed by the project closing date.Almost all major civil works were completed by December 2006 and some minor works werecompleted afterwards through Government financing. The quality of civil works was good andresulted in an extended hospital capacity and improved physical infrastructure. By project closing, allthe planned medical equipment had been supplied but not all of them were installed and in service(such as the Operation Room in Settat). The status of project hospitals was as follows:

Settat (Hassan II) Hospital. The hospital development plan (PEH) had two phases that includedthe rehabilitation and equipping of central sterilization, surgery, radiology, emergency room,

intensive care, hemodialysis, biology laboratories, medical archives, and external works. This hasbeen fully executed at a total cost of about $9.4 million and all units were operational but barelyby project closing date; the impact on utilization was not therefore possible to assess. In terms ofhospital management systems and tools, the first Hospital Development Plan (PlandEtablissement de lHpital- PEH) for the period 2002-2006 has been developed and fullyexecuted but it does not seem to be sustainable as no second plan was developed for the period(2007-2011). The Hospital Information System (SIG-HO) was not operational even though theequipment and cabling was mostly installed. The professional software (progiciel) has not yetbeen implemented. As for the Quality Improvement (QI) pillar, it was still at an initial


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implementation stage. Also, the cost collection tools were functional but mostly utilized at thecentral level. Moreover, all modules and tools of Human Resources (HR) management were inplace but their actual use was suboptimal. The Financial and Accounting Management System(FAMS) has not progressed well despite the fact that Settats hospital was the pilot site for thispillar; only three out of nine modules have been developed and implemented. Finally, the newadministrative reorganization was operational but many of the newly created departments were

short in staff. Meknes (Mohamed V) Hospital. The hospital development plan (PEH) had two phases that

included the rehabilitation and equipping of the radiology unit, surgery rooms/theatre, centralsterilization, intensive care, biology

Morocco - Health Financing and Management Project_Implementation Completion Report (2007)

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