Document of The World Bank FOR OFFICIAL USE ONLY Report No: 38854-BR PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$83.45 MILLION TO THE FEDERATIVE REPUBLIC OF BRAZIL FOR THE FAMILY HEALTH EXTENSION PROJECT IN SUPPORT OF THE SECOND PHASE OF THE FAMILY HEALTH'EXTENSIONPROGRAM March 28, 2008 Human Development Sector Management Unit Brazil Country Management Unit Latin America and the Caribbean Region 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. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document o f The World Bank
FOR OFFICIAL USE ONLY
Report No: 38854-BR
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$83.45 MILLION
TO THE
FEDERATIVE REPUBLIC OF BRAZIL
FOR THE
FAMILY HEALTH EXTENSION PROJECT
IN SUPPORT OF THE SECOND PHASE OF THE
FAMILY HEALTH'EXTENSION PROGRAM
March 28, 2008
Human Development Sector Management Unit Brazil Country Management Unit Latin America and the Caribbean Region
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
AAA AB AIDS AMQ ANVISA
APL ARI BCG BOD CAS CGU CHW CIB CIT CLT CNPQ
CNS CONAMA CONASEMS CONASS CORE CPAR DAB DALY DATASUS
DENASUS
DF DPT DSEI EA EF FGV FH FMR
(Exchange Rate Effective March 25,2008) Currency Unit = Real (R$)
R$ 1.00 = US$0.5770 US$l.OO = R$ 1.73
FISCAL YEAR July 1 - June 30
ABBREVIATIONS AND ACRONYMS
Analytical and Advisory Activities Basic Health Care Acquired Immune Deficiency Syndrome Avaliaqiso para a Melhoria da Qualidade (Appraisal Quality Improvement) Aggncia Nacional de Vigildncia Sanitdria (National Agency for Disease Surveillance) Adaptable Program Lending Acute Respiratory Infections Bacilo de Calmette-Gue'rin (Tuberculosis) Burden o f Disease Country Assistance Strategy Controladoria-Geral da Uniiso (Federal Controller General) Community Health Workers Bi-Partite Health Management Commission Tri-Partite Health Management Commission Consolidaqlio das Leis do Trabalho (Consolidation o f Labor Legislation) Conselho Nacional de Desenvolvimento CientiJco e Tecnoldgico (National Council o f Scientific and Technological Development) National Health Council Conselho Nacional do Meio Ambiente (National Environmental Council) Council for Municipal Health Secretaries Board o f State Health Secretariats Regional Units Country Procurement Assessment Report Department o f Basic Health Care Disability Adjusted L i f e Year Departamento de Informdtica do SUS (Information Technology Department o f the SUS) Departamento Nacional de Auditoria do SUS (National Department o f Auditorship o f the SUS) District Federal Diphtheria, Pertussis (Whooping Cough) and Tetanus Special Indigenous Sanitary Districts Environmental Assessment Environmental Framework Fundaqiso Getzilio Vargas (Getdlio Vargas Foundation) Family Health Financial Monitoring Reports
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FOR OFFICIAL USE ONLY
FNS FUNASA GDP HD HIV HNP IBGE
IBRD ICB IDA IFC IFR IMR IRR I S D S IT ITC M&E M C H MDGs M I C M O H N C B N C D NGO NIP NOAS NOB NPV OECD OPAS PAB PACS
PAISM PCN PHC PID PNAD
POA PPI PROESF 1 PROESF 2 PSF PSRL QCBS RBMS REFORSUS RSB S
Fundo Nacional de Satide (National Health Fund) FundaqGo Nacional de Satide (National Health Foundation) Gross Domestic Product Human Development Human Immunodeficiency Virus Health, Nutrition and Population Instituto Brasileiro de Geograja e Estatistica (Brazilian Institute o f Geography and Statistics) International Bank for Reconstruction and Development International Competitive Bidding International Development Association International Finance Corporation Interim Financial Report Infant Mortality Rate Internal Rate o f Return Information Safeguard Data Sheet Information Technology Information Technology and Communication Monitoring and Evaluation Maternal-Child Health Millennium Development Goals Middle-Income Country Ministry o f Health National Competitive Bidding Non Communicable Disease Non-Governmental Organization National Immunization Program Norma Operacional de AtenqGo Ir Sazide (Operational Health Service Norm) Norma Operacional Bdsica (Basic Operational Norm) N e t Present Value Organization for Economic Co-operation and Development OrganizaqGo Pan-Americana da Satide (Pan-American Health Organization) Piso de Atenqco Bdsica (Basic Health “Spending Floor”) Programa de Agentes Cornunitdrios da Satide (Communitarian Agents of the Health Program) Program o f Integral Assistance to Women’s Health Project Concept Note Primary Health Care Project Information Document Pesquisa Nacionalpor Amostras de Domicilios (National Research for Households Samples) Annual Operative Plan ProgramaqGo Pactuada e Integrada (Pilot Program for Investments) Family Health Extension Project, APL Phase 1 Family Health Extension Project, APL Phase 2 Family Health Program Programmatic Sector Reform Loan Quality and Cost-Based Selection Results-Based Management System Projeto de Reforqo b ReorganizaqGo do SUS (Health Sector Reform Project) Results-Based Management System
has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.
SAS SBD SEAIN SFC SGP SGTES SIAB SIAFI
SOEs STI S T N sus S WAp TA TOR UFMG UG UNDP UNICEF VIGISUS WHO
Secretariat o f Health Services Standard Bidding Documents Secretariat for International Affairs (Ministry o f Planning) National Controlling Secretariat Sistema de Gerenciamento do Projeto (Project Management System) Secretariat o f Management o f Work and Education in Health Basic Care Information System Sistema Integrado de AdministraqZo Financeira (Integrated System o f Financial Administration) Statement o f Expenses Sexually Transmitted Infection Secretaria do Tesouro Nacional (National Treasury Secretariat) Unified Health System Sector-Wide Approach Technical Assistance Terms o f Reference Universidade Federal de Minas Gerais (Minas Gerais University) Unidade Gestora (Managing Unit) United Nations Development Programme United Nations for Children’s Fund Disease Surveillance and Control Project World Health Organization
Vice President: Pamela Cox Country Director: John Briscoe
Sector Director: Evangeline Javier Sector Manager: Keith Hansen
Sector Leader: Kathy Lindert Task Team Leader: Gerard L a Forgia
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BRAZIL FAMILY HEALTH EXTENSION PROJECT . APL PHASE 2 (PROESF 2)
CONTENTS
Page
STRATEGIC CONTEXT AND RATIONALE .................................................................. 1 A . 1 . 2 . 3 .
Country and sector issues .................................................................................................... 1 Rationale for Bank involvement .......................................................................................... 4
Higher level objectives to which the Project contributes .................................................... 6
PROJECT DESCRIPTION .................................................................................................. 7 Lending instrument, program objectives and phases ........................................................... 7
B . 1 . 2 . 3 . 4 . 5 .
Project development objective and key indicators ............................................................ 10
Lessons learned and reflected in the project design .......................................................... 14
Alternatives considered and reasons for rejection ............................................................. 15
Linking project financing to performance ......................................................................... 16
Monitoring and evaluation o f outcomes/results ................................................................ 20 4 . Sustainability ..................................................................................................................... 20
Critical r isks and possible controversial aspects ............................................................... 22
Loadcredit conditions and covenants ............................................................................... 23
D . APPRAISAL SUMMARY .................................................................................................. 23
FAMILY HEALTH EXTENSION PROJECT - APL PHASE 2 (PROESF 2)
Source
PROJECT APPRAISAL DOCUMENT
Local Foreign Total
LATIN AMERICA AND CARIBBEAN
BORROWER [NTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Total:
LCSHH Date: March 26,2008 Team Leader: Gerard Martin La Forgia Country Director: John Briscoe Sectors: Health (95%); Central government Sector ManagedDirector: Evangeline Javier administration (5%). (SD), Keith E. Hansen (SM) Themes: Population and reproductive health
(P); Access to urban services and housing (P); Health system performance (S); Participation and civic engagement (S); Decentralization
For Loans/Credits/Others: Total Bank financing (US$m.): 83.45 million Proposed terms: Fixed-Spread Loan (FSL) in US dollars; front-end-fee financed out o f the loan proceeds; repayment term i s 30 years with a grace period o f 5 years and with level repayments; and all conversion options in the Loan Agreement, and with cap/collar premium to financed out o f the loan moceeds.
v i
Cumulative
Does the project meet the Regional criteria for readiness for implementation? Project development objective
[XIYes [ ] N o
10.35 I 37.55 I 69.05 I 83.45 0.00 0.00
Consonant with the Program goals, the objectives o f the proposed second phase are as follows: (i) increase access to Family Health-based primary care in large, urban municipalities; (ii) raise the technical quality o f and patient satisfaction with primary care; and (iii) improve the efficiency and effectiveness o f Family Health service providers as well as the broader delivery svstem. Project description
Component 1 - Expansion and Consolidation of Family Health Care in Municipalities. This Component aims at scaling up and strengthening PSF capacity at municipal level. The strategic aim is to raise PSF population coverage from 34 to 37 percent in participating municipalities. Coverage extension activities would continue to focus on large urban areas, which are characterized by poorly integrated, traditional service delivery systems and large numbers o f families living in poverty and confronting severe social risk.
Component 2 - Strengthening State Capacity for Supervision, Monitoring and Technical Support of Family Health Services. Component 2 aims at strengthening state capacity to: (i) support municipalities extend coverage, improve technical quality, and manage service delivery; (ii) improve the supply, quality and stability o f family health teams; and (iii) conduct supervision and monitoring as key functions o f state health secretariats.
Component 3 - Strengthening Federal Oversight of the Family Health Program. This Component aims at strengthening PSF policy and technical support, and oversight capacity at federal level. This component would strengthen the capacity o f the Ministry o f Health to provide support to states and municipalities regarding the implementation o f the Program.
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Which safeguard policies are triggered, if any?
Environmental Assessment
Significant, non-standard conditions, if any, for:
Board presentation: Standard conditions
Loadcredit effectiveness: Standard conditions
Covenants applicable to project implementation:
Disbursement Conditions
Component 1 (Categorv 2): Municipal Results-Based Agreements between MOH and participating municipalities signed and include performance indicators that are linked to financing.
Component 2 (Category 31: State Results-Based Agreements between MOH and participating states signed and include
performance indicators that are linked to financing.
... VI11
A. STRATEGIC CONTEXT AND RATIONALE
1. Country and sector issues
1. Brazil has made significant progress in human development over the last decade, reflecting gains in health status, education attainment and social assistance. Significant challenges remain, however. Although poverty decreased by 11 percent during the last 12 years, a quarter o f the population (about 45 million) s t i l l l ives below the poverty line. Brazil also remains one o f the most unequal countries in the world. Health, education and social services suffer from serious inefficiencies, which increasingly threaten the affordability and sustainability o f these systems. Given budgetary constraints, a case can be made that without improvements in the efficiency and quality o f service delivery, equity gains may remain elusive.
2. Health status has significantly improved in the last 10 years - infant mortality decreased by 47 percent in 14 years (from 47.5 per 1,000 live births in 1990 to 24.1 per 1,000 live births in 2005); mortality rates from vaccine-preventable diseases in children are negligible; and diarrheal diseases are the cause o f less than 4 percent o f al l deaths among children under 5. The number o f new cases o f HIV/AIDs has leveled o f f in part due to an aggressive prevention, promotion and treatment program.
3. Despite these advances, significant system shortcomings persist:
Inequalities: Substantial disparities s t i l l exist in health status, health financing and service utilization among regions, states and municipalities, income groups, and between urban and rural areas. For example, the infant mortality rate in the Northeastern Region (36/1000 births) remains more than double the rate in the Southern Region (15.8/1000 births). Infant mortality varies considerably among municipalities within states. Available data demonstrate that the poor suffer higher rates o f mortality and morbidity from both communicable and non-communicable diseases.
Government i s the predominant payer o f health services in Brazil. Growing demand and new technologies will continue to exert pressure on the public purse. Yet little attention has been paid to cost containment. Brazil’s delivery system remains hospital- and specialty- centered, compromising the affordability and sustainability o f the delivery system. Only about 45 percent o f Brazilians have regular access to more affordable primary health care. Coverage i s lower in large cities, particularly in low-income favelas. There, people often resort to crowded and costly emergency rooms for care. Cities with high primary care coverage show significantly lower utilization rates o f more costly outpatient specialty consultations, often provided in hospitals, than cities with low primary care coverage (Viana et al. 2002). Further, about 30 percent o f hospital admissions, representing 2 1 percent (US$2.8 billion) o f public spending on hospitals (15 percent o f total public spending in 2002) are for care that can more effectively and efficiently be provided at lower levels o f the delivery system. The average cost o f treatment for basic care i s US$374 at a hospital setting, compared to approximately US$17 at ambulatory facilities. Cities with high primary coverage display lower rates o f hospital admissions for children with acute respiratory infections and diarrheal diseases (Sales and Gentile 1998; Carvalho 2005). Finally, publicly-financed
0 InefJiciencies:
facilities suffer from productive inefficiencies resulting in huge cost variations among providers. This results in part f rom insufficient use o f practice guidelines and clinical protocols (World Bank 2004).
Quality and Effectiveness Problems: Non-communicable diseases (NCDs) are now the main cause o f death and disease in the country, accounting for 62 percent o f al l deaths, which has a significant impact on health care costs and the economy. A recent study found that continuing with the status quo will add US$34 bi l l ion to the country’s health care bill over the next five years, and also result in economic costs o f US$38 bi l l ion in lost productivity (World Bank 2005). Taken together, the financial and economic costs represent about 10 percent o f GDP in 2003. Status quo refers to under-provision o f health promotion and prevention interventions, the weakness o f referral systems, lack o f dissemination and use o f cost-effective treatments, and the absence o f functional networks to facilitate the application o f case management protocols across al l levels o f care. Quality o f health care is generally unknown or low, particularly in facilities serving poor populations (World Bank, forthcoming).
0
4. During the last 15 years, Brazi l has implemented major health reforms - the Reforma Sanitdria - that have transformed the organization, financing and provision o f health services, and created the Unif ied Health System (SUS). This process has been mostly successful in terms o f transferring responsibility to the sub-national level. A praiseworthy achievement o f decentralization i s the financial buy-in from states and municipalities. However, l o w managerial capacity, especially at the municipal level, and lack o f performance orientation compromise the ability to make further gains. Deficiencies in planning, budgeting, input management, and information management contribute to shortcomings in service provision. Accountability i s diffuse between providers and public payers, between municipal managers and federal financiers, and between both managers and providers and the populations they serve. Setting performance benchmarks regarding efficiency, effectiveness and quality, providing financial incentives to achieve them, and monitoring and evaluating results are key next steps in the reform process.
5. Government Strategy: The Family Health Program: The pyramid model o f acute healthcare organization, in which primary care i s in a subordinate role to higher level care, has tended to diminish the significance o f basic care services in Brazil (Vilaqa, 2003). As a result, the volume and quality o f care provided at the primary care level, the most important level in terms o f resolving patient demand, has until recently received relatively l i t t l e priority.’ As the burden o f NCDs becomes greater and the need for greater interaction between different levels and components o f the health system increases, the pyramid structure becomes less effective because what i s required i s care that i s coordinated horizontally rather than hierarchically, with the primary health care facility acting as the central node from which other health facilities are referred. However, without a functional primary care system, such coordination i s impossible to achieve.
6. The Family Health Program (PSF) has been the MOH’s flagship program and main strategy for extending primary care, defining health priorities, and ultimately, improving health
This i s slowly changing with the onset o f the Family Health Program. But there has been considerable variation in 1
its implementation across municipalities.
2
outcomes. Between 2002 and 2005, population coverage increased from 32 to 45 percent. Fifty percent coverage has been achieved for municipalities under 100,000 inhabitants, and for nearly al l rural areas. Coverage lags (approximately 30 percent) in the 250 large, urban municipalities where over 90 mil l ion people reside (about 60 percent o f the population). The Government has set a national target o f 50 percent coverage by 2008, having achieved 46 percent in 2006. The PROESF A P L target is 45 percent (for participating municipalities), having reached 34 percent in the first phase (December, 2006).2
PHC Delivery Model: Traditional vs. Family Health Approach I
7. in Brazil. A comparison o f PSF and traditional basic care approaches i s provided in Box 1. PSF approach i s a community-based, outreach-oriented primary health care model, with multi- professional teams delivering primary health care interventions and prevention to households and communities. PSF teams serve as gateways to higher-level services.
PSF represents a decisive departure from the traditional basic care approach s t i l l common
8. Each team is responsible for enrolling a given number o f families (between 600 and 1,000; 3,500 individuals on average) within a defined catchment area, and monitoring their health status, r isks and needs. PSF seeks to implement three essential attributes o f primary health care: f i rst point o f access, continuity o f care, and coordination with the health system. The program focuses primarily on maternal and chi ld health and the prevention and early treatment o f a few NCDs such as hypertension and diabetes (Box 2). The health promotion component o f the PSF provides
Box 2: Core PSF Services
Child health (growth & development, nutrition, immunization, treatment o f prevalent illnesses)
0 Women’s health (pre-natal care, prevention o f cervical cancer, family planning)
0 Health promotion activities Oral health (emphasis on ages 0-14) Prevention of, testing and counseling re. HIV Preventions and treatment o f STIs Control o f tuberculosis
Similar to broader public system, Unified Health System (SUS), PSF i s on paper an “universal” program. However, in practice, and initially at least, implementation i s directed to low-income areas where basic care coverage i s low or non-existent.
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an important opportunity to address the growing challenge o f non-communicable diseases (NCDs) in Brazil. PSF core activities have been identified as cost-effective interventions for improving chi ld and women’s health, and include 6 o f the 10 “best buys” recommended by the World Bank.3 However, the exact scope o f the program varies across municipalities. The teams act as the entry door to the health system, both through outreach activities (e.g., household visits and community-wide health promotion events) and directing patients to higher-level services as needed. In practice, PSF teams should be the gateway to higher-level services.
9. Drawing on longitudinal, state and municipal panel data, recent research suggests that PSF extension i s associated with improved health outcomes: (i) a 10 percent increase in state- wide PSF coverage was associated with a 4.6 percent decrease in infant mortality (IMR) controlling to other health determinants (Macinko et al. 2006); (ii) higher levels o f PSF coverage at the municipal level was associated with decreases in IMR, higher immunization rates and pre- natal overage and a reduction in hospital admissions (de Carvalho 2005); and (iii) higher municipal coverage i s associated with lower admission rates for preventable diseases in children (Sales and Gentile 1998; de Carvalho 2005). Comparative studies o f PSF vs. traditional basic care facilities found that the former outperformed the latter in terms o f service production, population utilization, supply o f preventive activities, and parents’ reports on health status o f infants (Facchini et al., 2006; Escorel, 2002). Finally, based on interviews with a small sample o f women, PSF and non-PSF units were compared in terms o f a subset o f quality, access and effectiveness indicators. PSF services were rated significantly superior in terms o f access to vaccination coverage, hospital maternity care, drug access, home visits and patient satisfaction (Mendes et al. 2004). Finally, inpatient treatment o f stroke decreased in municipalities with high PSF coverage from 52/10,000 to 38/10,000 (de Carvalho, 2005).
10. Although PSF i s a successful program and worthy o f continued Bank support, future success will depend on addressing the following challenge^:^ (i) l o w productivity o f family health teams particularly in terms o f meeting morbidity demand, contributing to long queues; (ii) difficulties in converting traditional primary care units to the family health approach; (iii) low prestige o f family health practice among physicians, contributing to high turnover; (iv) poor quality o f some health professionals, (v) weak referral systems, suggesting weak linkages between family health teams and higher level providers; (vi) lack o f information on quality o f care, efficiency and costs; and (vii) absence o f a performance orientation at the service delivery level. The proposed Project aims to support Government in addressing these problems.
2. Rationale for Bank involvement
11. The Bank has supported the Brazilian Reforma Sanitdria since i t s inception in 1988 through a series o f health investment projects aiming both at improving health status and addressing health system issues. Analytical work carried out by the Bank has supported both the formation o f government health policies and the design o f lending operations. The Human Development PSRL (FY04) provides the umbrella pol icy framework for the Bank’s assistance to
Claeson M, Mawji T, Walker C: Investing in the Best Buys: a Review o f the Health, Nutrition and Population Portfolio., FY 1993-99. HNP/World Bank, 2000.
These issues were gathered from the following sources: site visits made during supervisory missions, Viana et al. 2002A, 2002B; Mendes et al. 2004; de Sousa 2004; FundaqSLo Gertulio VargasEPOS 2002, and internal M O H documents.
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human development in Brazil. A trigger for the HD PSRL I was expansion o f the Family Health Program to 50 percent o f the population, with priority given to poor populations residing in rural and large urban areas. The A P L program has contributed to the PSF expansion from 32 percent to 45 percent o f the population (between 2002 and July 2006), but it i s unlikely to reach the trigger until 2007. Continued Bank support in this area i s necessary to ensure that coverage targets are achieved.
12. Although project financing represents a small portion o f federal PSF financing (about 5 percent), it provides significant leverage t o further the SUS reform agenda. In al l cases, there i s a high demand to participate in PROESF since financing i s additional to the regular Federal transfers. Most municipalities complement PROESF financing with their own investment resources, generating additional development gains. The potential impact for both PSF and the health system i s significant. Based on the experience to date, PROESF has been the main vehicle for extending PSF coverage, and as such, expanding the primary care system. For example, the MOH compared coverage performance in 10 PROESF municipalities that were matched with 10 non-PROESF municipalities. Between 2003 and 2004, the PROESF group increased coverage by 4 percent (from 49 to 53 percent), while the coverage in the non-PROESF decreased by one percent (from 10 to 9 percent). Moreover, 80 percent o f PROESF municipalities registered coverage gains compared to only forty percent o f non-participants.
13. The expansion o f primary care access also reduces inequalities as well as costly inefficiencies in the heretofore hospital-centered service delivery system. A robust primary care system creates the enabling environment to adopt lower-cost, effective care (particularly for the prevention and treatment o f chronic diseases), improve the efficiency o f treatment patterns through case management, and discourage incremental spending with no apparent health benefits. Finally, PROESF has been a pioneer in improving overall system governance by specifying performance targets, linking performance to financing, strengthening monitoring and promoting systematic evaluation.
14. Drawing on the accumulated experience o f PROESF 1, VIGISUS 2 and AIDS 3 Projects, the Bank i s well-positioned to support the government strategy to improve PSF performance. Both the PROESF and VIGISUS Projects have been instrumental to introducing results-based financing in the Health Ministry. The proposed Project will build upon this experience; introducing more advanced mechanisms which link levels o f financing to levels o f performance and thereby providing an incentive to participating municipalities to continuously improve coverage and quality.’ In addition, during PROESF 1 implementation the Bank team contributed to preparation and testing o f an innovative PSF quality assessment system and the upgrading o f the PSF monitoring system. Both systems will be rolled out in Phase 2.
In part because o f experience gained in the implementation of PROESF 1, the MOH recently approved a regulation that aims to tie future increases in federal grant financing for PSF and basic care to ed fthe achievement o f performance targets negotiated between the MOH and municipalities. As such, performance-basinancing wil l become part o f the MOH grant transfers financial subsystem through which over 80 percent o f federal health funds are channeled.
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3. Higher level objectives to which the Project contributes
15. The higher-level objectives o f the proposed Project are to improve health outcomes while raising the quality o f health spending in Brazil. The proposed A P L Phase 2 Project (PROESF 2) will support the expansion o f the federal government flagship Family Health Program (PSF) in large cities. Launched in the mid- 1 9 9 0 ~ ~ PSF i s a community-based, outreach-oriented primary health care model based o n family health principles.6 I t represents Government’s main strategy for extending primary care coverage. PSF expansion has focused on underserved, low-income populations.
16. As outlined earlier, the Program has had a significant impact on health outcomes and health system per f~ rmance .~ Building on this success, the Project aims to directly support the achievement o f four Mil lennium Development Goals (MDGs) by: (i) eradicating extreme poverty and hunger; (ii) reducing child mortality; (iii) improving maternal health; and (iv) combating tuberculosis, DPT, tetanus and other communicable diseases.
17. The Project i s aligned with Government and Bank strategies to create fiscal space and improve public sector performance. In addition to reducing inequalities, the expansion o f primary care access lessens costly inefficiencies in the hospital-centered service delivery system. Currently, about 40 percent o f hospital spending is directed to treatments that can be more efficiently and effectively treated at primary level. A robust primary care system creates the enabling environment to adopt lower-cost, effective care (particularly for the prevention and treatment o f chronic diseases), improve the efficiency o f treatment patterns through case management, and discourage incremental spending with no apparent health benefits. In sum, through strengthening primary care provision, the proposed Project would generate the basis for coordinating care across provider levels and containing costs and thereby improve the quality o f public spending in health.
18. The proposed Project is closely aligned with the strategic pillars o f the CAS - equity, competitiveness and governance - and with the overall HD strategy for Brazil by supporting actions that: (i) reduce poverty and inequality through extending and raising the quality o f basic health care in low-income urban neighborhoods, and ultimately, improving health outcomes; (ii) contribute to Brazil’s competitiveness/growth through improving the efficiency and affordability o f social spending (e.g., reduction o f costly but unnecessary hospitalizations), and improving labor force productivity (e.g., promotion o f healthy behaviors and early detection and timely treatment o f non-communicable diseases); and (iii) strengthen governance foundations by introducing accountability mechanisms in the health sector. The Project will also support a key operational dimension o f the CAS through the implementation o f a sector-wide approach (SWAP) *
As practiced in Brazil, the family health approach constitutes an active-provider, outreach model in which family health care workers deliver quality basic health care to households and communities. This model o f service provision aims to be more efficient and effective by focusing on prevention and early treatment, and using PSF as the gateway to higher-level services. Through the PSF, the Government seeks to stimulate the conversion o f traditional, passive-provider, facility-based primary care system to one based on family health principles.
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See Annex 1 for review of research on PSF impact. 7
6
B. PROJECT DESCRIPTION
1. Lending instrument, program objectives and phases
19. In 2002, the Board approved the seven-year US$550 million Brazil Family Health Extension APL Program (PROESF) in three phases. The Program seeks to improve utilization and quality o f publicly-financed health services by: (a) expanding and consolidating coverage o f the government’s Family Health Program (Programa de Sadde da Familia, or PSF) in about 187 municipalities, establishing well-articulated referral and counter-referral systems, and introducing performance-based financing and management arrangements; (b) establishing family health as a core element o f health professional and para-professional training; and (c) strengthening M O H capacity to monitor and evaluate PSF health services, policies and training activities on a systematic basis. The f i rst phase was completed on June 30, 2007, and the second phase i s planned to start on September 1 , 2008.
20. PROESF 1, the f i rst phase currently under implementation, focused on extension o f population coverage, establishment o f a federal transfer mechanism in support o f program- financed investments, pre-service and in-service training o f family health professionals and para- professionals, development and testing o f a performance-based financing and management system, design o f a quality assessment system, strengthening o f monitoring system, collection o f baseline data for subsequent impact measurement, and development o f protocols for referrals and care practices for PSF teams.
21. Box 3 below describes compliance with specific triggers. PROESF i s on track to comply with five o f six policy triggers, and all five implementation triggers. The trigger related to “an average o f 3 5 percent o f population in participating urban municipalities registered with Family Health teams” was substantially met. Given the Government decision to expand participating municipalities from 40 to 188’ at the onset o f PROESF 1, and nearly quadrupling the population base, the Project fe l l slightly short o f compliance, attaining 34 percent coverage rather the 35 percent coverage target. However, 120 municipalities (or 64 percent o f all participating municipalities) did meet the coverage target, achieving an average coverage o f 48 percent. These data provide evidence o f significant progress has been achieved regarding the APL trigger for PSF population coverage.
22. As shown in Table 1 below, PROESF 1 also achieved significant compliance with performance indicators despite the substantial expansion o f participating municipalities. O f the 188 participating municipalities, about 70 percent fully implemented the activities and investments included in signed “expansion and conversion” agreements, and complied with performance indicators. In contrast, only one municipality did not execute the agreements, and the M O H sought reimbursement. PROESF 1 financed the conversion o f about 2,400 traditional facilities to PSF health units (1,300 units remain unconverted).
O f the 188 municipalities, 187 implemented the coverage extension and conversion subprojects. 8
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Box 3 Achievement o f APL Phase 2 Triggers
Policy Indicators
1. Conversion Agreements approved and under implementation in at least 40 urban municipalities with greater than 100,000 residents to transform primary care organization and delivery to the family health approach. Exceeded: I88 municipalities with signed agreements and implemented coverage extension and coversion plans. 2. An average o f 35 percent o f population in participating urban municipalities registered with Family Health teams. Substantially completed: 34 percent coverage in all municipalities; 64 percent achieved target. However, the number ofparticipating municipalities expandedfrom 40 to 188. 3.30 percent o f participating municipalities achieve certification for Full Management of Basic Care per NOAS/Ol. Exceeded: 100 percent certiJied 4. Regulatory frameworks for accreditation o f PSFBasic Health Units and PSF training institutions approved, and agreement reached with the government on Phase 2 implementation plan. Exceeded: assessment manual and instrument, based on accreditation methodology, developed andfield tested. Implementation plan andfinancial incentive scheme for roll out to about 660 municipalities approved. 5. Performance-based management systems and instruments developed to strengthen municipal capacity to plan, manage and implement PSF, conversion plans and decentralization policies. Fully complied: system and contracting instruments developed and plan approved for implementation in subset of municipalities during Phase 2. MOH approved “basic care health covenants” pol iq, which wil l set performance targets for all municipalities receiving federal financing. 6. Performance-based federal transfer to finance PSF conversion under implementation. Fully complied: Regulation approved and under implementation.
Project Implementation Indicators
1. Baseline data (on social, health status, health seeking behaviors, spending, institutional and other aspects related to PSF, conversion plan and NOAS/Ol implementation) collected by means of household and provider surveys in 60 percent o f participating urban municipalities. Data i s analyzed and presented in report. Agreement reached with the on incorporating indicators into monitoring and evaluation plan. Exceeded: Baseline data collected in 23 I municipalities. 2. Comparative and quantitative evaluation of effectiveness and efficiency o f about 15 PSF Training Centers (Pdlos de Capacitapfo and a representative sample o f PSF teams established between 1997 and 2001). Fully complied: Evaluation completed. 3. Pre-service and in-service training o f about 14,000 family health professionals and para-professionals Fully complied: I I, 200 professionals and 81, I65 para-professionals trained 4. PSF protocols for referrals, counter-referrals and care practices developed and implemented in 50 percent o f PSF teams in participating municipalities Exceeded: protocols implemented in about 88percent of PSF teams. 5. Methodology and instruments for effective monitoring and evaluation developed and tested for: (i) PSF; (ii) PPI (programaqgo pactuada e integrada) (iii) Pacto de indicadores; and (iv) referral /counter- referral systems, and agreement reached with the government for implementation in Phase 2 Fully complied: PSF monitoring system developed including design of instruments and corresponding indicators; referral system for mother-child care developed and implemented; PPI evaluated.
8
Indicator
1. Average PSF population coverage in participating municipalities 2. Percentage o f physicians and nurses working for F H over total physicians and nurses working for Basic care attention I 5 - 25%'' I 41% I Exceeded 3. Percentage o f live born o f mothers which had 7 or more 61% I Exceeded I > or = 40% I
Achieve- Compliance Target ment
35% 34% Nearly
prenatal visits 4. Percentage of F H teams which had implemented protocols for referrals and counter-referrals 5. Percentage o f PSF teams applying protocols for maternal-child health 6. Existence o f a appointment centers for specialized care referrals 7. PSH teams with 9 average annual household visits per
> or = 20% 87% Exceeded > or = 30% 88% Exceeded
Exceeded
> or = 75% 95% Exceeded 50% 94%
eams receive
23. Thirty-five municipalities received a bonus payment representing 50 percent o f their original grant for significantly exceeding performance indicators related to: (i) population coverage; (ii) fiduciary implementation (e.g., at least 75 percent o f spending was supported by receipts; and (iii) compliance with PSF personnel and infrastructure norms. l2
24. O f the 14 performance indicators, the municipalities on average complied with 10 and attained near compliance on the remainder. Indicators were defined with only 40 municipalities
Based on 187 municipalities that implemented the coverage extension and conversion plans. 9
I' Target varied from 5 to 25 percent depending on municipal population size. Importantly, the baseline indicator at project onset was 28 percent. I' Target varied according to municipal population size.
These include: (i) full cadre o f personnel for all PSF teams; (ii) evidence that all team members work contracted hours (40 hours per weeks); (iii) uni ts contain full stock of equipment specified by for PSF norms, and (iv) infrastructure i s sufficient for teams to carry out functions and services. Compliance with norms was assessed through field visits.
12
9
in mind. The fact that nearly all were achieved for 187 municipalities i s a significant achievement. Finally, in a matched comparison between 10 municipalities participating in PROESF and 10 non-participants, the MOH found that the former had higher levels o f PSF coverage, pre-natal care, and reduced number o f hospital child admissions for respiratory infections and diarrhea than the control group. This data suggests that PROESF has increased access to and utilization o f basic care services.
25. The second phase will build upon the accomplishment o f the first phase, while strengthening the quality o f PSF care and states’ capacity to monitor and evaluate PSF services. In addition to supporting coverage extension in approximately 1 87 municipalities that participated in Phase 1 , the second phase will support quality improvement, strengthen capacity o f states’ to monitor and evaluate PSF, introduce a performance-based financing mechanism between the federal government and participating states and municipalities, and develop and test a results-based management system for PSF teams. Triggers for the third phase are presented in Table 2.
Table 2: Triggers for APL Phase 3 3 7 percent average population coverage of PSF in participating municipalities (current coverage [ 12/06]: 34 percent) 15 percent of PSF teams in participating municipalities participate in MOH’s PSF Quality Assessment Program (AMQ), including the application of the self-evaluation instrument and ranking according to AMQ quality stages (current level: 7 percent) PSF Conversion and Expansion Agreements signed with approximately 187 municipalities with greater than 100.000, including a linking of a proportion of financing to achievement o f specified technical and fiduciary performance indicators. 20 (of 27) states have implemented M&E plans for PSF/AB, including: (i) establishment and staffing o f an M&E unit within the State Health Secretariat; (ii) definition o f indictors for PSF results monitoring; (iii) collection o f baseline data for monitoring indicators; and (iv) preparation of report analyzing the baseline data. Model for results-based management of PSF teams developed and tested in at least three municipalities.
2. Project development objective and key indicators
26. Consonant with the Program goals, the objectives o f the proposed second phase are as follows: (i) increase access to Family Health-based primary care in large, urban municipalities; (ii) raise the technical quality o f and patient satisfaction with primary care; and, (ii) improve the efficiency and effectiveness o f Family Health service providers as well as the broader delivery system.
27. Means to achieve these objectives include: conversion o f traditional basic care providers to the PSF approach, expansion o f PSF coverage, increasing the provision o f on-demand services, strengthening health promotion and management o f chronic diseases, strengthening in- service and pre-service training o f personnel, applying quality o f care assessment mechanism; introducing results-based management, including quality-based purchasing, applying performance-based financing mechanisms, strengthening monitoring practices and information
10
management both in states and municipalities and sup orting systematic impact evaluation. The main Program and Project indicators are the following: 73
Higher Order APL Outcome Indicators (2002-2014): Improvements in the following indicators by at least 10 percent over baseline in participating munic ipa l i t ie~ '~:
Infant mortality (decrease) Per capita contact with primary care providers (increase) .
Project Performance Indicators (2008-2012). The main project indicators for the Phase 2 are:
For participating Municipalities Acces~/equi ty '~
0
Effectiveness 0
Oual i t y
0
Efficiency
Institutional 0
37 percent PSF population coverage .35 ratio patients with hypertension and diabetes managed by PSF teams compared with estimated number o f patients
85 percent infants <1 with full vaccination coverage (DPT-H, polio, measles, tuberculosis) 70 percent pregnant women attended by PSF teams have 7 or more pre-natal consultations Maintain 10 percent referral rates from PSF to specialized care
15 percent al l PSF teams applied quality evaluation instrument and are ranked according to standard ( A M Q system) 15 percent PSF teams in a sample o f municipalities using evidence-based clinical guidelines for hypertension and diabetes
8 percent reduction o f hospital admissions for A N for children -6.
10 percent municipalities applied quality evaluation instrument in the areas o f PSF management and coordination ( A M Q system).
For participating states: 40 percent states establish performance agreements with at least 25 percent municipalities with 4 00,000, including at least 10 performance indicators. 10 percent o f municipalities with <1 00,000 population in at least ha l f o f the states, participate in quality assessment program (AMQ), including completion o f self-assessment and development o f plan to address quality gaps.
I3 Annex 2 contains the complete l i s t o f performance indicators. l4 Maternal Mortality. This indicator was excluded as it i s closely related with obstetric care provided by hospitals; Out-of-pocket expenditures. This indicator was excluded as there i s no baseline data related to expenditures on primary health care; however, this indicator continues to be included in the Program monitoring framework. l5 In this phase, PROESF wants to strengthen quality o f PSF rather than expanding coverage significantly. MOH wi l l change the methodology o f measuring coverage in March 2007: the number o f people covered by each F H team wi l l change from 3,450 inhabitants to actual annual enrollment per PSF team (in 2006, 3,000 inhabitants per F H team).
11
For Federal Ministry of Health: Establishment o f a results-based management system that l i n k s project financing to states and municipalities along the following dimensions: objectives, performance indicators, outputs, inputs, investment priorities and spending; this would include integrated information system, manual to support implementation, and monitoring o f implementation o f a results-based management system; PSF costs collected and analyzed, accounting system developed; National PSF Performance Award program under implementation; Proficiency test o f PSF professionals developed for recent graduates o f al l PSF training centers; and At least 1 inter-municipal cooperation plan implemented in each o f 20 states to strengthen PSF, specifying activities in three areas: management, coordination and service provision.
3. Project components
28. The second phase will consist o f three components: (i) expansion and consolidation o f Family Health care in municipalities over 100,000 inhabitants that participated in phase 1 ; (ii) strengthening state capacity for technical support, supervision, and monitoring o f family health services; and (iii) strengthening federal policy and technical support to, and oversight o f the family health program. Municipalities and states would submit subprojects for financing and implementation under Components 1 and 2. Annex 4 contains detailed component descriptions.
Component 1. Expansion and Consolidation of Family Health Care in Municipalities (US$133.450 million total costs o r 80.0 percent; US$55.0 million loan amount o r 66.0 percent).
29. This component aims at scaling up and strengthening PSF capacity at municipal level. The strategic aim i s to raise PSF population coverage from 34 to 37 percent in participating municipalities. Coverage extension activities would continue to focus on large urban areas, which are characterized by poorly integrated, traditional service delivery systems and large numbers o f families living in poverty and confronting severe social risk. The component would support four sets o f activities (i) the extension o f Family Health to municipalities in an initial phase o f implementation, and continued expansion o f the model in municipalities that have already made significant headway on family health, but have yet to attain coverage targets. This activity would also support the conversion o f traditional units to the PSF model; (ii) consolidation, quality improvement and innovation in municipalities that have shown significant progress in PSF coverage extension in the first phase, including strengthening supervision and managerial capacity, establishing l i n k s to higher levels services for care management, and introducing the PSF quality assessment program; (iii) support for municipal-based in-service training;16 and (iv) improvement o f monitoring and information systems. Implemented by 187 municipalities o f approximately 250 municipalities with populations o f 100,000, this component would finance works (new construction and rehabilitation), goods, training and technical
Financing in-service training activities that were centrally implemented in Phase 1 through counterpart hnds would also be decentralized to participating municipalities in the second phase of the project, through the Ministry's grant transfer subsystem @ndo afundo).
16
12
assistance. All financing will be channeled to municipalities through pooled funding (SWAp approach).
Component 2. Strengthening State Capacity for Supervision, Monitoring and Technical Support of Family Health Services (US$17.450 million total costs or 10.5 percent; US$12.450 loan amount or 15 percent).
30. This component aims at strengthening state capacity to (i) support municipalities extend coverage, improve technical quality, and manage service delivery; (ii) improve the supply, quality and stability o f family health teams; and (iii) conduct supervision and monitoring as key functions o f state health secretariats. Consistent with recently approved MOH regulations, states will play an increasingly important role in measuring results, monitoring municipal performance, and assessing health delivery statewide. They also are responsible for increasing the quality o f health professionals and para-professionals and providing technical and supervisory assistance (in policy making, planning, information and service management, and human resource training) to low-capacity munici alities. l7 Implemented at the state level, this component would include three sets o f activities: (i) organizational structuring o f state health secretariats to support the new state roles specified above, including the implementation o f MOH quality assessment program in small and medium size municipalities; (ii) support for continuous education o f family health professional and paraprofessional staff; and (iii) institutionalization o f monitoring and functions in state secretariats, including the monitoring and supervision o f municipal PSF services. The component would be implemented by 26 States and the Federal District (DF), and would finance goods, materials, training and technical assistance.
R
Component 3. Strengthening Federal Oversight of the Family Health Program (US$15.8 million total costs or 9.5 percent; US$16.0 loan amount or 19 percent).
3 1. This component aims at strengthening PSF policy and technical support, and oversight capacity at federal level. This component would strengthen the capacity o f the Ministry o f Health to provide support to states and municipalities regarding the implementation o f the Program. The component would finance development o f PSF accountability arrangements, including results- based financing and management, and human resources; and support the states and municipalities to develop training programs, research, monitoring and evaluation, and coordination and supervision capacity. I t will also finance research and evaluative studies on specific aspects o f PSF service organization and delivery as wel l as institutionalize impact evaluation in the MOH. Several activities would support implementation o f interventions specified for Components 1 and 2, including (i) development o f inter-municipal cooperation agreements; (ii) development o f a new monitoring system for federal performance assessment o f states and municipalities; (iii) introducing results-based management practices (e.g., performance
Recently-approved MOH regulations grant states a central role in oversight, monitoring and evaluation o f municipal delivery systems (MS Portaria, 399, February 22, 2006). Eight states have taken a pro-active role in primary care by fmancing service extension through state-to-municipal grant transfers. Others have made purchases for goods and supplies which are distributed to municipalities. Low-capacity municipalities generally include but are not limited to small municipalities.
17
Initially, the states would focus on small and medium size municipalities. 18
13
contracts between municipal managers and PSF teams); l9 (iv) development o f results-based management system for federal financing to states and municipalities; (v) development and testing o f cost accounting systems for AB/PSF; (vi) development o f clinical guidelines for primary care case management o f specific diseases and conditions; (vii) strengthening formation o f family health professionals through supporting specialization, and research for Family Health professionals; (viii) training and capacity building activities for Family Health Teams; and (ix) special initiatives to share experiences and innovations o f PSF teams. Implemented centrally, the component would finance goods, training, technical assistance, and the project incremental operational costs.
4. Lessons learned and reflected in the project design
32. Program design reflected lessons learned from: (a) evaluations o f impact o f the PSF in Brazil; (b) assessments o f implementation and operational problems; (c) international experience with the implementation o f primary care models; and (d) previous Bank work in health operations and evaluations. The main lessons learned at inception were:
e
e
e
33.
PSF has great potential to improve the coverage and quality o f basic care, as well as health outcomes. Successful implementation o f new primary care models depends on changes in underlying incentives. Given the dynamic nature o f the Brazilian health system, it i s important to allow for flexibility, but within an agreed framework that emphasizes results.
The first phase A P L suffered a series o f operational set backs that delayed start-up, compromised implementation, and resulted in an -extension request. Although -the original Program design called for supporting 40 municipalities in Phase 1 and 60 additional municipalities in phase 2, Government decided to expand coverage to the universe o f 250 large, urban municipalities.20 This taxed M O H implementation capacities, in part because monitoring systems and technical assistance arrangements were not in place to fol low such a large number o f municipalities. The Government’s decision also resulted in the inclusion o f municipalities with very weak technical and fiduciary capacity requiring considerable M O H assistance to plan and implement project-financed interventions. However, broader Government human resource policy resulted in the lost o f seasoned and skilled technical and fiduciary staff within the MOH.21 Taken together, these elements undermined the capacity o f the M O H to provide technical and fiduciary support. Finally, the M O H olicy to regionalize training failed to address the PSF training needs o f the municipalities! The M O H conducted an assessment o f municipal
l 9 The contracts wi l l initially focus on clarifying organizational goals and setting coverage and quality performance targets that are negotiated between municipal managers and PSF teams. I t wi l l draw on a successhl PSF contracting model developed by the City o f Curitiba. See. “Enhancing Performance in Brazil’s Health Sector: Lessons from Innovations in the State o f SBo Paul0 and the City o f Curitiba.” World Bank (2006); Report No. 35691-BR.
187 participated in PROESF 1. There exists considerable demand from most large urban municipalities to participate in PROESF 2 in part because the project represents additional funds beyond regular M O H grant transfers. Demand i s also high for technical and fiduciary assistance provided by the Project. 21 The Government replaced seasoned long-term consultants with recently-hired, inexperienced civil servants. 22 An amendment to the loan agreement eliminated Bank financing o f training activities. A l l training was financed with counterpart funds.
20
I
14
technical, managerial and fiduciary performance based on an in-depth survey and cluster analysis. Municipalities were rated and categorized according to r isks along these three dimension^.^^ An audit report provided insights into procurement problems faced by m ~ n i c i p a l i t i e s . ~ ~ The Bank and M O H teams also systematically assessed M O H capacities and problems in terms o f supporting the municipalities. Drawing on these sources, Box 4 presents the PROESF 2 design responses to the lessons learned from Phase 1.
5. Alternatives considered and reasons for rejection
The following alternatives were rejected:
34. N o project. The current programmatic design has proven robust for meeting stated objectives, as evidenced by the results o f the first phase. The programmatic platform has been sufficiently flexible to accommodate an increase in the number o f participating municipalities, the introduction o f pooled funding with the states, and expansion o f the scope o f activities (e.g., strengthening state M&E capacity). Moreover, the government and Bank agreed that the value added o f the loan and Bank involvement has been to assist the M O H to (i) introduce results- based approaches toward PSF implementation and expansion; (ii) develop and implement strong monitoring and evaluation mechanisms in support o f PSF implementation; (iii) assist speedy transformation o f primary care practices to a PSF model; and (iii) insert PSF implementation into regionalization reforms. Therefore, the Government continues to seek Bank financing for phase 2.
35. Focus on r u r a l vs. urban areas. The Program has been focusing on extending PSF to urban areas, where about 38 percent o f those in the poorest income quintile live. Health indicators among the urban poor are as bad as or worse than indicators among the rural poor. One o f the goals o f PROESF i s to reach populations with limited access to and underutilization o f primary health care services. There i s already substantial coverage among small municipalities with large rural areas as M O H focused PSF expansion there during the first implementation stage (1997-2001). Coverage extension in rural and small urban areas also was relatively easy due to the absence o f alternative municipal providers, population density and interest from political leaders. In phase 2, however, Component 2 will support states to provide technical assistance, training and managerial support to small municipalities in rural areas.
36. Standard vs. flexible disbursement scheme. Given the good results o f Phase 1, and special remedies and risk mitigation arrangements agreed with the government (see Annexes 7 and S), the flexible disbursement scheme applied in Phase 1, and based on pooled financing (SWAP) and the use o f Statement o f Transfers, would continue to be used during Phase 2. I t was agreed, however, that the Project would not include a unit cost-based disbursement scheme. Such a scheme would require an in-depth cost analysis that would take several months, and delay the proposed processing schedule. However, the M O H did agree to conduct the cost analysis during implementation o f Phase 2.
The analysis demonstrated that nearly one-fifth o f participating municipalities suffer from week technical, fiduciary and managerial capacity, and require significant MOH support to plan and implement project-financed activities.
23
PriceWaterHouseCooper (2005). 24
15
Box 4 Lessons Learned from PSF Model and PROESF 1 Implementation that will be incorporated
into the Design of the Proposed Project (PROESF 2)” Technical 1. Define a manageable number of easily verifiable indicators to monitor and assess performance. 2. Strengthen the capacity o f family health teams to respond to patient demand. 3. Strengthen interventions to: (i) expand quality assessment system applied to municipalities and family health teams, based on results of recently-developed quality assessment instrument; (ii) integrate PSF into municipal policy making and planning; (iii) implement network arrangements that link family health teams to diagnostic and specialized care centers as well as logistic and transport systems;26 and (iv) promote healthy behaviors and integrated management o f chronic diseases. OperationaVFiduciary 1. Set up a permanent cadre of central- and state-based technical and fiduciary personnel to provide technical support to participating municipalities. This i s particularly important for low capacity municipalities. 2. Develop and implement instruments to monitor compliance with performance indicators specified in signed federal-municipal agreement. Make greater use o f the states in monitoring program and project performance. 3. Finance training through Component 1, decentralizing responsibility to high capacity municipalities. For low-capacity municipalities, support municipal training partnerships or state-coordinated training initiatives. 4. Conduct in-depth technical and fiduciary risk assessments and categorize municipalities according to technical and institutional capacity to plan, supervise and monitor family health care. Based on these assessments, craft customized plans and interventions to: (i) extend services; (ii) strengthen planning, management and supervisory capacities for primary care; (iii) strengthen fiduciary capacity; and (iii) support municipalities in change management. 5. Support management and fiduciary improvement in state and municipal plans, especially in low capacity municipalities. 6. Introduce eligibility criteria for continued project participation for states and municipalities: (i) presence o f a full-time coordinator for family health and basic care; (ii) application of project financing to investments and costs involved in primary care expansion and quality improvement; and (iii) timely provision o f documentation o f at least 75 percent of eligible expenditures in the previous year. 7. Design a standardized accounting model (urestuqCo de contus) and provide training to participating municipalities. 8. Establish annual workshops with municipalities to identify common problems and solutions related to fiduciary processes.
C. IMPLEMENTATION
1. Linking project financing to performance
37. The Project would seek to implement a more robust results-based financing system to stimulate performance o f participating states and municipalities in Components 1 and 2 respectively. The concept involves linking levels o f financing to levels o f performance in terms of coverage extension, quality improvement, efficiency, and fiduciary actions.27 It will consist o f
” This section i s based on in-depth assessments of PROESF 1 progress and problems conducted by the Bank team, March 2005, and the MoH, June 2005. 26 Development of network arrangements will be included in the forthcoming Qualisus-Rede Project. 27 The scheme does not involve performance-based disbursement by the Bank. Applying the SWAP or pooled resource model already under implementation in PROESF 1 and VIGISUS 2, the MOH will allocate resources
16
four features (i) a scheme that l i n k s payments to levels o f performance;28 (ii) bonus payments for achievement o f performance targets tied to “elective” indicators; (iii) eligibility criteria; and (iv) exclusion for non-execution.
3 8. The accountability arrangement consists o f signed management contracts that specify performance indicators, as wel l as spending and implementation plans. Performance will be assessed at project mid-term (e.g. after 18 months o f implementation) and conclusion (e.g., 3 years). Performance levels achieved at mid-term will determine financing levels for the subsequent 18 months o f execution. Performance levels achieved at the conclusion o f this APL Phase 2 would determine municipal and state participation as wel l financing levels in A P L Phase 3.
39. Figure 1 presents the scheme for linking payments to performance for participating mun ic ipa~ i t i es .~~ Once eligible3’ and based on an assessment o f technical performance (coverage and utilization) and financial execution during PROESF 1 , each participating municipality will be rated and placed in a payment category, which i s represented by the boxes in the graph. For example, l o w performers will be placed in categories (d), (g) and (h) while higher performers will be placed in categories (a), (e) and (i). Each category represents a payment level with the lowest level ($X in box g) being less than one-half o f the highest level (box c).
FIGURE 1
FOR PARllClPATlNG MUNClPWTlES (variation in per PSF team allocations
PERFORMANCE-BASED INCENTWE SCHEME
mrmn p r team AibXtlMI
40. Movement along the vertical axis will be based on compliance with population coverage targets. Movement along the horizontal axis will be based on a weighted point system applied to both technical (coverage, quality, efficiency) and fiduciary (procurement and financial management) indicators. Minimum point levels will be established to trigger movement to higher payment categories. Performance will be assessed after 18 months and 3 years o f implementation. The weights, values, and other aspects o f the performance-based financing scheme will be detailed in Operational Manual. In sum, a municipality could increase project financing (e.g., value o f payment per PSF team) by a factor o f 2.5 if it achieves agreed benchmarks (See Figure 1). This would provide a strong incentive to comply with performance indicators. Municipalities could also gain an additional 15 percent o f financing by achieving
according to spending and implementation plans proposed by participating municipalities. These MOH allocations of pooled loan proceeds wi l l be linked to performance. ’* This scheme consists o f two parts and each follows the model illustrated in Figure 1. The first i s assessed every six months and i s based on one health (coverage) indicator and one fiduciary (financial execution) indicator. The second i s assessed at project conclusion and i s based on an expanded set o f health and fiduciary indicators (See Annex Table 3.3 and 3.4). Municipalities can earn higher levels o f financing under both parts o f the scheme. 29 A similar scheme, but based on a different set o f indicators, wi l l be applied to the states (Component 2). 30 See Table 3.5 o f Annex 3 for eligibility criteria.
17
targets linked to “elective” indicators. In contrast, l o w performance can result in downgrading (e.g., movement from category [e] to category [g], for example). Continued non-performance by a municipality already placed in the lowest category (g), would result in exclusion from project financing. Further, very l o w execution o f project financing for any munici ality as well as irregularities in the use o f funds can result in exclusion from Phase 3 financing. 8
2. Institutional and implementation arrangements
41. The second phase o f the Family Health Extension Program i s expected to be implemented over a three-year period. The Project would have an expected Effective Date o f September lSt, 2008, and a Closing Date o f March 30, 2012. The total project costs are US$166.9 million, with a loan amount o f US$83.45 million.
42. The Project would be coordinated and partially implemented by the Department o f Basic Health Care (DAB) o f the Ministry o f Health (MOH). DAB would count on the Ministry’s regular institutional structure for the technical oversight o f the project, which would be strengthened by a group o f technical and fiduciary consultants.
43. The eligible m ~ n i c i p a l i t i e s ~ ~ and states, through their Secretariats o f Health, would be responsible for the implementation o f 80 percent o f Bank’s financing. To this end, the municipalities would present subprojects to expand the number o f Family Health teams, and improve basic health care delivery. The 26 states and the Federal District would be eligible for benefiting from the Project by presenting subprojects for strengthening their capacity for monitoring, evaluation and continuous education. Based on lessons learned from Phase 1 , the Project would finance under Component 3 a group o f consultants for technical and operational advice and assistance to such municipalities and states.
44. DAB would also be supported by a small group o f operational staff who would be in charge o f carrying out fiduciary and administrative tasks associated to the project’s daily implementation. The Bank shall be satisfied with the Terms o f Reference and the proposed candidates, at least for the key positions under this implementation scheme. The project implementation would be supported by a revised Operational Manual containing relevant information for the three different levels o f implementation - Federal, state and municipal.
45. Pooled Financing: To satisfy the request o f the government regarding Bank participation in the grant-based financing system, known as fundo-a-fundo, and through which federal government finances health services managed by states and municipalities, municipal financin system, phase 2 would continue to apply a pooled funding approach launched under Phase 1. This arrangement has several advantages: (i) allows for a single procurement, financial
35
Exclusion criteria are presented in Table 3.6 o f Annex 3. Municipalities with more than 100,000 inhabitants. In Component 1, loan financing will be mingled with two large grant transfers, PSF and Basic Care, which are the
main source o f federal finding for the Family Health Program. In 2005 the 187 targeted municipalities received approximately US$679 million from these grants. Loan financing from the proposed project will represent an additional annual transfer of about US$27.5 million, or 4.0 percent o f total Program spending to these municipalities. In Component 2, loan financing will be mingled with the MAC Program transfer (medium and high complexity). In 2005, the states received US$43 million through the MAC. Loan financing will represent an additional annual transfer of US$8.0 million or 19 percent o f total Program spending.
32
33
18
management and disbursement system, which reduces transaction costs o f parallel systems; (ii) directs government and Bank efforts to technical and fiduciary oversight, monitoring and strengthening o f the much larger PSF program rather than r ing fencing the much smaller Bank- financed project; (iii) inserts the proposed Project into a high-priority programmatic and policy framework; and (iv) creates an opportunity to link both Bank and government financing to results. Through signed contracts, municipalities and states face health performance benchmarks. Failure to reach performance targets can affect levels o f financing during the project cycle. In effect, pooling benefits both the government and Bank by redefining a partnership to focus on results.
46. Approximately, 80 percent o f Bank financing would be allocated through two parallel pooled funding arrangements (SWAP). The f i rs t would entail pooling o f Bank financing with M O H grant transfers for urban municipalities with the purpose o f expanding and consolidating family health. Approximately, 65 percent o f Bank financing would be allocated through these municipal subproiects (Component 1). The second would involve pooling o f Bank financing with M O H grant transfers for states with the purpose o f strengthening their capacity for M&E, provide technical support to municipalities, and improve the quality and supply o f human resources. About 15 percent would be allocated through these state subproiects (Component 2). The remaining 20 percent o f financing would be administered directly by the Ministry o f Health to fund activities that yield national benefits (Component 3).
47. The proposed Project would continue supporting innovative operational arrangements in the SWAP components, including financing a share o f the government transfers for PSF instead o f a share o f each transaction (as i s normal practice), disbursements against Statement o f Transfers emitted by the MOH, annual certification o f expenditures by states and municipalities through internal and independent audits, the application o f national rules and systems for procurement and financial management, fiduciary risk assessments, and strengthening o f sub- national's fiduciary capacity. During the f i rst phase o f the project, these innovative features have facilitated the smooth f low o f Bank funds to municipalities, created a single oversight and reporting system rather than parallel systems for Government and Bank purposes, reduced the size o f the project administrative unit, and reoriented Bank supervision to technical matters including strengthening the Government's fiduciary framework. To the extent possible, the Project would rely on national financial and procurement systems. In addition, the Project would also provide support to improve fiduciary processes o f "high risk" states and municipalities. The proposed Project would apply a "positive list" approach that can be changed in agreement with the Bank, to procurement for participating states and municipalities. To a greater or lesser extent, each o f these measures facilitates the implementation o f performance-based financing mechanisms described above.
48. Capacitv Building: Based on technical and fiduciary assessments o f municipal performance in Phase 1, a capacity building plan will be established for low-capacity municipalities. Based on this plan, the Project would finance technical assistance and training. In terms o f fiduciary upgrading, the plan would outline TA and training to set internal auditing
19
process, accounting procedures for works and goods, reconciliation processes for project outlays, and standard documentation for contracts and other transaction^.^^
3. Monitoring and evaluation o f outcomeshesults
49. A Monitoring and Evaluation (M&E) system was established during Phase 1, and would be simplified and strengthened during phase 2. The monitoring system and planned impact evaluation would assess performance o f the proposed Project and the A P L program. The monitoring system, complemented by the collection and analysis o f ex-post data,35 would determine whether the Project and the A P L program outcomes and results were achieved, as specified in the Results Framework (Annex 3). The M&E system would address the following questions: (i) has the program contributed to improved health outcomes in participating municipalities when compared to non-participants?; (ii) has the program contributed to the coverage, enhanced quality and improved efficiency o f primary care providers?; (iii) has the program built capacity and strengthened municipal management systems and PSF training institutions?; (iv) do program outcomes vary across groups o f intended beneficiaries across municipalities?. If so, what factors contribute to this variation?; (v) what would have happened in the absence o f the project?; (vi) are there unintended effects o f the program, either positive or negative?; (vii) can program design be altered to improve impact?; and (viii) has the performance-based financing system contributed to observed results?
50. To complement current M O H information systems and to add rigor and coordination to the processes related to data collection, verification, and analysis, the M O H has developed a results-based management system (RBMS). RBMS would be applied during the execution o f the proposed project. RBMS aims to link project grant financing to states and municipalities along six dimensions: objectives, performance indicators, outputs, inputs, investment priorities and investment spending. I t will draw on and integrate data collected through M O H and government technical and financial information systems and through supervisory site visits for four o f the five above-mentioned M&E areas: PROESF 2 performance, PSF performance, PSF institutional and managerial capabilities, and fiduciary capacity.
4. Sustainability
5 1. The Program i s likely to be sustainable in the long run due to the high level o f ownership from all stakeholders, and the significant political and financial investment that has been made. The program also received significant backing in i t s early stages from international actors in Brazil, initially from UNICEF and UNDP and recently from the Inter-American Development Bank. Strong political support for PSF from two different governments (Fernando Henrique Cardoso and Luiz Ignacio “Lula” da Silva) governments, coupled with i t s development through an existing network o f health agents from the PACS program, meant that from 1995 onwards the PSF took on a primary position in the Ministry o f Health agenda.
52. many municipalities, and more recently, from a number o f states.
The program has received strong financial support from the federal government and It i s one o f the largest,
34 This i s based on recommendations fiom a procurement audit report (PriceWaterhouseCooper, 2005). Baseline data was collected during APL Phase 1. 35
20
federally-funded health programs, spending about US$750 mi l l ion in 2004, representing 5.6 percent o f total federal expenditures for health and 12 percent o f transfers to the subnational level. Between 2002 and 2004, federal financing increased by 75 percent, demonstrating continuing federal support.36 Depending on the level o f coverage and population, municipalities contribute an additional 10 to 50 percent. More recently, eight states have created special programs to finance PSF extension.
53. By design, the PSF i s intricately woven into a well-established and extensive participatory process in the health sector. In addition to the high priority bestowed by the MOH, the PSF has been discussed and strongly endorsed by stakeholders through consultative mechanisms, including state, municipal and local health councils (to secure client inputs) and the Intra-governmental Management Commissions (to secure inputs from federal, state, municipal health authorities and staff). Basic health priorities and corresponding indicators that buoy the PSF resulted from a series o f consultations with state, municipal and local health councils during 2000, and published by the M O H (Portaria no. 393/GM) in March, 2001. In 2006, the M O H has approved the National Health Agreement and the National Policy on Primary Health Care. The National Health Agreement establishes that municipalities are responsible for primary health care provision in cooperation with state and federal government. The National Policy on Primary Health Care, which was agreed by the three levels o f management o f the national health service -- National Health Council (CNS) and Nation Councils o f State and Municipal Health Secretaries (CONASS and CONASEMS) -- reaffirms that Family Health i s a top priority for the national health service (SUS), and describes the roles and responsibilities o f different levels o f management.
Ownership.
54. Financial. The government's top priority in the health sector i s to extend PSF coverage to urban municipalities. Bank financial participation represents a fraction o f PSF financing. Recent financial reforms have facilitated stability o f funding for the health sector. M O H budgetary allocations to PSF increased by 10 percent annually between 2001 and 2006. Finally, as PSF coverage expands, the MOH recently merged separate transfers that currently finance Basic Care (PABfixo) and Family Health (PABvar) into a single block grant, thus ensuring PSF sustainability.
Many municipalities with high PSF coverage also finance PSF with the federal transfer for Basic Care (fixed PAB). Combining both transfers, the MOH spent about US$1.5 billion nationally or 20 percent of its budget on PSF and Basic Care in 2004.
36
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5. Critical risks and possible controversial aspects
Risk
lhange in health strategy, specifically n terms o f back peddling on scaling ip provision and financing primary iealth care through Family Health
viayors’ commitment to PROESF
:ragmentation o f project funds by ncluding too many municipalities in he project
Weak technical and fiduciary capacity If municipalities and states mplementing the Project may :ompromise execution o f investment inancing.
l igh staff turnover at the M O H
I igh staff turnover in family health eams
herall Risk Rating
N
M
H
S
S
H
S
Risk Rating - H (High Risk), S (Substantial Risk:
Risk Mitigation Measure
A new Government i s likely to continue supportink family health policy. Policy dialogue, HD PSRI policy conditions and PROESF 2 APL design providc the institutional framework and incentives for i continued focus on Family Health. Municipal financing for PSF would be conditional t c past and h t u r e performance, and local co-financing. High risk municipalities would receive increasec technical assistance. Stepping out strategy applied if political wi l l wanes. Project financing i s ensured for municipalities wit1 good past performance. Project financing i s conditional to building technica and fiduciary capacity for municipalities with pas poor performance. Federal and state PSF teams would provide increasec technical assistance and training for municipalities a risk. An estimated one-fifth o f participating municipalities have weak technical and fiduciary capacity. Municipalities have been classified by technical and fiduciary risk, and differentiated TA plans wi l l be developed. Fiduciary performance indicators (linked to levels o f financing) and eligibility and exclusion criteria (for participating states and municipalities) are included in the project design. A capacity- building pre-phase wi l l be established for low- capacity states and municipalities. These subnational units wi l l have to “graduate” to an acceptable fiduciary standard before becoming eligible for regular investment financing. TA wi l l also focus on strengthening MOH’s internal controls and oversight system to facilitate close monitoring o f fiduciary processes and project execution at the subnational level. Disbursement under the Project i s conditional to the MOH, states and municipalities maintaining stable, high quality PSF management teams. Decentralize TA and support to states and create regional teams. This i s an issue that plagues the entire public system, and requires a systemic solution: Provide additional financial and technical incentives for staff stability. Support efforts to raise the profile and prestige o f familv health staff. Project design and preparation, and disbursement conditions wi l l seek to reduce the overall risk from S to M M (Modest Risk), N (Negligible or Low Risk)
Risk Rating
N
M
M
M
M
S
M
22
6. Loadcredit conditions and covenants
Disbursement Conditions
Component 1 Municipal Results-Based Agreements between MOH and participating municipalities signed and include performance indicators that are linked to financing.
Component 2: State Results-Based Agreements between MOH and participating states signed and include performance indicators that are linked to financing.
D. APPRAISAL SUMMARY
1. Economic and financial analyses
55. Based upon project costs and the measurable economic benefits flowing from the successful implementation o f the proposed project, anticipated benefits over a 1 0-year period consist o f 39,500 lives saved, and 881,000 productive l i fe years gained through early detection and treatment o f diseases. In addition, the Project would reduce significantly the number o f hospital admissions, producing substantial savings over the medium-to-long term.
56. The main results for both the 3 year project duration and the longer horizon o f 10 years are summarized in Annex 9. Although the economic and financial analysis found negative net benefits (US$260 million) for the 3-years project durationY3’ over a 10-year period benefits greatly outweigh project costs, producing an estimated net present value o f US$745 million. The internal rate o f return (IRR) i s estimated at 48 percent for the 1 0-year horizon considered.
57. The MOH, as well as the state and municipal health secretariats, have since the mid- 1990s consistently increased resources allocated to primary care and especially to PSF, both in absolute terms and as a proportion o f total budget. This support and priority given to the program, and the sustainable funding coming from the implementation and regulation o f EC 2938 will ensure the sustainability o f the program.
The negative NPV during the 3-year implementation o f the project are due to three main factors: (i) the initial project investment; (ii) the increase in recurrent costs associated with coverage expansion; and (iii) the assumed delay o f one year between project starting and the beginning o f the flow o f benefits (the assumption i s that impact on health wi l l take one year to emerge. Negative NPVs in the early phase o f health projects are common. What i s more important i s to achieve a positive NPV during a reasonable time frame. 38 Constitutional Amendment (EC) no. 29 requires all levels o f government to allocate a minimum proportion o f their budget to health, thus reducing the possibility o f historical swings in health programs financing. The federal government i s required to increase budget allocation to health in the same proportion as GDP growth; state and municipal governments are required to spend at least 12 percent and 15 percent o f their tax revenues to health. A few states and many municipalities already allocate more than these percentages.
37
23
2. Technical
58. A series o f technical studies and evaluations o f the current reform process, Program and Phase 1 were carried out, which supported the design o f phase 2. The main technical issues identified in the Family Health Program, and addressed under phase 2, are presented here by order o f i m p ~ r t a n c e : ~ ~
Human Resources: (i) High rotation o f family health doctors in part due to uncertainty o f contractual relationships, l o w prestige, absence o f career possibilities, and competition among municipalities, especially for physicians; (ii) L o w clinical and public health qualifications o f Family Health staff (doctors and nurses); and (iii) difficulties implementing pre-service education and in-service training program.
Constraints to implement expansion o f family health model: (i) strong bias toward hospital and emergency care; (ii) absence o f health networks and lack o f clinical guidelines to facilitate case management across health care settings and organizations; and (iii) resistance from medical stakeholders (universities, medical societies and unions) to further development o f Family Practice and the Family Health Program.
Management shortcomings: (i) agreed results indicators are not used by municipalities to monitor performance; (ii) information systems are fragmented; (iii) lack o f governance by municipal councils; (iv) centralization o f procurement at municipal level; (v) weak supervisory capacity.
3. Fiduciary
59. Procurement: MOH, participating states and municipalities would carry out procurement under the proposed Project. The capacity o f the MOH, and participating states and municipalities to implement procurement actions for the Project was assessed and action plans were developed to strengthen it. While no I C B contracts are expected, consultant contracts estimated to cost the equivalent o f US$lOO,OOO or above, financed through pooled funding mechanisms, (e.g., Components 1 and 2) would be separately identified.
60. Consistent with par. 3.3 o f the Guidelines, for procurement below the threshold for international procurement, and given that the Bank has found local procurement procedures acceptable Report No 28446-BR), the Bank would accept the use o f the competitive procurement procedures as set forth in Brazil's national law for the procurement o f goods and works under Components 1 and 2, as detailed in Annex 8. All selection o f consultants, however, should fol low the Bank's Consultant Guidelines.
61. Procurement compliance should be verified through prior and post reviews conducted by the Bank. Such reviews would be complemented by Independent Procurement Audits to cover procurement under Components 1 and 2 that would fol low the national regulations. The scope o f the audits i s detailed in Annex 8. As a result o f these reviews or audits, the Bank would declare misprocurement in any misprocured contract funded by the entire pool o f funds, and would have
39 Annex 1 reviews the evaluative literature on PSF.
24
the option o f canceling from i t s loan (or requesting reimbursement of) an amount equivalent to the contract amount multiplied by the Bank’s percentage participation in the pool o f funds.
62. Financial Manapement: The financial management assessment builds on our experience and lessons learned from Phase 1, and from other highly decentralized federal projects in the health sector. Due to several reasons, including staff rotation, failure to maintain a critical mass o f fiduciary staff in the MOH, significant increase on the number participating municipalities (40 to 187), the inclusion o f al l Brazilian states, and the significant expansion o f the use o f statements o f transfers (from 25 percent to 78 percent o f the loan), fiduciary monitoring, as originally planned, became an overwhelming task. For phase 2, however, corrective measures are in place or planned to ensure staff continuity, apply clearly defined monitoring and evaluation measures, strengthen internal control mechanisms (as opposed to almost exclusive reliance on external controls), and include fiduciary performance indicators in the performance-based financing scheme (see Figure 1 and Tables 3.3 and 3.4 o f Annex 3), the team i s confident that the Project will benefit from a better control environment, and the shortcomings noted during Phase 1, mitigated.
63. An agreed action plan will be implemented. The plan will cover items such as the frequency and standardization o f reporting from recipients (states and municipalities) and audit plan (and thereby discontinuing the use o f statements o f transfers, where applicable, two months before closing date); continuous supervision by MOH, remedial actions and jo int quarterly meeting with the MOH’s fiduciary staff. Although project systems and financial management arrangements are satisfactory to the Bank, closer and regular monitoring by the Bank, independent parties and M O H staff, will be fundamental for keeping the positive trend observed over the last year o f implementation o f Phase 1,
4. Social
64. The Family Health program addresses several social development issues. These include:
(i) reduction in inequalities in health outcomes through improving access to and quality o f basic health care by low-income populations. Although in theory a universal program, in practice municipalities focus coverage extension efforts on the poorest districts where access to care is irregular at best;
(ii) strengthening social risk management through providing counseling and health promotion interventions to vulnerable groups such as women, teenagers and homosexuals to address specific issues such as drug abuse, teenage pregnancy, STIs and HIV/AIDs;
(iii) gender equity enhancement through prioritizing maternal and child care. PSF provides a comprehensive package o f reproductive, maternal and other interventions (e.g., special counseling for female AID/HIVs patients) to improve women’s health status. PSF also provides jobs and training that disproportionately favor women who make the vast majority o f health personnel contracted by PSF; and
(iv)civil society strengthening through incorporation o f c iv i l society organizations, community advisory councils, universities and training organizations in the program’s institutional arrangements. Many municipalities hold open community consultations annually to tap community input regarding PSF progress and problems, and seek recommendations regarding priorities for the fol lowing year. These consultations are held
25
for the catchment area o f each PSF unit. Moreover, most community health workers (CHW) are leaders elected by the communities themselves. C H W are effectively community change agents who work to improve the communities beyond health interventions. These include organizing for water and sanitation services, anti-violence campaigns, and community social events. Finally, PSF collaborates significantly with NGOs. The latter are the main vehicles for contracting CHW.
65. Since it i s an on-going program, a number o f participatory evaluations were conducted to gauge PSF performance. The design took into account recommendations emerging from these evaluations, including those from users’ surveys in several cities.
66. The Safeguard on Indigenous Peoples (OD 4.10) i s not triggered for the proposed Project for two reasons. First, the Project targets large cities over 100,000 inhabitants. According to the 2000 Census, only 0.3 percent o f the population i s indigenous in these cities. Nevertheless, since an undetermined number o f this group live in poor neighborhoods o f these cities, and given that PSF targets such areas, urban indigenous will benefit from project-financed activities. Second, one o f the objectives o f the Bank’s Second Disease Surveillance Project (VIGISUS 2) i s to extend family health and basic care services to Indigenous peoples. This Project contains US$40 mi l l ion o f financing for Indigenous health activities.
5. Environment4’
67. The Environmental Assessment (EA) was prepared for the purposes o f identifying potential environmental impacts in compliance with World Bank Safeguard Policy (OP/BP 4.01). The EA focuses on two areas with potential impacts. The f i rst concerns new construction and rehabilitation o f ambulatory health units. The second involves the implementation o f an effective waste management system in these as well as other ambulatory units receiving project financing.
68. PROESF 2 will construct new but small-scale ambulatory un i t s in high density areas o f large urban cities. Building area will range from 100 to 300 m2. Based on a preliminary needs assessment, the M O H estimates that approximately 230 units will be constructed in the 187 participating municipalities. Construction will not take place in protected areas or on ecologically fragile sites. Although al l sites will be located on public lands, the Operational Manual will stipulate that any new construction that may result in resettlement will not be eligible to receive funding.
69. An Environmental Framework (EF) was prepared to guide selection, screening, construction and monitoring o f new health unit construction. It will be incorporated in the Operational Manual. The EF specifies measures by which the Project will mitigate environmental risks, including: (i) an environmental screening and monitoring o f construction sites; (ii) environmental licensing o f al l construction; (iii) environmental supervision o f construction process; (iv) development and implementation o f medical waste training program to
Although originally categorized as “C”, the MOH subsequently requested inclusion of new construction as an 40
eligible activity. In light o f this request, the project team has requested that the project be re-categorized as “B”.
26
improve medical waste management system; and (v) M O H and Bank supervision o f the medical waste management system in family health units.
6. Safeguard policies
Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OP/BP/GP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OP 4.1 1) [I [XI Involuntary Resettlement (OP/BP 4.12) [I [XI Indigenous Peoples (OP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60)* [I [XI Projects on International Waterways (OP/BP/GP 7.50) [I [XI
7. Policy Exceptions and Readiness
70. were implemented during Phase 1 , but comply with Bank policies:
The Project complies with Bank policies. It contains innovative fiduciary features that
(i) Loan proceeds would finance a fixed percent o f the municipal and state subproject pools instead o f a fixed percent o f each transaction there of. Components 1 and 2 would disburse against Customized Statements o f Expenses (e.g., resources which are transferred from the National Health Fund to the health funds o f participating states and municipalities). These are essentially advances which are reconciled annually. (ii) Application o f national rules for the procurement o f small packages o f goods and works, with compliance assessed on an ex post basis.
The Project i s ready for implementation. A draft Procurement Plan for project's Component 3 has been appraised. A revised version for the f i rst 18 months o f project implementation was submitted and cleared during negotiations.
' By supporting the proposedproject, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas.
27
Annex 1: Country and Sector o r Program Background BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
This annex provides background information on Brazil and i t s health sector, the rationale for the Family Health strategy, and impact o f the Family Health Program. In the mid-1990s the Health Ministry (MOH) launched a national policy to extend primary health care (known as basic care in Brazil). This policy resulted in the implementation and expansion o f two large, national primary care programs: the Health Community Agents Program (Programa de Agentes Comunithios de Sadde - PACS), and the Family Health Program (Programa de Sazide da Familia - PSF). These two programs, have changed the landscape o f primary care in Brazil, and contributed significantly to the improvements in health indicators in the last 15 years. Of equal importance, PSF was the main driver o f a financial innovation - the establishment o f an innovative results-based financial mechanism emphasizing payments based on reaching program coverage targets.
Section 1 describes Brazil and i t s health sector. Section 2 reviews the rationale for the Family Health strategy as conceived by the M O H and implemented in most o f the country. Section 3 presents the main features o f the PSF model. Section 4 describes the legal and regulatory framework underlying PSF. The main financing flows regarding PSF are presented in Section 5. The findings from research and evaluative studies on PSF performance and impact are the subject o f Section 6. Section 7 discusses main problems, gaps and outstanding issues regarding the Family Health strategy and i t s implementation. The final section reviews progress and problems in the implementation o f the first phase A P L (PROESF 1).
1. General background and the Unified Health System (SUS)
Brazil i s a middle-income country (GNI per capita was US$3,450 in 2005, or US$8,730 in PPP terms) o f 179 mi l l ion people. The population growth rate has decreased rapidly during the last decades, and i s currently at 1.4 percent. The fertility rate i s just above renewal levels (2.3 children per woman in child-bearing age). This rapid demographic transition results in a relatively young population, but the number o f elderly is increasing, and along with it, the prevalence o f non-communicable diseases (NCDs). NCDs already account for 2/3 o f the country's total burden o f disease (BOD), while chi ld and maternal health and communicable diseases are s t i l l important contributing factors (24 percent o f the BOD), and injuries are on the r ise (10 percent o f BOD).41
Brazi l has historically been characterized by socioeconomic inequalities: the Gini coefficient, at 0.59, i s among the highest in the world, but has decreased slightly in recent years.42 A l i t t l e less than one-fourth o f the population lives below the poverty line, but this pro ortion increases to 48 percent in the Northeast and drops to 9 percent in the Southeast?'Mirroring economic inequalities, health indicators exhibit significant variation both regionally and across income
World Bank: Brazil - Addressing the challenge o f non-communicable diseases in Brazil. Report no. 32576-BR 41
June 28,2005. 42 World Bank: World Development Indicators 2006. 43 World Bank CAS, 2000.
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groups; infant mortality, for instance, varies across municipalities from below 10 per 1,000 live births to 100/1 ,000.
The health o f mothers and children in Brazil has been improving steadily over the last two decades. Between 1987 and 1997, the infant mortality rate (IMR) dropped from 62.4 to 37.5 per 1,000 live births, a reduction o f approximately 5 percent per year44. Both maternal and infant mortality rates are highest in the poorer North and Northeast regions o f Brazil. But most studies point to a decrease in this rate in the last 20 years.
In spite o f recent progress in infant mortality and other health indicators, and a relatively high national expenditure on health, Brazil i s only an average performer when compared to other middle-income countries (Table 1). Maternal and infant mortality and morbidity rates remain higher than what would be expected for a country o f Brazil's income level (World Bank 2002). Official figures for IMR o f 23.6 in 2003 compare Brazil favorably with Peru (33.4) but unfavorably with many other countries in the region including Mexico (19.7), Argentina (16.5) and Chile (7.8).45 A major reason for this i s the concentration o f illness and mortality among the poor in Brazil: a World Bank study showed that infant mortality rates jump 80 to 100 percent from the fourth income quintile to the lowest. The same report concluded that relatively simple primary health care (PHC) interventions that target the urban and rural poor could have a major impact on reducing deaths and illnesses amongst mothers and children (World Bank 2002).
Measles and DPT. Brazil figures for Infant Mortality and Maternal Mortality are from M O H I and lower than the World Bank estimates (32 for IMR and 260 for model estimate o f Maternal Mortality).
The epidemiological transition that the country i s currently undergoing means that deaths and injur ies caused by NCDs will continue to increase in future years. The top three specific causes o f DALYs are perinatal conditions (5.4 percent o f all DALYs in Brazil), diabetes mellitus (4.9 percent) and ischaemic heart disease (4.3 percent).46 With both hypertension and diabetes contributing to the relatively high rates o f heart attack and heart disease, the M O H has included the screening and treatment o f these two diseases within the scope o f PSF.
44 World Bank (2002), Brazil. Maternal and Child Health. " Ministerio da Saude, online (http://portal.saude,gov.br/porta~svs/visualizar~texto.cfm?idtxt=24437). 46 World Bank, 2005, Brazil. Addressing the Challenge of Non-communicable Diseases in Brazil.
29
Poverty has been associated to both l ow access to quality care and poor health in Brazil. Even though the public health system offers universal and free access to all, and health inequalities have been reduced in the last two decades, important inequalities persist. Infant mortality for instance varies from below 10 per thousand in richer municipalities, to over 100 in poor ones. Even within a well-served municipality such as Silo Paulo, where almost everyone lives within 1 hour from a referral public facility, neonatal mortality, which is strongly influenced by the access to and quality o f health care, varies from 3 to 24 /1,000. Other health indicators show similar variation^.^^
Studies have also shown that the poor are more vulnerable to both communicable and non- communicable diseases (World Bank 2005).48 Rates o f hypertension and diabetes are higher amongst people with lower education and lower incomes. L o w birth weight has also been linked to chronic diseases in ad~l thood.~ ’ Finally, i t i s well established that ill-health can push a household more deeply into poverty. This association between poverty and ill-health has contributed to making PSF an important component o f Brazil’s national drive to eradicate poverty.
While the incidence o f poverty i s higher among the rural population, more poor people live in urban areas: a 2001 study indicated that 52.5 percent o f the poor lived in urbdmetropol i tan areas and 47.5 percent in rural areas.50 Another study that used household assets to define poverty found that 56 percent o f people in the lowest two quintiles l ive in urban areas51. O f the urban poor, 38 percent live in large urban (defined as more than 100,000 inhabitants) or metropolitan areas. Because nearly one-third o f al l poor people52 l ive in rural areas o f the Northeast region, many anti-poverty initiatives, including the f i rst phases o f the PSF, have focused on this area. However, there i s increasing recognition o f the need to tailor social sector interventions to meet the needs o f the urban poor, a more heterogeneous and mobile group. While the PSF program has achieved fifty percent coverage in municipalities under 100,000 inhabitants and nearly full coverage in rural areas, coverage lags (30 percent) in large urban municipalities where over 90 mi l l ion people reside. The PROESF extension to the PSF has sought to expand the existing program to meet the healthcare needs o f Brazilians living in larger urban areas.
The SUS System: Established by the 1988 constitution, a social security-like national health system, SUS (Unified Health System - Sistemu Unico de Suzide) provides universal and free health care coverage to al l citizens. Private insurance schemes offer supplementary coverage to about 36 mi l l ion people (who therefore have double coverage). The current SUS system i s the result o f a long, gradual and st i l l ongoing reform process initiated in the early 1980s. The main
47 World Bank 2007, forthcoming. 48 Also, see: Piccini RX, Victora CG 1994, Hipertenslo arterial sistdmica em Area urbana no sul do Brasil: prevaldncia e fatores de risco. Rev sazide phblica. 1994;28(4):261-67. Franco LJ, 1998, Epidemiologia do diabetes mellitus. In: Lessa I, organizadora. 0 adulto brasileiro e as doenqas da modernidade. Slo Paulo-Rio de Janeiro: HUCITEC; ABRASCO. 49 Barker DJP 1998, In utero programming o f chronic disease. Clin Science. 1998; 95:115-128. 50 World Bank 2001: Attacking Brazil’s Poverty.
52 Defined as someone who lives in a household with per capita income less than the equivalent o f R$65 per month at Sao Paulo Metropolitan Area prices.
Gwatkin 2000. On urbadrural poverty (mimeo). 51
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focus o f this reform has been the decentralization o f most responsibilities for providing and managing care to municipal government^.^^ Under the pressure o f changing epidemiological patterns, it also operated a restructuring o f health care provision, gradually moving from a vertical disease-centered program organization toward a more comprehensive and integrated approach. The federal government, through the MOH, is responsible for designing national health policies, which in principle are implemented through negotiated agreements with state and local authorities and through co-financing health care provided by SUS. Brazil possesses a vast network o f facilities, including 7,400 hospitals (471,000 beds), and 58,000 ambulatory and diagnostic facilities. Nearly 2/3 o f the hospitals and over 90 percent o f diagnostic facilities are private. However, most work under contract for SUS; three-fourths o f ambulatory facilities (not including physicians in private practice) are public, mostly run by municipalities. Municipalities are responsible for the organization and provision o f primary care, including extension o f the Family Health approach.
Recent World Bank studies (2004, 2006 and 2007) show that SUS faces significant challenges that limit its effectiveness as a health system; these include:
e
e
e
e
e
e
2.
Demographic and epidemiological transitions, which result in increased demand for expensive, high complexity services, even though lower cost health problems (such as infectious and chi ld diseases) are s t i l l prevalent, particularly in the North and Northeaster regions; Inefficient allocation o f resources, both in the public and private sectors, with a large proportion o f resources allocated to individual, acute, high-complexity care; Expanded coverage guaranteed by the public system without the concomitant increase in funding, resulting in important quality problems and a poor image; Low productive efficiency with evidence o f waste and fraud; Fragmented organization o f health care provision combined with deficient governance arrangements and managerial capacity; Poor planning, budgeting and monitoring capacity at the municipal level; and Shortcomings in input management at subnational levels.
The Family Health Model
The Family Health Program has been MOH’s flagship program since the mid 1990s, and the main strategy for reorienting health care provision and improving health outcomes. It represents a decisive departure from the traditional, vertical, disease-focused, approach to primary care, by emphasizing health promotion and prevention, early detection and treatment. Through its outreach and integrated focus and targeting o f the poor, the Family Health strategy addresses several shortcomings o f the traditional model o f health service provision in Brazil, especially system fragmentation and uncoordinated care. I t also serves as a strategy for reducing health inequalities, by prioritizing small (65 percent coverage in 2004) and low-income (58 percent) municipalities as opposed to larger (27 percent) and high-income (25 percent) municipalities (MOH, 2006, op cit).
Referral services remain in the hands o f federal and state health facilities. Many states, and to a lesser extent the 53
MOH, s t i l l directly manage a subset o f hospitals.
31
The PSF approach consists o f multi- professional teams delivering primary health care interventions to households and communities. In principle, PSF teams are gateways to higher-level services. Each team i s responsible for enrolling a defined number o f families (between 600 and 1,000, with 3,500 individuals on average) within a given catchment area, monitoring their health status, r isks and needs. PSF emphasizes four essential attributes o f primary health care: continuity o f care, integrality, f i rs t point o f access and coordination with the health system. Community participation and
Box 1: Core PSF Services Child health (growth & development, nutrition, immunization, treatment o f prevalent illnesses)
0 Women’s health (pre-natal care, pre-vention o f cervical cancer, family planning) Health promotion activities Oral health (emphasis on ages 0-14)
0 Prevention of, testing and counseling re. H I V Preventions and treatment o f STIs
0 Control o f tuberculosis 0 Elimination o f leprosy 0 Control o f hypertension
Control o f diabetes
ahention focused on the family are also highlighted. While the Community Health Agents Program (PACS) began earlier than PSF (in 1987 in Ceara), and achieved significant coverage earlier, PSF and PACS - though designed as two separate programs - are gradually merging under PSF. Wherever PSF has not yet been implemented, PACS i s considered an intermediate stage to PSF implementation.
The program focuses primarily on maternal and child health and the prevention and early treatment o f a subset o f NCDs such as hypertension and diabetes (Box 1). The health promotion component o f the PSF provides an important opportunity to address the growing challenge o f non-communicable diseases (NCDs) in Brazil. As the program coverage expanded, its scope also extended to include elimination o f leprosy and oral health, as well as the provision o f basic drugs. In addition, teams address risk factors that may be specific to the target-community’s needs (e.g., aerobics for overweight community members). These core activities have been identified as cost-effective interventions in improving child and women’s health, and include 6 o f the 10 “best buys” promoted by the World Bank and WHO.54
A typical PSF team consists o f a doctor (a generalist or family health specialist), a nurse, a nurse auxiliary, and four to six Community Health Agents. An expanded team often includes a dentist, a dental care auxiliary and an oral hygiene technician. All professionals work full-time on PSF activities. Each team i s based in a Family Health Facility. PSF teams have been hired in a variety o f contractual arrangements. A 2002 survey55 indicated that 87 percent o f the PSF professionals were hired by municipalities or other public agencies, and 13 percent were outsourced, usually through non-profit organizations. Civ i l servants accounted for a minority o f the PSF teams (1 7 percent o f the total). Nearly two-thirds were hired through temporary contracts (65 percent), usually by the municipalities, and through private labor law contracts (CLT). To attract skilled professionals and place them in poor areas, the program generally pays significantly higher salaries than to the same professionals hired by the civ i l service and placed in traditional facilities. Consequently, PSF tends to be more costly than the traditional approach.
” Claeson M, Mawji T, Walker C: Investing in the Best Buys: a Review o f the Health, Nutrition and Population Portfolio., FY 1993-99. HNP/World Bank 2000. ’’ Ministerio da SaudeKGPRH, UFMG/NESCON/FM, EPSM: Agentes Institucionais e Modalidades de Contrataqtio de Pessoal no Programa de Saude da Familia no Brasil. Relat6rio de Pesquisa, Belo Horizonte 2002.
32
PSF was first piloted in Ceara and other Northeastern states and drew increasingly strong political backing to the program. It was rapidly adopted by other states, and officially declared national program by the federal government in 1994.56 The program also received significant backing from international actors in Brazil, initially from UNICEF and U N D P and subsequently by the World Bank. PSF has received strong political and policy support from two governments (Fernando Henrique Cardoso, 1994-2002 and Luis Inacio “Lula” da Silva, 2003-2006). This support has paved the way for the PSF to assume and maintain a primary position in the MOH’s policy agenda.
In spite o f the same, nation-wide, framework and regulation, PSF takes on different features and scope in response to local reality. I t i s thus difficult to talk about or assess “one” PSF, because in practice many different adaptations o f the model have been implemented. The size and composition o f the family health team, the contractual arrangement used to hire the team professionals, the scope o f activities carried on by the teams and the approach used to tackle particular diseases or problems, are some o f the characteristics that vary importantly. Some o f this diversity appears in the literature produced by PSF teams. Box 2 provides a few examples.
Box 2: Ten Years o f the PSF - the 2004 Family Health Exhibition In 2004, a poster and essay competition marked 10 years since the PSF was first established in Brazil. Doctors, nurses, municipal managers and more than 1,000 community health agents from all around the country took part in the competition and an accompanying series o f round-table discussions, known as the Mostra Nacional (or National Exhibition) o f the family health program. Winning contributions to the essay competition, which were subsequently published in a book (MS 2006b), show the remarkable diversity o f the program, i ts ability to adapt to local circumstances and i ts rapid embedding into community l i f e over a relatively short period o f time. The winning essays draw on the direct experiences o f staff working within the PSF teams. They include efforts to combat obesity and low levels o f physical exercise in the municipality o f Santa Cruz in Rio Grande do Norte, through the creation o f one-week long community ‘SPAS’, at which community members that had proved hard to reach through traditional dietary and exercise outreach programs, participate in activities ranging from walks and aerobics, to stretching and dancing, accompanied by a healthy diet o f locally available food. Weekly follow ups showed positive results across a range o f indicators including body weight, self-esteem and formation o f ‘solidarity groups’ within the community. A second finalist in the essay competition draws on experiences o f PSF health workers operating in Mauh, a town in Sao Paul0 state with high levels o f poverty and urban crime. To address the fact that very few young people chose to attend the local health clinic, the PSF team launched a program called ‘Health through hip-hop” which used youth opinion-leaders to transfer healthcare and well-being messages about drug abuse, sexuality, violence and self-worth. Over the three years o f the project, youth pregnancy rates dropped slightly, although the program failed to impact on violence.
Source: Ministerio da Saude: I1 Mostra Nacional de ProduqBo em Sadde da Familia - 2004. Brasilia, 2006b.
’‘ Viana, ALd’A, M R Dal Poz 1998.Estudo sobre o process0 de reforma em sazide no Brasil. Informe Final para o Instituto Latinoamericano de Doctrina y Estkdios Sociales/ILADES (mimeo).
33
Coverage: The program coverage expansion (Figure l), was steady and can be separated in four phases: (i) prior to 1994, when PACS was implemented in Ceara and a few other states; (ii) 1994-97, with the expansion o f PACS and initial implementation o f PSF as a separate program; (iii) 1998-2004, with the strengthening o f PSF and the stabilization o f PACS in terms o f coverage; and (v) With the implementation o f SUS Operative Guidelines (NOAS 01/01) in 2002, which consolidated PSF as the key strategy for PHC, expanded i ts core activities and
Figure I: Family Health coverage growth, 1994-2006
120
100 u) .- s - = 80 = .f 60 m 6 40
V 20
0
b
I +PSF -c-PACS]
increased -funding; and the launching o f PROESF in 2003. With PROESF implementation, coverage growth in the period 2003-05 was indeed greater in larger urban areas than in the initial target areas o f the program (Fachini et a1 op-cit). Overall, coverage by PSF and PACS was extended gradually from 55 municipalities (1 percent o f the total, with 10 percent o f the population) in 1994 to 4646 in 2004 (84 percent o f the total, with 54 percent o f the p~pulation).’~ In 2005, coverage by PSF alone reached 42 percent, and PACS covered an additional 13 percent of the population (Table 2).
Because o f PSF’s initial focus on rural and small urban areas, i t s expansion into larger urban areas was delayed, both as a result o f policy priority, and because it needed to be adapted to work successfully in larger urban settings. The focus on larger urban areas results from a wider strategy to expand the program, as well as the growing recognition o f the existence o f large urban poverty and ill-health pockets.
57 Ministerio da Saude 2006. Saude da Familia no Brasil, Uma anklise de indicadores selecionados, 1998-2004. Brasilia.
34
3. Regulatory and Institutional Framework
In SUS, municipalities are responsible for the organization and delivery o f primary care. However, PSF is not mandatory. A municipal government can decide whether to adapt the program. If it chooses to participate, it must f i rs t submit a proposal to the Municipal Health Council and discuss the matter with beneficiary communities. To initiate PSF and qualify to receive federal funding, a municipality must comply with minimum “qualifying” requirements, including an implementation plan, recruitment policies and beneficiary mapping.
Table 1.1 presents an overview o f legislation relevant to PHC. Major changes were introduced recently, with the enactment o f intergovernmental “health covenants” (Pactos de Sazide) and the consolidation o f the nearly 100 distinct payment mechanisms into 5 transfer blocks. One such block grant merges al l heretofore separate grants for primary care, include PSF, basic care, PACS and disease surveillance. Also, recently, the M O H consolidated and streamlined al l basic care and family health regulations into a single reg~lat ion.~ ’
An important feature o f the PSF strategy - which i s common to SUS as a whole - i s the notion o f shared responsibility between the different levels o f government (Table 3). In many areas PSF contributed to structuring the new municipal systems. In fact, PSF expansion was a testing ground for definition o f inter-governmental roles in SUS. The M O H designs the framework and principles o f the program together with supporting policies and priorities. The M O H also played a key role in stimulating municipal adaptation and subsequent expansion o f PSF through crafting an incentive-based financing system (Section 4). At the onset, several state secretariats o f health played a critical role in the early adoption and dissemination o f PSF. For example, the State Secretariat o f SZo Paulo pioneered the implementation o f the program in Silo Paul0 City, transferring PSF activities to the SZo Paulo municipal government only in 2002. More recently, eight state governments have created financial schemes to support municipal expansion o f PSF. As the PSF expanded, municipality’s contributions to PSF financing increased significantly, in part because federal transfers were not sufficient to cover the program costs,60 and because o f the high political visibility and public acceptance o f the program.
As Machado (2005, note 288) points out, official figures from the Ministry o f Health are likely to overestimate the number o f teams working on the program and total coverage, because counting i s based on proposals submitted by municipalities to the Ministry to play host to a PSF team, not all o f which are subsequently followed up. 59 Portaria no. 6-48, March 28, 2006; Ministerio da Saude/SAB/DAB: Politica Nacional de Atenglo Bksica. Serie Pactos pela Saude 2006, Vol4. Brasilia, 2006.
Federal transfers were never meant to cover the full cost o f PSF. Rather, the idea was to provide an incentive to stimulate municipal buy-in and coverage expansion. This strategy has for the most part been successful (Section 5). 60
35
Table 3: Roles of I:
PHC in the municipality. 0 Contract PHC interventions.
Maintain the network o f PHC units (management and administration). Co-finance PHC activities. Provide data for the information system (SIAB). Evaluate performance o f PHC. Management o f PSF teams. Provision o f non-personnel input to PSF teams, such as facilities and medical equipment.
0 Define and make arrangements for referral systems for the PSF.
Source: MOH
Federal
guidelines and norms for PHC Co-finance PHC system Organize human resource training Establish mechanisms for the control, regulation and evaluation o f PHC Maintain a national database on PHC interventions (SIAB).
0 Draw up policy
'ferent Levels o f Government in th State
Support establishment and delivery o f PHC activities in the State, through supervision and training. Coordinate the implementation o f human resource policies.
0 Co-finance PHC activities. 0 Provide additional inputs such
as medical equipment, pharmaceuticals and training for municipals PSF teams. Provide support to evaluation o f PHC interventions.
Management o f Primary Care Municiaal
4. Financing and Spending
Brazilian national health expenditure for 2004 was approximately R$147 bi l l ion (or US$50 bi l l ion at the current exchange rate61), o f which 62 percent were for health services and 18 percent for out-of-pocket expenditure on drugs and other medical goods62. Both in absolute and relative terms, the country's spending on health i s higher than in most middle-income-countries. For example, in recent years total national spending on health has oscillated between 8 and 8.5 percent o f GDP, which i s a relatively high proportion when compared to international averages. I t i s higher than for most middle- income countries and close to the OECD average. The proportion o f public spending, however, at 48 percent o f national expenditure in 2004 (Figure 2), i s lower than for most middle- and high-income countries. Overall, the federal
Figure 2: Distribution of National Health Expenditure - 2004
Out-of- Pocket m r ,,",
Corp self- insured 6,7% L
Insurance
Federal 26,5%
7.2%
government contributed to 55 percent o f public expenditure on health, compared to approximately 70 percent in the 1980s. Municipalities, and to lesser extent, states, have filled the funding gap, financing a growing proportion o f the total spending.
As previously mentioned, a contributing factor in PSF expansion and performance as a PHC strategy was the design o f innovative financing mechanisms. The f i rs t mechanism, established in 1996 (NOB 01/96) involved the establishment o f fixed per capita federal transfer to state and
For the year 2002, to which most o f the data refer, the mean exchange rate was R$2.92 per US$, about the same
Couttolenc et al: Em Busca da Excelencia: Fortalecendo o Desempenho Hospitalar no Brasil: Estudo Sobre Gasto
61
rate as for 2004.
Hospitalar N o Brasil. The World Bank and Ministerio da Saude, 2005.
62
36
municipal governments (known as P A B - Piso de Aten@o Basica or Basic Care flat fee), set at R$10 per person covered per year. A second mechanism, embedded in the PAB financial envelope, involved incentives for municipalities to expand the PSF and PACS programs. This involved a variable payment, known as PAB varidvel, which varies according to population coverage for both programs.63 This funding mechanism, partially linked to performance (e.g., coverage), represented a key advance in increasing funding for primary health care.64
Federal funding contributed to the growth o f PSF and PHC in general. Table 4 shows that federal spending on PHC, as a percentage o f overall M O H expenditure, rose from 10.5 percent in 1995 to 17.3 percent in 2002 (Machado, 2002). As a proportion o f al l M O H transfers to states and municipalities, PHC increased from 16 percent to 28 percent. In fact, much o f this increase represents the growing support for Family Health. In comparison, fixed per capita component o f the P A B barely rose at al l over the same period.
As o f 2005, ten state health secretariats had established grant-based incentives for PSF, based on different criteria: some allocated funds only to the poorest municipalities, while others directed financing to the universe o f municipalities to increase coverage statewide (Dain 2005, op cit). In nearly al l cases, the financing mechanisms involved grant transfers similar to the federal P A B mechanisms.
Finally, research shows that municipal financing (from own revenues) constitute a varying but often important proportion o f PSF funding. For example, based on a sample o f 5 municipalities, one spent less than the amount received from the M O H while the remaining 4 spent between 170 and 800 percent o f the federal t ran~fer .~ ' Another study o f eight municipalities in the state of Amazonas showed that municipal contributions to health expenditure in 2002 ranged from 21 percent to 60 percent o f the federal transfer (Dain 2005, op cit). Current information systems do not perform systematic analysis and comparison o f municipal contributions to PSF.
63 For each new PSF team the municipality received a flat payment o f R$10,000, while for each community health agent, it received R$2,200 per year; payment for PSF increased from R$28,000 to R$54,000 per team per year on a ' Prior to the PAB, PHC had no specific funding source. 65 World Bank: Brazil - More efficiency for better quality: Resource management in Brazil's Unified Health System (SUS). Upcoming, Report no 36601-BR.
raded scale depending on program coverage.
37
5. Performance and Impact of PSF
A number o f studies have sought to assess the impact o f the PSF on mortality, morbidity and user satisfaction. Available data indicate that health indicators have improved throughout the country in the period since the implementation o f the family health strategy; however, it i s difficult to isolate the effects o f an intervention as complex as the PSF, when other determinants o f health such as sanitation and nutrition have also improved. M O H data point to an overall improvement o f health indicators in areas covered by the PSF since 1999, while studies that control for other variables have shown the Program to have a positive impact on infant mortality. Studies comparing PSF with traditional p rov ided6 also show PSF i s a higher performer in terms o f user satisfaction. Further, the PSF model has been shown to be more effective in preventing and treating non-communicable diseases.67 The section summarizes the major results o f research and evaluative studies.
Maternal and child health indicators have improved steadily in municipalities between 1999 and 2004, a period o f rapid PSF expansion. Table 5 shows, for example, important improvements in reducing childhood malnutrition, diarrhea- and ARI-related mortality, and an increase in the proportion o f women who are accompanied by Community Health Agents during pregnancy. While these figures do not control for the effects o f other factors including increases in government transfers through other social programs, they indicate an overall improvement in chi ld and maternal health in PSF areas over the last decade.
by CHAs at facilities in PSF areas. Source: MOH (in http://dtr2004.saude.~ov.br/dab/atencaobasica.~h~#historico)
A recent M O H study looked at the change in selected health indicators in municipalities according to the level o f PSF coverage6* (Table 6). Nearly al l the indicators analyzed showed improvement between 1998 and 2004. However, improvement was markedly greater in municipalities with high PSF coverage than in areas with l o w PSF coverage. Moreover, the study found that municipalities with high PSF coverage were almost always poorer with lower than average socioeconomic indicators (as measured by the municipal Human Development Index)
66 This model i s passive, curative and facility-based. See for example: Tomasi, E, LA Facchini, A Osorio, A G Fassa, 2003, 'Aplicativo para sistematizar informaqaes
no planejamento de aq6es de saude publica' in Revista de Sazide Pziblica, 37 (6): 800 - 806. Mendes Ribeiro, J, NdeR Costa, LFdaS Pinto, PLB Silva, 2004, AtenGBo ao prC-natal na percepqgo das usuarias do Sistema Unico de Saude: um estudo comparativo, in Cad. Sazide Pziblica, 20(2):534-545, 2004. Conill, EM, 2002, 'Politicas de atenqlo primaria e reformas sanitarias: discutindo a avaliaqlo a partir da analise do Programa Sadde da Familia em Florianopolis, Santa Catarina, Brasil, 1994-2000' in Cadernos de Sazide Pziblica, 18 Suppl: 191 - 202. 68 Ministerio da Saude, 2006 (op cit); coverage strata were defined as less than 20 percent (low coverage), 20-49 percent, 50-69 percent, and 70 percent and over (high coverage).
67
38
and health indicators than those with l o w PSF coverage. This represents strong evidence that the initial PSF priority focus on poor and remote areas has contributed to the reduction o f health inequalities.
coverage Infant Mortality Rate (/1,000 live births)
Post-neonatal infant mortality (deaths 28d-lyr/1,000 live births)
High 24.6 23.3 23.7 21.5 21.2 20.8 Na Low 20.4 19.3 19.2 18.2 17.5 17.5 Na High 12.3 10.2 9.9 8.4 8.2 8.1 Na L~~ 7.3 6.5 6.6 6.1 5.7 5.9 Na
% infant deaths from ill-defined causes
High 22.3 20.1 18.7 15.6 13.5 10.9 Na Low 6.6 7.1 9.1 6.9 6.3 5.9 Na
% o f municipalities with >95% tetravalent vaccine coverage
% births from mothers with no prenatal visit during pregnancy
Studies that controlled for intervening variables also found PSF to impact health. Research using state-based panel data (1990-2002) to assess the impact o f the PSF on infant mortality (IMR) showed the Program to contribute to lower IMR after controlling for other factors (such as access to water supply and sanitation, average income per capita, women’s literacy and fertility, and numbers o f health professionals and hospital beds per capita). An increase in PSF coverage by 10 percent was associated with a 4.5 percent decrease in IMR, after controlling for other health determinants6’. The authors point to the inverse relationship between PSF coverage and diarrhea deaths as the single most important contributor towards achieving lower IMR. Other variables, including clean water, hospital beds, women’s literacy and fertility and income levels also contributed to lower IMR, but to a lesser degree.70
High 39.5 42.2 49.3 65.4 69.8 64.2 Na Low 43.1 41.6 50.9 61.5 59.0 54.9 Na High 8.5 6.8 5.9 5.0 3.7 3.0 Na Low 4.9 4.4 4.1 4.0 3.6 3.2 Na
Other comparative studies show that populations served by the PSF report better overall health and higher levels o f satisfaction with primary care services than those served by the traditional model o f PHC. A study in the city o f Port0 Alegre found that mothers were more l ikely to report that their baby’s health was excellent or very good (with an odds ratio [ORIof 1.65) and provided
% teenage pregnancies (< 20 years old)
69 In addition to the determinants listed above, the authors also controlled for immunization coverage and tested for interactions between the PSF and proportionate mortality from diarrhea and acute respiratory infections. ’O Macinko J, FC Guanais, MdeFM de Souza 2006, An Evaluation of the Impact of the Family Health Program on Infant Mortality in Brazil, 1990-2002. New York University, pending publication.
High 24.8 24.9 25.5 25.2 24.7 24.4 Na Low 21.9 21.7 21.8 21.7 21.0 20.4 Na
39
Hospitalization rate (/lO,OOO) from stroke among aged 40 and + Hospitalization rate (/10,000) from congestive cardiac insufficiency
i ron sulfate (to prevent anemia; OR 2.16) and vitamin supplements (OR 1.78) during the f i rs t year o f life. Facility users also reported greater satisfaction in relation to the general service received (OR 5.13), waiting times and friendliness o f staff. The study also found that the PSF services provided better health information to the family and the community.71
A second comparative study o f PHC facilities in 41 municipalities in the South and Northeast regions o f Brazi l came to similar conclusions using qualitative methods (Facchini et al. 2006, op.cit). The PSF facilities outperformed the traditional PHC facilities in measures related to the supply o f services, healthcare resources and utilization, as reported by users and staff at the facilities. The PSF facilities also outperformed the traditional facilities for prevention and treatment o f non-communicable diseases. Staff at the PSF un i t s in both regions was more likely to recommend physical activity to adults and the elderly; while the diagnosis o f hypertension amongst the elderly was more accurate at the PSF facilities. Adult and elderly patients in both the Northeast and South were much more likely to have attended the health clinic for a consultation related to hypertension if they l ived in an area covered by the PSF than those who did not: 50 percent o f adults and elderly in the South and 53 percent in the Northeast reported attending a medical consultation related to hypertension in the last six months, while the respective proportions dropped to 37 percent and 35 percent in the non-PSF municipalities. Similar results were obtained for diabetes and oral health.72
6. Program gaps and challenges
Although available data indicate a positive impact o f PSF on health status in target areas, the program faces a number o f challenges: (i) quality and effectiveness o f care, mostly associated with the lack o f clinical guidelines, (ii) insertion and role o f PSF in the larger health system, with ineffective referral mechanisms, (iii) high staff turnover, (iv) lack o f reliable cost information, and (v) rol l ing out the successful experiences. We f i rst turn to quality and effectiveness
Fachini et al. (2006) found no difference in performance between PSF facilities and traditional units when assessing tetanus vaccines provided to pre-natal women: in 24 percent o f cases, health staff had failed to administer the vaccine, and in a further 60 percent o f cases, pregnant women had received the treatment in excess (Facchini et ai. 2006, op.cit). In addition, while PSF provides a greater degree o f coordinated care, measures to prevent and treat non-communicable diseases are s t i l l in their infancy. A World Bank study o n NCDs in Brazil (World Bank 2005) found shortcomings in PSF related to guidelines for screening such illnesses as well as interventions to promote healthier lifestyles. Although the detection and treatment o f hypertension and diabetes are emphasized, there are no other initiatives for N C D screening in the program. In general, health promotion activities within PSF are also not well-developed or standardized. However, these deficiencies were also found in traditional facilities.
71 Harzheim E 2004, Evaluaci6n de la atenci6n a la salud infantil del Programa Saude da Familia en la regi6n sur de Port0 Alegre, Brasil, PhD Thesis, Universidad de Alicante, 2004. 72 A study sponsored by the Pan-American Health Organization, that included interviews with users, health professionals and municipality staff reported on better performance by the PSF, in comparison with the traditional model, in the following areas: access, personnel, coordination, professional training and management. See Almeida C and Macinko J: Desenvolvimento de Sistemas e Serviqos de Saude - Validaqgo de uma metodologia de avaliaq8o rhpida das caracteristicas organizacionais e do desempenho dos serviqos de atenqgo bhsica do Sistema Unico de Saude (SUS) em nivel local. OPASMS, Brasilia 2006.
40
Linkages between PSF and the broader health delivery system remain fragile at best. In principle, PSF should serve as the system’s entry point and gatekeeper, yet referral mechanisms between PSF providers and higher level facilities appear ineffective in most municipalities. Without effective referral systems, some observers have said that PSF runs the risk o f becoming a provider o f simple and low-cost care to low-income populations, thus running contrary to SUS principles o f universality and equity o f access (Machado 2005, op.cit). The Ministry o f Health i t se l f has recognized the need to establish network-like linkages across PSF and PHC and with higher level providers to facilitate the deployment o f staff and managerial oversight (MOH 2006).
High turnover o f staff continues to plague PSF. One reason i s the already mentioned hiring mechanism: nearly 2/3 o f PSF staff i s hired through temporary contracts. A second reason i s the challenge o f finding staff willing to work outside o f the metropolitan areas or in often hard to reach, remote or high-crime areas. A third factor i s the low status family health medicine enjoys compared to other medical specialties. For example, focus groups have shown that family health physicians are often considered “second-class” by their peers. Further, unlike pediatrics, gynecology and internal medicine, a family health physician has few opportunities for employment in the private sector (to complement his salary) because o f the weak demand for the specialty. These issues have implications for program continuity and relationship-building between professionals and the communities they serve.
A recurring. issue in comparisons between the traditional and PSF models i s relative costs. Although the few existing studies on the cost o f providing PHC in Brazi l suffer from non- representative sampling and non-standardized rnethodologie~~~, existing evidence suggests that the PSF model i s generally more costly than the traditional, facility-based one. The cost o f a medical consultation in PSF areas has been shown to be 10-25 percent higher than in non-PSF areas. 74 Higher salaries to retain personnel in target areas, the need to train health professionals for the new model, a more comprehensive set o f services including many outreach activities, may contribute to higher costs. However, the lack o f reliable cost information on both models, and the better results achieved by PSF prevent final conclusions on the cost issue and indicate the need for more systematic research.
A broader issue i s the weak capacity o f most municipalities for measuring, monitoring and evaluating PSF resource use (including costs) and results. Because o f inadequate budget item classification, it i s difficult to identify human and other resources spent on PSF by municipal governments. Even though the M O H has designed a stronger M&E system for PSF than exists for other programs or types o f care, i t s implementation, reliability and use are weak. M&E procedures tend to be irregular and unstructured, usually entailing site visits or bureaucratic procedures that arise after complaints from the public or media, or in order to resolve SUS financing issues (Facchini et al. 2006a). The same study found that the heavy workload o f day-
Some studies estimated the cost o f a PSF team, others the cost per person enrolled, others the cost o f services provided; these different approaches, and the distinct organization o f health care provision in the two models, prevent any definitive conclusion regarding comparative costs. 74 Costa NR and Chorny AH (eds): Custo E AvaliaqBo De Impact0 Da ImplantaqBo Da Parte Fixa Do Piso De AtenqBo BAsica - PAB. ENSPTEC, Junho 2002. Santana EM (coord): AvaliaqBo Econdmica do Programa de Saude da Familia (PSF) em municipios do estado da Bahia: Um estudo de custos. UFBA/ISC/PECS, 2003.
73
41
to-day activities meant that PSF teams rarely used or updated reports as the basis o f future decision-making.
PROESF 1 also achieved significant compliance with performance indicators despite the substantial expansion o f participating municipalities. O f the 188 participating municipalities, about 70 percent
investments included in signed “expansion and conversion” agreement^.^^ This group also has
signed agreements. Thirty-five municipalities received
completed implementation o f activities and
complied with performance indicators specified in the
The political visibility o f the new family health model, and the resulting political backing and financial support it has received, along with the early success o f PACS, have contributed to make the family health approach a success story. But it also raises the question o f the replicability and sustainability in a less favorable context. The differences in staff remuneration and overall funding between PSF and the traditional model have given r ise to conflicts between the two models (Machado 2005, op.cit). Furthermore, municipalities need to confront the challenge o f converting the traditional primary care units to the family health approach, and fully integrate PSF into the greater health system.
Table 7: Expansion o f the PSF by Size o f Municipality 2002 - 2005
No. o f inhabitants Growth in Coverage (%, Dec.02 - Sept.05)
to 9,999 23
20,000 - 99,999 41 100,000 - 499,999 46 5 0 0 ~ ~ 0 ~ Or more 43
lo,&o - 19,999 35
Source: Fachini et al, 200676
7. PROESF 1: Performance and Problems
PROESF 1,75 the f i rs t A P L phase, consisted o f three objectives: (i) increase coverage o f PSF services in urban centers with populations o f 100,000 or greater; (ii) improve the quality o f family health service provision through developing and strengthening ins-service and pre-service training o f human resources in the PSF model; and (iii) improve the performance and effectiveness o f basic health care services through strengthening monitoring and evaluation, information management and quality assessment systems. A separate component corresponded to each objective.
l5 PROESF i s an acronym for Projeto de Expansfio e Consolidap7o do Satide da Familia or Project for the Expansion and Consolidation o f Family Healthcare. 76 Fachini LA et al. 2006, Desempenho do PSF no Sul e no Nordeste do Brasil: AvaliaqZo Institucional e E idemioldgica da Atenqfio Bdsica d Satide, Universidade de Pelotas. 7PIn contrast, only one municipality did not execute the agreements, and the M O H sought and received reimbursement.
42
personnel and infrastructure Twelve municipalities also received national recognition for superior performance during a high-profile ceremony in Brasilia in mid-2006. PROESF 1 also financed the conversion o f about 2,400 traditional facilities in to PSF health units.79 For the universe o f 187 participating municipalities who implemented the agreements, Table 8 displays their average performance on performance indicators specified in project design. O f the 14 indicators, the municipalities on average complied with 10 and nearly complied with the remainder.80
These include: (i) fill cadre o f personnel for a l l PSF teams, (ii) evidence that a l l team members work contracted hours (40 hours per weeks); (iii) units contain fill stock o f equipment specified by for PSF norms, and (iv) infrastructure i s sufficient for teams to carry out functions and services. Compliance with norms was assessed through f ield visits.
78
1,300 units remain unconverted. It i s worth repeating that most o f the indicators were defined with only 40 municipalities in mind. The fact that
79
80
nearly a l l were achieved for 187 i s a significant achievement,
43
fiom PSF catchment’s areas I thousand I I Exceeded 12. Percentage o f families enrolled in PSF I >or=8O% I 93% information system (SIAB) fiom PSF catchment’s areas 13. % pregnant women attended o f PSF teams
Exceeded
receive tetanus vaccine 14. DPT vaccination coverage o f children under 1 in PAD catchment areas
Based on 187 municipalities that implemented the coverage extension and conversion plans. Target varied fiom 5 to 25 percent depending on municipal population size. Importantly, the baseline indicator at
Target varied according to municipal population size.
81
82
roject onset was 28 percent.
100% 95% Nearly
100% 95 Nearly
44
The M O H performed a comparative assessment o f two groups o f matched urban municipalities: 10 municipalities with PROESF and 10 without. The group o f municipalities which participated in the Project displayed markedly better performance in terms o f expanding PSF coverage, increasing pre-natal care, and slightly better performance in reducing hospital admissions for acute respiratory illness (ARI) and diarrhea. The results are displayed in Table 9. Moreover, eight (of ten) PROESF municipalities registered PSF coverage gains compared to only four (of ten) non-participants. Similarly, nine
INDICATOR PSF population coverage Mothers which had 7 or
PROESF Non-PROESF (% change) (% change)
3.2 - 0.2
more prenatal visits as % I I I o f live births 6.6 <1
AN as-% total <5 1 -6,3 1 I::: 1 admissions <5 hospital admissions for diarrhea as % o f total admissions -3.5
PROESF municipalities registered gains in pre-natal care compared to five o f their non-PROESF counterparts. In sum, the data demonstrate project impact on access to and utilization o f basic care services.
PROESF has been a pioneer in improving overall system governance by specifying performance targets, linking performance to financing, strengthening monitoring and promoting systematic evaluation. Specific achievements and outputs include:
Federal transfer mechanism linking financing to performance in support o f PSF was established for participating municipalities; Performance-based management system based on contracts developed and tested. Based on accreditation methodologies, development and testing o f standards-based instrument to assess the quality o f PSF teams. Design and collection o f baseline data in 23 1 municipalities including control groups where PSF has yet to be implemented. Development and application o f instruments to assess implementation, management and fiduciary problems o f participating municipalities. Creating o f a grant transfers to states to strengthen capacity to monitor and evaluate PSF at the municipal level. Evaluation o f 15 PSF training centers. Monitoring and evaluation system for the Maternal-Child Health (MCH) referral / counter- referral network was approved, developed and tested in a sample o f municipalities; Financing o f 84 research and evaluation studies, including 18 master theses and 18 doctoral dissertations.
PROESF suffered a series o f operational set backs that delayed start-up, compromised implementation, and resulted in an extension request. Although the original Program design called for supporting 40 municipalities in APL Phase 1 and 60 additional municipalities in A P L Phase 2, the Government decided to expand coverage to the universe o f 250 large, urban
45
m ~ n i c i p a l i t i e s . ~ ~ This taxed M O H implementation capacities in part because monitoring systems and technical assistance arrangements were not in place to fol low such a large number o f municipalities. The Government’s decision also resulted in the inclusion o f municipalities with very weak technical and fiduciary capacity requiring considerable M O H assistance to plan and implement proj ect-financed interventions. However, broader Government human resource policy resulted in the lost o f seasoned and skilled technical and fiduciary staff within the M O H ? Taken together, these elements undermined the capacity o f the M O H to provide technical and fiduciary support. MOH human resource policy to regionalize training failed to address the PSF training needs o f the municipalities.86
In 2006 the MOH conducted an assessment o f municipal technical, managerial and fiduciary performance based on an in-depth survey and cluster analysis. 87 Municipalities were rated and categorized according to r isks along four dimensions: compliance with 12 performance indicators, overall managerial performance (use o f PSF norms, epidemiological data for planning, participation o f local c iv i l society councils), acquisitions and financial management.88 As shown in Table 10, the results demonstrated that the vast majority o f municipalities receive very good (A) or good (B) ratings for performance in technical, acquisitions and financial management areas. PSF management appears to lag, with over ha l f receiving fair or poor ratings. Only 17 (9 percent) and 26 (14 percent) received l o w marks in acquisitions and financial management. The Project will develop a capacity-building plan for municipalities receiving l o w ratings (C and D).
84 However, only 188 participated in PROESF 1. There exists considerable demand from most large urban municipalities to participate in PROESF 2 in part because the project represents additional funds beyond regular MOH grant transfers. Demand i s also high for technical and fiduciary assistance provided by the Project. 85 The Government replaced seasoned long-term consultants with recently-hired, inexperienced civil servants. 86 An amendment to the loan agreement eliminated Bank financing of training activities. All training was financed with counterpart funds. 87 A new capacity assessment will be conducted by the MOH once the new elected Mayors assume the municipal administrations in 2009.
The study was based on data collected through field visits and interviews with stakeholders (106 municipalities visited), and self-assessment questionnaires (82 municipalities). According to the results, each municipality was rated on the four different criteria and classified by four performance levels (A, B, C and D). The MOH i s currently (November 2006) updating this assessment, conducting site visits to the 82 municipalities that were not visited during the first round.
46
47
Law 8080
Decree 1232
NOB 1/96
PRT/GM/MS 1.660
PRT/GM/MS 3.395
PRT/GM/MS 750
Appendix 1.1: Key legislation regarding PHC and PSF
19/07/90 Defines the structure and principles o f SUS and regulates 3s organization, financing and functioning, government responsibilities
28/12/90 Defines SUS mechanisms for social participation 25/03/94 Creates specific funding mechanisms for PACS and PSF 30/08/94 Defines the modalities o f federal transfers to states and municipalities 05/11/96 SUS Basic Operational Guideline - Regulates SUS organization and
48
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Operations Health Status Priorities Addressed
VIGISUS 2 and metropolitan areas -Targeted interventions for minority populations (SWAP) -Targeted strategies to address behavioral risks
-Use of surveillance data for decision-making Minority Health
Amazonas Regional Communicable diseases -Effective surveillance systems
Development
Women’s and Child Health -Quality improvement initiatives for basic care
-Alternative organizational and managerial practices in hospitals -Effective referral and case management systems
Hospital Performance (2004-07)
Women’s and Child Health Communicable and non- communicable diseases
-Cost containment through improved allocative and productive efficiency -Alternative organizational and managerial practices in hospitals -Resubbased management for medium and hi& complexity care
Impact Evaluations Family Health -Svstematic M&E (2004-2007) Indigenous Health -Resubbased management tools for basic care
Governance in SUS: Quality o f Public Expenditures in
Health
Women’s and Child Health Non-communicable diseases
- Cost containment through improved allocative and productive efficiency
(HD-PREM) 2004-2006
49
I
I /
I I
0 v,
a s g w
0 0 0
b 0
k o 0 0
0 0
C
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e
E 8
c,
E C 3
Y
c1
5 LI 0 3 a
-
7-
+
.. n a
0 z z v,
0 0 0
0 0 0
Coverage and Effectiveness 1. Increase in per capita medical visits PSF teams 2. Increase in population coverage 3. Infants <1 with complete vaccination regimen (DPT-H, polio, measles, tuberculosis) 4. Pregnant mothers with 7 or more pre-natal consultations 5. % patients referred from Family Health teams for specialized care over total number of PSF medical consultations
Efficiency 6. % reduction of hospital admissions for stroke 7. % reduction o f hospital admissions for children <5 for acute respiratory infections (AN)
No. o f municipal supervisors Supervision plan (objectives, schedule, checklist)
Detailed budgets with sufficient definition of activities to enable facile monitoring and verification of performance PROESF i s included in sufficient detail in municipal budget Periodic physical inventories of infrastructure and goods are conducted, and then reconciled with purchases. Any differences should be identified. Internal (municipal) auditing department i s functioning Municipality conducts annual audit o f procurement processes
12. Financial management: account for at least 80% o f expenditures
ElectiveA3onus 1ndicato1-s~~ A .Quality evaluation instrument for ESFs (AMQ: Parts 4 and 5)
m
.
.
.
% ESFs that applied instrument and were ranked by level (A-E) according to standard % ESFs that improved ranking by at least one level
Municipality applied instrument and was ranked by level (A-E) according to standard Municipality improved ranking by at least one level
B. Quality evaluation instrument for PSF management (AMQ: Parts 1 and 2)
C. % o f ESFs with signed performance contracts with municipality, specifying objectives and performance targets *Variable means that target wi l l be set according baseline data specific to each municipality.
Yes/No Yes/No
Yes/No Yes/No Y es/No
<ao% 8 149% go%>
Variable Variable
Variable Variable
Variable
'* Municipalities achieving these indicators can earn an additional percent o f financing.
2. Monitoring and evaluation plans implemented and evaluated, including: (i) the establishment o f an M&E unit within State Health Secretariats; (ii) definition of performance indicators; (iii) definition and collection o f baseline data for monitoring system; and (iv) documentation of analysis of data derived from monitoring system
3. % of municipalities with 400 ,000 population with signed agreements specifying at least 10 ABPSF performance indicators
Training 4. % municipalities with 400 ,000 with PSF/AB management teams trained in management, organization, M&E and supervision
Detailed budgets with sufficient definition o f activities to enable facile monitoring and verification of performance PROESF i s included in sufficient detail in state budget Periodic physical inventories o f infrastructure and goods are conducted, and then reconciled with purchases. Any differences should be identified. Internal (state) auditing department i s functioning State conducts annual audit o f procurement processes
6. Financial management: Account for at least 80% o f expenditures
M&E 1. In-depth M&E readiness assessment completed identifying problems and needs related to: (i) demand for M&E; (ii) roles and responsibilities o f units involved in M&E; (iii) training, technical assistance and information technology requirements; (iv) barriers to M&E systems; and (v) financing for M&E
Plan prepared; Unit established;
Baseline data collected and
analyzed
25%
Variable
Yes/No YesfNo
Y e s N o Yes/No Yes/No
<8O% 8 1-89% 90%>
Targeta
Assessment report
completed
Elective/Bonus Indicatorsg3 A .Quality evaluation instrument for ESFs (AMQ: Parts 4 and 5) .
.
. % ESFs in % of municipalities with < 100,000 population that applied instrument and were ranked by level (A-E) according to standard % ESFs that improved ranking by at least one level
B. For evaluation instrument for PSF management (AMQ: Parts 1 and 2) % of municipalities with 4 00,000 that applied instrument and were ranked by level (A-E) according to standard . . Municipality improved rankingby at least one level
'Variable means that target wil l be set according baseline data specific to each municipality.
Variable Variable
Variable Variable
93 Municipalities achieving these indicators can earn an additional percent o f financing.
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Table. 3.5: Eligibility Criteria for Municipal and State Participation in APL Phase 2 a a
a
e a
a a -
Comply with fiduciary obligations (only for participating municipalities in APL phase 1). Maintain or increase the number of PSF teams since 2003 (only for participating municipalities in APL phase 1). Present investment plan by deadline. Present revised investment plan addressing recommended modifications (by deadline). Have appointed an ABPSF coordinator. Have appointed technician responsible for project coordination. Have sent representatives to project launch and training workshops.
~~~
Table 3.6: Exclusion Criteria for Municipal and State Participation in APL Phase 3 Evidence of irregular use o f project funds, including: (i) failure to furnish statement of expenses related to funds transferred by the Federal Government; (ii) use o f funds, goods and other public resources not for the intended purposes; (iii) illegal, non legitimate, or non economic practices that lead to loss of public funds;. (iv) non approval o f statement o f expenses due to partial execution of agreed activities or partial achievement of agreed objectives; (v) expenses not approved; and (vi) non- compliance in project implementation as determined by a governmental controllaudit authority. Non-execution of 30% or less o f project financing 12 months after receiving financing. Non-execution of 60% or less o f project financing 2 1 months after receiving financing.
A r r a n g e m e n t s f o r Resul ts M o n i t o r i n g
A monitoring system and impact evaluation will assess performance o f the proposed Project (and broader A P L program). The monitoring system, complemented by the collection o f baseline and ex-post data for the impact evaluation, will contribute to determining whether the Project achieved the desired outcomes and outputs as specified in the Results Framework. The monitoring and evaluation (M&E) system will assist Government to monitor, assess and improve how project (PROESF 2) and program (PSF) resources are managed. Consonant with the project objectives the central idea o f the M&E system supported by the Project i s to focus on achieving outcomes and outputs rather than simply aligning annual plans, resources, tasks, activities and services. Although implementation monitoring will be part o f the M&E system, the system will also aim to systematically collect performance information that l i n k s resources to performance targets. Table 3 below presents a framework for the monitoring systems and impact evaluation. The M&E system will collect, analyze, and act upon six sets o f data:
1.
2.
3.
PROESF 2 performance indicators included in federal-municipal agreements (see Tables 2 and 3 above). These include indicators on coverage, efficiency, quality and institutional capacity. Compliance with these indicators will determine level o f financing according to the scheme illustrated in Figure 1. PSF performance indicators not included in federal-municipal agreements. These consist o f a large and broader set o f Program indicators used by the M O H to monitor primary care in general. Process-oriented “institutional/managerial” capacity performance indicators not included in federal-municipal agreement (e.g., existence o f PSF coordinating unit, up-to-date. enrollment o f families by PSF teams, management contracts signed with PSF teams, etc.).
57
These indicators focus on strengthening municipal governance and management o f primary care services,
4. Fiduciary indicators (e.g., compliance with implementation plan; existence o f investment monitoring and reconciliation system; existence o f budget and bank account for project financing; registration o f spending as percent o f transferred received).
5. Environmental indicators: (e.g., to monitor the compliance with: (i) building and environmental protection legislation and guidelines; and (ii) medical waste management and disposal legislation and guidelines.
6. Ex-post survey data for impact evaluation. These consist o f broad set o f output and outcome indicators collected through baseline provider and household surveys applied during PROESF 1.
Results-based Management System. To complement current M O H information systems and to add rigor and coordination to the processes related to data collection, verification, and analysis, the M O H has developed a results-based management system (RBMS). RBMS will be applied during the execution o f PROESF 2. As displayed in Figure 2 below, RBMS aims to link project (grant) financing to states and municipalities along six dimensions: objectives, performance indicators, outputs, inputs (investments), investment priorities, and investment spending. It will draw on and integrate data collected through M O H and government technical and financial information systems and through supervisory site visits for four o f the five above-mentioned M&E areas: PROESF 2 performance, PSF performance, PSF institutional and managerial capabilities, fiduciary capacity, and compliance with environmental legislation and guidelines.
RBMS i s also an investment planning, tracking and assessment tool that will be used by the municipalities, states and MOH. I t aims to provide a continuous stream o f information and feedback useful to both M O H and municipalities throughout the project cycle. For example, each municipality will have to present a plan that aligns each proposed investments or activities to priority (and eligible) investment areas (e.g., PSF expansion, PSF conversion, training, quality improvement, managerial strengthening, and development o f M&E). In turn, each investment or activity i s linked to an objective and one or more target performance indicators. RBMS will be used to rank every municipality in each o f these four areas. The M O H and the states will use the tool to track technical, execution and fiduciary performance o f each municipality, and will be the basis for identifying special training and technical assistance needs. Training and technical assistance will be provided by the states and MOH. In short, RSBS will provide an electronic and continuous register o f progress and problems for each municipality.
58
Figure 2: Results-based Planning and Monitoring Scheme
Objectives
Intermediate and final outcomes (indicators)
0 utp u tsl Activities
Inputs
I nvestment Priorities
Funds
lPROESF2/rnIFaYlil*IIIFI Environmenta Management
. I
59
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4
5
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Annex 4: Detailed Project Description BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Lending instrument, Program Objectives and Phases
1. The Brazil Family Health Extension Progam (PROESF) i s an operation under an Adaptable Program Lending Instrument (APL) approved in 2002, for seven years in three phases. The Program seeks to improve utilization and quality o f publicly-financed health services by:
million) I
expanding and consolidating coverage o f the government's Family Health Program (Programa de Sazide da Familia, or PSF) in about 188 municipalities, establishing well- articulated referral and counter-referral systems, and introducing performance-based financing and management arrangements; establishing family health as a core element o f health professional and para- professional training; and strengthening M O H capacity to monitor and evaluate PSF health services, policies and training activities on a systematic basis.
I
BRAZIL Family Health Extension Project - APL PHASE 2 (PROESF 2)
Implementation Period I FY03-07 FY09-12 FY 12- 14 FY03- 14
The Family Health Program (PSF)
2. During the last 15 years Brazil has implemented a series o f health policy reforms that have transformed the organization, financing and provision o f health services. In the late 1980s, Brazil converted i t s federal public health financing system to a single national health fund. In the mid-1990sY it instituted a per capita payment for primary care services that was distributed directly to municipalities. This simple reform caused a vast improvement in the equity o f the system - poor municipalities suddenly had funds for primary health services on a scale they had not seen before. More recently, this capitation system was enhanced by the Family Health Program, through which the federal government transferred additional funds to municipalities that agreed to implement a proactive primary health care model. During the 199Os, the government focused on assisting rural municipalities to implement these two programs. In both cases, the programs provided additional funds to municipalities for earmarked purposes, and as long as the money was spent for that purpose, the municipalities fulfilled their obligation.
62
3. Municipalities are responsible for the organization and delivery o f all publicly- funded primary care, and can opt to participate in the PSF. The M O H provides additional financing through variable transfersg6 to municipalities who elect to do so. Between 1995 and 2004, federal spending on basic care as a percent o f total M O H spending increases from 11 to 17 percent. Primary health care also benefits from buy-ins by participating states and municipalities. Although systematic data on municipal contributions specific to PSF are unavailable, studies based on small samples show that municipalities contribute an additional between 100 and 180 percent o f the federal transfer. Ten states have recently initiated financial transfers to support PSF at the municipal level. However, federal and state transfers for PSF can only be used to finance family health teams and inputs required by the teams. In terms o f investment financing (to place a new team in specific localities, including plant, equipment and training), a recent M O H study found that the M O H contributes about 64 percent o f the cost (through PROESF) and the municipalities assume the remainder with own revenues.
4. With the support o f th is APL, Brazil took the next step with these policy reforms. This has involved: (a) expanding PSF coverage significantly by focusing on large urban municipalities; (b) transforming basic care delivery to the outreach-oriented PSF approach; (c) changing the character o f the PSF through shifting from input- to performance-based financing and management through federal-municipal agreements; and (d) improving municipal capacity to organize and manage health services while strengthening the overall fiduciary framework at the municipal level.
5. Initiated by the Health Ministry (Ministe'rio da Sadde, or MOH) in 1994 as a relatively small initiative, the PSF has successfully and rapidly expanded coverage o f primary care in rural and peri-urban areas, reaching about 42 percent o f the total population by 2005. PSF i s now one o f the largest federally-funded health programs, spending R$ 2.2 billion (US$ .75 billion) in 2004). There are now 23,500 PSF teams working in over 5,000 municipalities in all o f Brazil's states.
96 Consonant with recent decentralization and health finance reforms, the federal government contributes to financing PSF and basic care through two federal grant transfers to municipalities as follows:
Fixed, per capita payments (PABfixed) transferred to the municipalities to support basic care delivery through the Basic Health Program (AB). The PABfixed i s paid in equal monthly installments. Funds are used to pay personnel (excluding family health teams) and purchase goods and services related to the delivery o f basic care. I t i s not performance-based. Nor i s there performance monitoring. Variable transfers (PABfam) to support the implementation o f the Family Health Program (PSF). The amounts transferred depend on population coverage and the number o f family health teams established. The PABfam i s also paid in monthly installments. This transfer i s mainly used to pay for personnel (community health agents, nurses, dental technicians and doctors) constituting the family health teams. The transfer i s slightly performance-based in the sense that it varies with the number o f health teams, a proxy for population coverage.
.
.
63
The Project
6. The PROESF A P L has been supporting MOH efforts to expand PSF population coverage while strengthening human resources, and organizational and management infrastructure to support effective and continued implementation o f the Program. The program partially finances the annual marginal increase in federal PSF financing, estimated at 10 percent annually during the ten-year proposed program.
7. The APL has been contributing to the following reforms:
k PSF Conversion. This policy reform concerns the conversion o f the primary care delivery system to one based on PSF. PSF represents the platform o n which the government seeks to restructure how publicly-financed primary health care is organized and provided. To achieve this, the government envisions a transformed system at three levels: service provision, service organization and human resource development. At the delivery level, the government has been converting the current, passive-provider, facility-based delivery system to an active-provider, outreach model in which family health care providers deliver quality basic health care to households and communities. This model o f service provision aims to be more efficient by focusing on prevention and early treatment, and using PSF as the gateway to higher- level services. At the organizational level and in support o f the PSF delivery model and decentralization policies, the Government has introduced performance-based management practices, made monitoring and evaluation a core system feature, and aims at establishing formal relationships among primary, secondary and tertiary care providers that now operate in an uncoordinated and nonhierarchical fashion. Finally, the Government strives to implement i t s vision o f a network o f high quality in-service and pre-service training programs that reflect the concepts and state-of-the-art practices o f the family health discipline, while producing the human resources required to expand and improve PSF services. In addition to yielding the direct benefits through the "downstream" expansion and improvement o f health services o f the PSF model, the proposed program facilitates the long-term sustainability o f the PSF through strengthening ''upstream'' institutional capacity to manage, monitor and evaluate performance, and developing human resource capabilities and commitment for family health.
k Performance-based Financing: Conversion represents much more than a bridge between the traditional and PSF delivery models. It also constitutes a bridge between input- and performance-based financing. Through the introduction o f a new transfer mechanism to finance implementation o f the conversion process, PABconv, to support implementation o f the Conversion process, MOH has been applying regulations and performance agreements that link financing to achievement o f performance benchmarks. Compliance with benchmarks "triggers" would determine the level o f financing for each municipality participating in the second phase. Performance indicators would monitor progress in the transformation o f the primary health care system to the PSF model, including the introduction o f performance-based management systems. Consonant with a pooled-financing approach, performance
64
indicators also focus on setting o f standards for acceptable fiduciary practice at the municipal level. As PSF approaches full coverage, the M O H envisions the merging o f the heretofore separate federal grants transfers that currently finance the Basic Health Care Program (PABfixed) under the traditional model and the Family Health Care Program (PABfam) under the new model. Building upon the implementation experience o f A P L Phase 1 , performance-based instruments have been strengthened to govern project financing to states and municipalities in the proposed project. Par. 35 below describes in detail the performance-based financing scheme.
9 Decentralization: This reform also entails decentralization o f management responsibilities to the municipalities for the implementation o f primary care services and activities. In accordance with recent regulations, M O H seeks to complete the transfer o f full management responsibility to the municipalities for the delivery o f primary care. Decentralization o f management responsibilities began in the early 1990s. Assessment for "full management o f basic care" entails installing: (i) the necessary capacity to technically plan, implement, supervise and monitor primary care services; and (ii) fiduciary arrangements and support systems such as auditing, accounting and information management to ensure proper use o f funds. The program supports decentralization through strengthening municipal management capacity, introducing performance-based management systems, and establishing solid monitoring and evaluation capabilities.
9 Pooling Feature: For Component 1, Bank financing i s pooled with federal grant transfers for two M O H programs: Basic Health Care (AB) and Family Health (PSF). Both AB and PSF are large, on-going government programs financed through separate federal grants transferred to municipalities which are responsible for service delivery. For Component 2, Bank financing i s pooled with one large and on-going federal grant transfer, medium and high complexity. Under existing government arrangements, these transfers f low through a National Health Fund, maintained by the MOH, to a common bank account at each municipality or state. The AB and PSF grants finance a similar set activities and services but under different models. The grant for AB finances services delivery under the existing, traditional model, while the PSF grant supports services provision under a proactive, outreach model. Both grants were recently merged.
P To enable Bank's financial support o f the PSF through the existing federal-to- municipal grant system, the government requested that the proposed Project incorporate a special pooling arrangement together with innovative fiduciary features. The APL co-finances the implementation o f Municipal PSF extension and conversion Subprojects (Component 1) and State M&E subprojects (Component 2). The former consist o f a set o f pre-identified activities necessary to extend Family Health service delivery and convert the health care model o f the Basic Care Program to the model o f the Family Health Program. The latter consist o f a set o f M&E interventions to support performance monitoring o f municipalities by the states.
65
k Under the proposed project, each state and municipality enters into a three-year agreement with the federal government to implement respective Subprojects. Subprojects are backed up by a procurement scheduling that i s updated annually. The overall disbursement schedule i s based on Subproject procurement scheduling. To satisfy the government's request regarding Bank participation in the above-described municipal financing system, the Project apply three innovative fiduciary features used in A P L Phase 1 :
(i) extension o f period (to one year) for which advances (disbursements) would continue to be made before the eligibility o f expenditures were reconciled through Project Monitoring Reports (PMRs); loan proceeds finance a pre-defined percent o f the Subproject Pool instead o f defined percent o f each transaction, as is normal practice; and application o f national rules for the procurement o f small packages o f goods, works and services, with compliance assessed on an ex post basis.
(ii)
(iii)
8. The pooling feature offers a number o f advantages to both the government and the Bank. For the government, the feature permits the Bank to mingle i t s funds with established grant transfers to facilitate the smooth f low o f funds to a large number o f widely-dispersed, and diverse municipalities. It also creates a single reporting system for the grants rather than parallel and redundant systems for government and Bank purposes. Bank assistance i s refocused to strengthen the fiduciary framework for the MOH programs, which contributes to improved health services management. Finally, the feature reorients the partnership between the government and Bank, permitting the Bank to assist the MOH realigning federal-municipal relations to focus on performance and results. For the Bank, pooling o f funds affords the opportunity to: (i) form a long-term partnership with the government in the health sector since grant transfers are the only method used by the government to finance primary health care; (ii) participate in the most important reforms o f the sector, and (iii) enhance developmental impact by shifting Bank supervision from tracking transactions financed through loan proceeds to oversight and improvement o f the government's fiduciary systems.
APL Phase 1. Initiating Conversion to PSF Model in Large Urban Municipalities and Strengthening Training Programs and Monitoring and Evaluation Systems
9. The first phase extended the PSF to large urban municipalities, expanded training opportunities for PSF team members, and developed core systems to enhance quality and performance o f PSF provision. PROESF 1 focused on extension o f PSF population coverage, establishment o f a federal transfer mechanism in support o f PROESF-financed investments, pre-service and in-service training o f family health professionals and para- professionals, development and testing o f a performance-based financing and management system in support o f PSF, design o f a PSF quality assessment system, strengthening o f PSF monitoring system, collection o f base l ine data for subsequent impact measurement, and development o f protocols for referrals and care practices for PSF teams.
66
10. The first phase was completed on June, 30 2007. The Project met or surpassed expectations for five o f six policy triggers and al l six implementation triggers for moving to Phase 2, and exceeded targets for four o f the triggers. Project indicators were defined with only 40 municipalities in mind. The fact that nearly al l were achieved for 188 municipalities i s a significant achievement. Given the Government decision to expand participating municipalities from 40 to 188 (10 declined participation) at the onset o f PROESF 1, and nearly quadrupling the population base, the Project fe l l slightly short o f compliance on the coverage target, attaining 34 percent coverage rather the 35 percent target. However, 120 municipalities (or 64 percent o f al l participants) did meet the target, achieving an average coverage o f 48 percent. These data provide evidence o f significant progress and, as a result, assurance that significant progress has been achieved.
1 1. PROESF 1 also achieved significant compliance with performance indicators despite the substantial expansion o f participating municipalities. O f the 188 participating municipalities, about 70 percent fully implemented the activities and investments included in signed “expansion and conversion” agreements, and complied with performance indicators. In contrast, only one municipality did not execute the agreements, and the M O H i s seeking reimbursement. Thirty-eight municipalities received a bonus payment representing 50 percent o f their original grant for significantly exceeding performance indicators related to: (i) population coverage, (ii) fiduciary implementation (e.g., at least 75 percent o f spending was supported b receipts, and (iii) compliance with PSF PROESF personnel and infrastructure norms.’ PROESF 1 also financed the conversion o f about 2,400 traditional facilities to PSF health units (1,300 units remain unconverted). Out o f 14 performance indicators, the municipalities on average complied with 10 and attained near compliance on the remainder. Finally, in a matched comparison between 10 municipalities participating in PROESF and 10 non- participants, the MOH found that the former had higher levels o f PSF coverage, pre-natal care, reduced number o f hospital chi ld admissions for respiratory infections and diarrhea than the control group.
APL Phase 2. Expanding and Consolidating PSF in Large Urban Municipalities and Strengthening State Capacity to Support PSF and Federal Oversight o f PSF
12. The second phase will build upon the accomplishment o f the f i rs t phase while strengthening the quality o f PSF care and states’ capacity to monitor and evaluate PSF services. In addition to supporting coverage extension in approximately 187 municipalities that participated in Phase 1, the second phase will support quality improvement, strengthen capacity o f states’ to monitor and evaluate PSF, introduce a performance-based financing mechanism between the federal government and participating states and municipalities, and develop and test a results-based management system for PSF teams. Triggers for the third phase are as follows:
These include: (i) fill cadre o f personnel for a l l PSF teams, (ii) evidence that a l l team members work contracted hours (40 hours per weeks); (iii) units contain full stock o f equipment specified by for PSF norms, and (iv) infrastructure is sufficient for teams to carry out functions and services. Compliance with norms was assessed through f ield visits.
97
67
Triggers for APL Phase 3 0
0
37% average population coverage of PSF in participating municipalities (current coverage [ 12/06] : 3 4 percent) 15 percent o f PSF teams in participating municipalities participate in MOH’s PSF Quality Assessment Program (AMQ), including the application of the self-evaluation instrument and ranking according to AMQ quality stages (current level: 7 percent) PSF Conversion and Expansion Agreements signed with approximately 188 municipalities with greater than 100.000, including a linking o f a proportion of financing to achievement o f specified technical and fiduciary performance indicators. 20 (of 27) states have implemented M&E plans for PSF/AB, including: (i) establishment and staffing o f an M&E unit within the State Health Secretariat; (ii) definition o f indictors for PSF results monitoring; (iii) collection o f baseline data for monitoring indicators; and (iv) preparation of report analyzing the baseline data. Model for results-based management o f PSF teams developed and tested in at least three municipalities.
0
0
13. Project development objectives and key indicators. Consonant with the Program goals, the objectives o f the proposed second phase are as follows:
0
0
0
increase access to Family Health-based primary care in about 187 large, urban municipalities; raise the technical quality o f and patient satisfaction with primary care; and improve the efficiency and effectiveness o f Family Health service providers as well as the broader delivery system.
14. Means to achieve these objectives include: expansion o f PSF providers, conversion o f traditional basic care providers to the PSF approach, applying quality o f care assessment mechanism; strengthening in-service and pre-service training o f personnel; establishing referral and counter-referral linkages between family health teams and the broader network o f health providers; strengthening monitoring practices and information management both in states and municipalities; introducing results-based management, including quality-based purchasing; applying performance-based financing mechanisms, increasing the provision o f on-demand services, strengthening health promotion and management o f chronic diseases; supporting systematic impact evaluation. The main Program and Project indicators are presented in Annex 2.
15. Project Components. The second phase will consist o f three components: (i) expansion and consolidation o f Family Health care in municipalities over 100,000 population that participated APL Phase 1 ; (ii) strengthening training, management and monitoring and evaluation o f the Family Health Program in States and the Federal District (DF); and (iii) strengthening management o f the Family Health Program at federal level. Municipalities and states would submit subprojects for financing and implementation under Components 1 and 2.
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16. Component 1. Expansion and Consolidation of Family Health Care in Municipalities (US$133.450 million total costs o r 80.0 percent; US$55.0 loan amount o r 66.0 percent). This component aims at scaling up and strengthening PSF capacity at the municipal level. O f the approximately 250 municipalities with populations over 100,000, 188 municipalities will participate. The strategic aim i s to raise PSF population coverage from about 34 to 37 percent. Coverage extension activities would continue to focus on large urban areas, which are characterized by poorly integrated, traditional service delivery systems and large numbers o f fami l ies living in poverty and confronting severe social risk.
17.
(9
(ii)
(iii)
(iv)
18.
The component would support four sets o f activities:
the extension o f Family Health to municipalities where this model i s in an initial phase o f implementation, and continued expansion o f the model in municipalities that have already made significant headway on family health, but have yet to attain coverage targets. This activity would also support the conversion o f traditional un i ts to the PSF model; consolidation, quality improvement and innovation in municipalities that have shown significant progress in coverage extension during the first phase APL, including strengthening supervision and managerial capacity, establishing l i n k s to higher levels services for care management, and introducing the PSF quality assessment program; support for municipal-based in-service training. Financing in-service training activities would also be decentralized to participating municipalities through the Ministry's grant transfer subsystem vundo afundo); and. '* improvement o f monitoring and information systems.
The component would focus on improving management o f primary health care in selected municipalities. Projects and workshops would be carried out to develop management tools, such as the establishment o f Municipal Family Health Coordination bodies, and Municipal Health Plans and Management and Operational Plans. Technical assistance and equipment will be provided to municipalities to develop their M&E systems. Interdisciplinary supervision teams would be established.
19. include development and implementation of:
Capacity building o f PSF teams and management under this component would
PSF teams: training courses for PSF teams; instruments and methods for supervision o f the PSF teams; new health care practices, work processes, and protocols.
PSF Management: performance-based management systems; instruments; capacity building o f Family Health Coordination Units; and performance-based contracts between managers o f eligible municipalities and Family Health teams.
Which were centrally implemented in Phase 1 through counterpart funds.
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PSF M&E: information systems to manage data track results and assess performance; monitoring and evaluation systems.
20. Allocation o f component funds by municipalities will be based on:
Eligibility. The 187 municipalities that participated in Phase 1 would be eligible to participate in phase 2 once they meet the following criteria: (i) Comply with fiduciary obligations; (ii) maintain or increase the number o f PSF teams since 2003; (iii) present investment plan by deadline; (iv) present revised investment plan addressing recommended modifications (by deadline); (v) have appointed a ABPSF coordinator; (vi) have appointed technician responsible for project coordination; and (vii) have sent representatives to project launch and training workshops. Subprojects and Results-Based Agreements. The 187 municipalities that participated in phase 1 were divided in groups according to technical (degree o f achievement o f technical targets), and fiduciary risk (budget execution, fiduciary classification). This grouping would determine the initial level o f financing available for each municipality under phase 2. Each Municipality will sign PSF agreements with the MOH that would specify 12 results indicators. Achievement o f these indicators would determine the level o f financing for Phase 3. If participating municipalities comply with elective bonus indicators, they can earn additional funds. A more detailed description o f the performance-based financing scheme i s provided in Par. 35 below. Municipality exclusion. Municipalities that do not initiate financial execution o f the subproject 12 months after receiving the grant will loose eligibility for further funding until the issue i s solved. Technical assistance would be provided by the state and federal levels to solve the financial or technical issues that impeded execution. Criteria for exclusion from Phase 3 financing include evidence o f irregular use o f project funds and low-execution o f project financing (see Table 3.6 o f Annex 3).
21. All financing would be channeled to municipalities through a pooled funding (SWAP approach). The component would finance works, goods, training and technical assistance. Works would include upgrading and equipping o f PSF health facilities, including the construction and rehabilitation o f family health centers, and procurement o f medical and non-medical equipment (including basic communications equipment), furniture and vehicles (except ambulances).
22. Component 2. Strengthening State Capacity for Supervision, Monitoring and Technical Support o f Family Health Services (US$17.450 million total costs or 10.5 percent; US$12.450 loan amount o r 15 percent). This component aims at strengthening state capacity to:
(i) support municipalities extend coverage, improve technical quality, and manage service delivery, with a special focus in municipalities with less than 100,000 inhabitants;
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(ii) (iii) conduct monitoring and supervision as key functions o f state health
improve the quality o f family health human resources; and
secretariats.
23. Recently-approved M O H regulations grant states a central role in oversight, monitoring and evaluation o f municipal delivery systems. Eight states have taken a pro- active role in primary care by financing service extension through state-to-municipal grant transfers. Others have made purchases for goods and supplies which are distributed to municipalities. Consistent with recently approved M O H regulations, states will play an increasingly important role in measuring results and monitoring municipal performance, while increasing the quality o f health professionals and para-professionals for and providing technical and supervisory assistance (in policy making, planning, information and service management, and human resource training) to low-capacity municipalities. States would carry out subprojects for strengthening the institutional capacity o f States’ secretariats o f health.
24. and it would include three sets o f activities:
The component would be implemented by 26 States and the Federal District (DF),
(i) Organizational structuring o f state health secretariats to play a central role in oversight, monitoring and quality improvement o f municipal ABPSF delivery systems. To support these new state roles activities would include: establishment o f State Family Health Coordination teams to provide technical support and monitor the performance o f basic care and family health services implemented by municipalities under their jurisdiction; managerial training o f AB/PSF coordinators; development and training o f teams to supervise small and medium-size municipalities, implementation o f the MOH’s quality assessment o f Family Health providers in small and medium-size municipalities; and equipping offices for State PSF Coordination teams.
(ii) Support for continuous education o f family health professional and para- professional staff, This would involve, among other activities, the establishment o f partnerships with universit ies and other training institutions to develop in-service courses for Family Health professionals and para-professionals, such as community health agents and dental hygiene assistants.
(iii) Institutionalization o f monitoring and supervision functions in state secretariats. This would involve the development o f a program for management and evaluation based on targets and performance, and the development o f state plans to measure and evaluate municipal performance in Family Health. Specific activities include: (a) establishment o f monitoring teams to assess, on a regular basis, the performance o f municipalities in the operation o f their basic care systems; (b) upgrading o f information systems to manage data and track performance o f municipal family health services; (c) equipping o f offices for monitoring and supervision teams; (d) development of skills required for monitoring and evaluation o f family health services; (e) implementation o f evaluative and operational research to measure the performance o f municipal basic care providers; and (0 supporting implementation o f information
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systems, including the development o f a database with information to establish and track basic care indicators.
25. All financing would be channeled to states through a pooled funding (SWAp approach). The component would finance goods, materials, training and technical assistance. Resources will be directed mainly to professional and technical schools.
26. Allocation o f component funds by states will be based on:
Eligibility. The 26 states and Federal District would be eligible to participate in phase 2 once they meet the following criteria: (i) present investment plan by deadline; (ii) present revised investment plan addressing recommended modifications (by deadline); (iii) have appointed a state ABPSF coordinator; (iv) have appointed technician responsible for project coordination; (v) have sent representatives to project launch and training workshops. Subprojects and Results-Based Agreements. States and the Federal District would be grouped according to technical (degree o f achievement o f technical targets), and (ii) fiduciary risk (budget execution, fiduciary classification). This grouping would determine the initial level o f financing available for each under phase 2. Each state will sign an agreement with the M O H that would specify 6 results indicators. Achievement o f these indicators would determine the level o f financing for Phase 3. If states comply with elective bonus indicators, they can earn additional funds. A more detailed description o f the performance-based financing scheme i s provided in Par. 35 below. State Exclusion. States that do not initiate financial execution o f the subproject 12 months after receiving the grant will loose eligibility for further funding until the issue i s solved. Technical assistance would be provided by the state and federal levels to solve the financial or technical issues that impeded execution. Criteria for exclusion from Phase 3 financing include: evidence o f irregular use o f project funds and low-execution o f project financing (see Table 3.6 o f Annex 3).
27. Component 3. Strengthening Federal Oversight of the Family Health Program (US$15.8 million total costs or 9.5 percent; US$16.0 loan amount or 19 percent). This component aims at strengthening PSF oversight capacity at federal level. It would strengthen the capacity o f the Ministry o f Health to provide support to states and municipalities in the implementation o f Components 1 and 2. The component will finance development o f PSF accountability arrangements, including results-based financing and management; and support the states and municipalities to develop training programs, research, monitoring and evaluation arrangements, and coordination and supervision capacity. It will also finance research and evaluative studies on specific aspects o f PSF service organization and delivery as wel l as institutionalize AB/PSF impact evaluation in the MOH.
28. Specifically, the component will support: development and implementation o f the family health model o f care, and a new management model, including protocols for management o f Basic Health Units; implementation o f mechanisms and tools for state
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and municipal health planning and reorganization, which would be agreed and disseminated in workshops, seminars and events; instituting a system o f quality assessment o f Family Health providers, and an award system; development o f state and municipal human resources through workshops, seminars and events; implementation o f monitoring & evaluation o f family health, which would be contracted out to research institutes; and training and capacity building activities for Family Health Teams.
29. Results-based management, financing and monitoring and evaluation. In the first year, this component would define a management model appropriate for the Family Health Program, including the development and testing of: (i) managerial roles and protocols for the management o f basic health units; (ii) instruments and mechanisms for organizing and planning family health; (iii) a results-based management system, including the development and application o f performance-based contracts between municipal managers and family health teams; and (v) cost accounting systems for family health. The Project would support these activities through consulting services, the preparation o f manuals, instruments and training, and hosting o f workshops and seminars to facilitate dissemination and implementation.
30. PSF Quality. For strengthening the quality o f PSF, the following activities would be carried out: (i) development o f clinical guidelines for primary care management o f specific diseases and conditions; (ii) provide technical support and training for extension o f the MOH’s quality assessment system for basic care and family health. PSF training would be supported through the following activities: (a) specialization courses in Family Health; (b) research opportunities for Family Health professionals; (c) development textbooks and training materials in Family Health; (d) development and implementation o f pre-service and in-service courses for Family Health professionals and paraprofessionals; (e) development o f inter-municipal cooperation plans to support sharing o f best-practices, cross-fertilization, pooled financing o f training, and horizontal technical assistance; and ( f ) implementation o f national PSF Performance Award.
3 1. PSF M&E. The component would finance the consolidation and standardization o f monitoring systems and instruments for basic care and family health care including: (i) strengthening and standardization monitoring systems to track performance o f the PSF Program and for gauging compliance with MOH-state-municipal agreements; (ii) revision o f the indicators used in monitoring systems for federal assessment o f state and municipal performance in basic care and family health; and (iii) upgrading information systems including development o f integrated data systems to support the performance monitoring o f PSF and basic care, including the reformulation o f the existing systems.
32. PSF Evaluations. The component would finance three studies, including: (i) PSF role on prevention and control o f chronic diseases (non-communicable diseases and AIDS); and (ii) survey o f patient satisfaction. Methods and plan to evaluate PROESF will also be developed. These studies will be carried out in representative samples o f municipalities and states.
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33. assistance, and the project operational costs.
Implemented centrally, the component would finance goods, training, technical
34. Linking project financing to performance (Components 1 and 2): The Project would seek to implement a more robust results-based financing system to stimulate performance o f participating states and municipalities in Components 1 and 2 respectively. The concept involves linking levels o f financing to levels o f performance in terms o f coverage extension, quality improvement, efficiency, and fiduciary actions.99 It will consist o f four features: (i) a scheme that l i n k s payments to levels o f performance;”’ (ii) bonus payments for achievement o f performance targets tied to “elective” indicators; (iii) eligibility criteria; and (iv) exclusion for non-execution. Performance will be assessed at project mid-term (e.g. after 18 months o f implementation) and conclusion (e.g., 3 years). Performance levels achieved at mid-term will determine financing levels for the subsequent 18 months o f execution. Performance levels achieved at the conclusion o f this A P L Phase 2 would determine municipal and state participation as well financing levels in A P L Phase 3.
35. Figure 1 presents the scheme for linking payments to performance for participating municipalities. lo’ Once eligibleIo2 and based on an assessment o f technical performance (coverage and utilization) and financial execution during PROESF 1 , each participating municipality will be rated and placed in a payment category, which i s represented by the boxes in the graph. For example, l o w performers will be placed in categories (d), (g) and (h) while higher performers will be placed in categories (a), (e) and (i). Each category represents a payment level with the lowest level ($X in box g) being less than one-half o f the highest level (box c). To move among levels and therefore earn additional funding (e.g., move from category [g] to category [e], for example), municipalities must achieve coverage targets (vertical movement) as well as effectiveness, efficiency and fiduciary targets (horizontal movement) agreed with the MOH.lo3 In sum, a municipality could increase project financing (e.g., value o f payment per PSF team) by a factor o f 2.5 if it achieves agreed benchmarks. This would provide a strong incentive to comply with performance indicators (See Figure 1).
The scheme does not involve performance-based disbursement by the Bank. Applying the SWAP or pooled resource model already under implementation in PROESF 1 and VIGISUS 2, the M O H wi l l allocate resources according to spending and implementation plans proposed by participating municipalities. These M O H allocations o f pooled loan proceeds wi l l be linked to performance.
This scheme consists o f two parts and each follows the model illustrated in Figure 1. The first i s assessed every six months and i s based on one health (coverage) indicator and one fiduciary (financial execution) indicator. The second i s assessed at project conclusion and i s based on an expanded set o f health and fiduciary indicators (See Annex Table 3.3 and 3.4). Municipalities can earn higher levels o f financing under both parts o f the scheme. lo’ A similar scheme, but based on a different set o f indicators, wi l l be applied to the states (Component 2). I O 2 See Table 3.5 o f Annex 3 for eligibility criteria. I O 3 See Table 3.3 o f Annex 3 for a l i s t o f performance and “elective” indicators. Performance indicators would be differentiated according to levels o f coverage and other technical criteria.
99
100
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36. Municipalities could also gain an additional 15 percent o f financing by achieving targets linked to “elective” indicators. In contrast, low performance can result in downgrading (e.g., movement from category [e] to category [g], for example). Continued non- performance by a municipality already placed in the lowest category (g), would result in exclusion from project financing. Further, very low execution o f project financing for any municipality as well as irregularities in the use o f funds can result in exclusion from Phase 3 financing. lo4
FIGURE 1
FOR PARTICIPATING MuNClPWTIES (variabon in per PSF teamallocations
PERFORMANCE-BASED INCENTIVESCHEME
mudnun tw
3 7. The accountability arrangement consists o f signed management contracts that specify performance indicators, as well as spending and implementation plans. Performance indicators will be reviewed and negotiated between the MOH and participating municipalities. Movement along the vertical ax is w i l l be based on compliance with population coverage targets. Movement along the horizontal axis will be based on a weighted point system applied to both technical (coverage, quality, efficiency) and fiduciary (procurement and financial management) indicators. Minimum point levels will be established to trigger movement to higher payment categories. Performance wi l l be assessed after 18 months and 3 years o f implementation. The weights, values, and other aspects o f the performance-based financing scheme wi l l be detailed in Operational Manual.
‘04 Exclusion criteria are presented in Table 3.6 o f Annex 3.
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Annex 5: Project Costs BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Local Foreign Total Project Cost By Component and/or Activity us us us
$million $million $million 1. Expansion and Consolidation o f Family 137.3 0.4 137.7 Health Care in Municipalities 2. Strengthening State Management o f the 18.0 18.0 Family Health Program 3. Strengthening Federal Management o f the 14.8 0.1 14.9 Family Health Program
Price contingencies are generated by the COSTAB system on the basis o f assumptions regarding 105
Government’s projected inflation and exchange rate movements.
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Annex 6: Implementation Arrangements BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
1. Overview. The second phase o f the Family Health Extension Program i s expected to be implemented over a three-year period. The Project would have an expected Effective Date o f September l’‘, 2008, and a Closing Date o f March 30, 2012. The total project costs are US$166.9 million, with a loan amount o f US$83.45 million.
The Project would be coordinated and partially implemented by the Department o f Basic Health Care (DAB) o f the Ministry o f Health (MOH). DAB would count on the Ministry’s regular institutional structure for the technical oversight o f the project, which would be strengthened by a group o f technical and fiduciary staff.
The eligible municipalitieslo6 and states, through their Secretariats o f Health, would be responsible for the implementation o f 80 percent o f Bank’s financing. To this end, the municipalities would present subprojects to expand the number o f Family Health teams, and improve basic health care delivery. The 26 states and the Federal District would be eligible for benefiting from the Project by presenting subprojects for strengthening their monitoring and evaluation capacity. Based on lessons learned from Phase 1, the Project would finance under Component 3 a group o f consultants for technical and operational advice and assistance to such municipalities and states.
DAB would also be supported by a small group o f operational staff who would be in charge o f carrying out fiduciary and administrative tasks associated to the project’s daily implementation. The Bank shall be satisfied with the Terms o f Reference and the proposed candidates, at least for the key positions under this implementation scheme. The project implementation would be supported by a revised Operational Manual containing relevant information for the three different levels o f implementation - Federal, state and municipal.
2. Executing Agency. DAB i s one o f the four Departments under the Secretariat o f Health Services (SAS) o f the Ministry o f Health. I t s role i s to contribute to the development and implementation o f basic health care policies in Brazil. It i s comprised by five units: (i) Management o f Basic Health Care; (ii) Monitoring and Evaluation; (iii) Food and Nutrition; (iv) Hypertension and Diabetes; and (v) Dental Care - responsible for coordinating the National Family Health Program.
DAB would be in charge o f coordinating the project; promoting the Project at federal, state and municipal levels to ensure time and properly project implementation; keeping the political and technical dialogue with other Governmental agencies (inter and intra MOH); reviewing and approving municipal and state subprojects; providing technical and fiduciary assistance to municipalities and states; monitoring project’s indicators and results; and over-sighting project’s implementation and legal obligations. In addition,
Municipal i t ies with more than 100,000 inhabitants. 106
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DAB would be responsible for implementing a range o f activities aimed at strengthening governance; promoting culture o f performance-based financing; improving the monitoring and evaluation capacity o f the federal, state and municipal levels; and promoting human resources’ development.
To proper develop its role, DAB would be strengthened with a group o f consultants in charge o f assisting in the review and approval o f municipal and state subprojects; providing assistance to municipalities and states for the implementation o f their subprojects; carrying out site visits; developing training strategies; and monitoring project indicators.
3. The Project Coordinator: DAB would assign a Project Coordinator, responsible for the Project’s overview and keeping the MOH, state and municipalities informed on the project implementation progress. The coordinator would be in charge o f monitoring bottlenecks to project implementation, proposing mitigating and corrective measures, preparing progress reports, and dialoguing with the Bank on the project-related issues.
4. The Group of Operational Staff. DAB would be supported by a group o f professionals dedicated to the fiduciary and administrative aspects o f the project. The operational unit main responsibilities are to: (i) ensure project’s implementation in accordance to the Loan Agreement and the Operational Manual; (ii) manage administrative and financial resources; (iii) ensure the auditing o f project accounts and procurement independent reviews in participating municipalities and states; (iv) adapt and operate project’s information system, as well as provide training to end-users; (v) organize the monitoring o f project’s performance indicators; (vi) keep project-related documents organized and filed; and (vii) prepare periodic reports and participate in Bank’s supervision missions.
This group would make use o f the existing facilities o f the M O H D A B , and would be organized as follows: (i) Procurement, Financial Management, and Administrative sub- group (5 professionals); and (ii) Information Systems Management sub-group (4 professionals). Specific tasks are as follows:
Procurement, Financial Management and Administrative sub-group: in charge o f providing guidance to DAB, states and municipalities on project’s procurement and financial management rules and procedures. The group, comprised by a Procurement Specialist, a FM Specialist, two FM analysts and an administrative assistant, would be responsible for: (i) revising and approving the procurement plans for Component 3; (ii) following up on procurement and financial management assessments and respective plans for improving state and municipal capacity on fiduciary areas; and (iii) tracking project’s funds, making the liaison with the Fundo Nacional de Satide; and monitoring disbursements.
Information Systems Management sub-grouQ: responsible for adapting and refining the project information system. It would provide assistance and training to states and municipalities on the use and maintenance o f project’s data and information.
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5. Overall Implementation Arrangements
Ministry o f Health - A s previously stated, the M O H i s the executing agency and the primary responsible for project implementation and oversight. Differently from Phase 1, the M O H would have the responsibility o f implementing a larger number o f activities, mainly related to governance; professional development and training o f human resources; development o f strategic studies and researches; and monitoring and evaluation activities. The scope o f such activities would be aimed at strengthening the Family Health Program as a whole, and providing a general framework for the activities to be implemented at the sub-national levels. About 20 percent o f Bank’s financing would be centrally-executed,
States - The role o f states, regarding basic health care, comprises: (i) providing municipalities with technical assistance, political and financial support for basic health care management; (ii) identifying population’ needs at the state level; (iii) coordinating the design o f the health service network amongst municipalities; and (iv) monitoring and evaluating basic health care indicators agreed with municipalities. In this context, the states and Federal District would be receiving about 15 percent o f total loan proceeds to implement monitoring and evaluation subprojects. These subprojects would be presented and executed by the State Health Secretariats, while financing would be channeled through the Fund to Fund mechanism. These kinds o f activities have been included during Phase 1 through an amendment to the loan agreement. Thus, resources o f the second phase would expand activities already initiated and strengthen states’ capacity on monitoring and evaluation areas.
Municipalities - Because municipalities are the ones responsible for delivering basic health services in Brazil, they would be the largest beneficiaries from project’s financing. A total o f 187 municipalities (out o f 250 with more than 100,000 inhabitants) would be expected to present subprojects for expanding the family health teams and strengthening quality o f basic health services, which would account for approximately 65 percent o f total loan proceeds. The Department responsible for the Basic Health Care services within the Municipal Secretariat o f Health would be in charge o f coordinating execution o f subproject’s activities at the municipal level. This would allow an integration o f the basic care activities financed with local, federal and Bank’s funds, scaling-up financing and other resources, and avoiding overlapping or parallel activities within the system. The relevant information for allowing sound implementation o f the municipal subprojects, including obligations and responsibilities, would be stated in a legal agreement to be signed between the M O H and the participating municipality. Similar to states, funds would be transferred from the Fundo Nacional de Satide to Fundo Municipal de Satide, using mechanisms already in place and extensively used in Phase 1.
6. Operational Manual. The project’s Operational Manual would describe the rules and procedures for the project’s implementation and monitoring. It would clearly instruct states and municipalities to develop and submit subprojects, implement eligible activities, monitor project performance indicators, and comply with project’s fiduciary framework.
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The Operational Manual would incorporate the lessons learned from the f irst phase and be divided in specific sections covering the relevant technical and fiduciary aspects.
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n
I
r 1
I
I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
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Annex 7: Financial Management and Disbursement Arrangements
BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Financial Management and Disbursements Arrangements
Executive Summary and Financial Management Assessment Conclusion - The Family Health 2 Project i s the second phase o f an APL. Total loan amount i s expected to be US$83.45M and overall project costs estimated at US$l66.9M.
This being a repeater project, a full scope Financial Management Assessment o f the implementing entity within the Ministry o f Health’s (MOH) and al l state and municipalities involved was not considered necessary, given: (i) the Bank’s experience and knowledge o f the fiduciary arrangements in place at the federal level, based on the 2002 Country Financial Accountability Assessment and the new flow o f funds introduced by Secretaria do Tesouro Nacional on February 2004, and (ii) Phase 1’s experience and lessons learned, in particular at the Ministry o f Health’s project implementing unit. The Family Health 1 project - Phase 1 concluded implementation on June 30, 2007. The implementing unit was located at the Departamento de Atenqclo Bhsisica (DAB), which i s part o f the Secretaria de Atenqtio ’a Safide.
Most o f the Project will be implemented, through fund-to-fund transfers, to municipalities, involving approximately 187 municipalities, and to states, with 26 states and the Federal District benefiting from the project. Some project activities will also be implemented at the Federal level, by MOH.
As above said, the preparation o f the second phase draws mainly from the lessons learned during phase one. Due to impossibility o f carrying out capacity assessments for such a large number o f sub-national entities involved, the team focused on amounts transferred through Statements o f Transfers to states and municipalities, during phase one, and placed reliance on a fiduciary (financial management and procurement) capacity assessment undertaken by consultants hired by the Ministry o f Health, under Bank guidance and supervision.
Agreement was reached that financial management priorities for the second phase would be two fold: (i) focus on the strengthening o f the ministry’s internal control and oversight mechanisms, namely close monitoring o f project execution and reporting from sub- national level, and (ii) early engagement o f the independent auditors - CGU’s Secretaria Federal de Control (SFC) - in the process, in particular in the design o f the scope and audit work to be undertaken, in order to avoid some o f the shortcomings identified during the f i rst stage.
While, as in phase one, reliance will be placed on SFC’s work to provide comfort, on an annual basis, to the Bank that loan proceeds have been used for the purposes intended, the proposed arrangements for the second phase will enhance MOH’s internal controls
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over project execution at al l levels - federal, state and municipal -, as the main oversight tool.
This approach was well accepted and is aligned with MOH’s on going capacity strengthening; in practice, the Project will provide support to the on going capacity building in the fiduciary area at the MOH. A clarification o f what the expectations, in regard to the role o f the auditors and the effectiveness o f their work, are, will decisively contribute to an overall satisfactory fiduciary framework.
Given the experience o f Family Health, the overall Financial Management Assessment conclusion i s that the Project has satisfactory financial management arrangements in place to meet Bank’s minimum requirements. However, areas for improvement have been identified and will be adequately followed up. The financial management risk associated with the Project has been assessed as moderate. The project’s financial management system will be able to provide relevant and reliable financial information, in a timely manner, and to support project’s management in the control, planning, implementation and monitoring o f the project, towards the achievement o f i t s objectives.
Implementing Entity - The Family Health 2 Project will be managed by the same Department within the M O H that implemented Phase 1. While during Family Health 1, from mid 2004 to mid 2005, the M O H failed to maintain an adequately staffed UGP, it currently has the necessary resources to successfully discharge i t s financial management and disbursement responsibilities.
Retention o f the financial management staff will be fundamental for the success o f Phase 2. However, given the high number o f municipalities and states involved, the Ministry o f Health’s Monitoring and Evaluation capacity will have to be strengthened. I t has already been agreed with the borrower to increase the number o f staffing working on the oversight o f activities to be implemented by states and municipalities.
At the sub-national level, the Project will be decentralized and implemented by States and Municipal Secretariats o f Health, which have been assessed by MOH team from a fiduciary standpoint.
Financial Management System - The DAB will monitor and register financial data o f the Project in two different systems: (1) in SIAFI, the Federal Government’s public financial management administered by Secretaria do Tesouro National, where expenditures are necessarily budgeted, committed and accounted for, and through which al l federal government payments are made, and (2) SGP - Sistema de Gerenciamento do Projeto (SGP), a system originally developed for the first VIGISUS loan and now fully operational. The latter, among other control features, monitors transfers to municipalities and states, and i s used to report actual expenditures to the MOH. It can provide a clear picture o f what the situation o f a specific state/municipality in terms accounting for transfers is. Financial data in both systems will be consistent and reconciled on a regular basis; any discrepancies will be timely followed-up.
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Within SIAFI there is a Unidade Gestora (UG) exclusively for the project. All eligible expenditures, financed out o f loan proceeds or through the Government’s own resources will be recorded under this new UG. All payments will be made in SIAFI, upon instructions from the DAB.
The SGP system will be the fundamental project monitoring tool. Project Component I - Expansion and Consolidation o f Family Health Care in Municipalities and Component I1 - Strengthening State Management o f the Family Health Program, will disburse mainly through, respectively, Municipal Subprojects and State Subprojects disbursement categories.
Eligible municipalities and states will also have to qualify f rom a financial management standpoint. A financial management risk assessment o f &l municipalities and states already implementing Phase 1 and eligible for financing under Phase 2 was carried out and will be joint ly reviewed by Bank and client staff in order to assess realism and establish capacity building and monitoring priorities.
The Bank and MOH will joint ly prepare a fiduciary action plan focusing on poor performers and high risk recipients; based on a review of: (i) the reporting status o f each municipality and state; (ii) the auditors’ risk rating, indicated by Secretaria Federal de Controle (SFC) as part o f the 2005 audit o f the project; and (iii) the consultants’ financial management risk assessment already mentioned.
Financial Management Assessment - The assessment, despite the limited scope, was carried out in accordance with OP/BP 10.02 and the Guidelines for Assessment o f Financial Management Arrangements in World Bank Financed Projects issued by the Financial Management Sector Board on October 15,2003.
It builds on: (i) the overall Country Financial Accountability Assessment carried out for Brazil in 2002, which concluded that “...the Brazilian system of public financial management provides reliable information. Adequate systems exist to manage and track the receipt and use of funds at national level ... The risk to both Bank and country funds is low”; (ii) the Bank’s experience with other projects implemented by the MOH, including Family Health’s Phase 1 and VIGISUS; and (iii) the new procedures and routines, including the mandatory use o f SIAFI for the f low o f funds for projects financed by multilateral development agencies, as determined by Secretaria do Tesouro Nacional in February 2004.
The overall objective o f the assessment was to ensure that the borrower has, or will have, acceptable financial management arrangements in place by loan effectiveness. These include, but are not limited to, capacity to: (a) properly manage and account for al l program’s proceeds, expenditures and transactions; (b) produce timely, accurate and reliable program financial statements and reports, including Interim Financial Reports (IFRs), for general and Bank special purposes; (c) safeguard program’s assets, (d) timely engage independent auditors acceptable to the Bank; and (e) disburse Bank funds in accordance to applicable Bank ru les and procedures.
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The assessment was carried out joint ly with the DAB, and DENASUS - MOH’s internal audit department - staff. It included: (a) an evaluation o f existing financial management systems in place to be used for program monitoring, accounting and reporting, taking into account phase’s 1 weaknesses and areas for improvement; (b) review o f staffing requirements, including training, with particular attention being paid to capacity building at the municipal level; (c) discussion and adjustments on the f low o f funds arrangements and disbursement methodology; (d) review o f internal control mechanisms in place; (e) discussion in regard to reporting requirements, including the format and content o f IFRs; and (f) review o f internal and external audit arrangements.
Staffing - The DAB will be adequately staffed with a project financial manager and experienced financial management and disbursement staff.
Reporting and Monitoring - The first-phase Financial Monitoring Reports (FMRs, now known as IFRs -Interim Financial Reports) will be reviewed and adjusted to take into account the procedures and routines, in particular the new f low o f funds for projects financed by multilateral development agencies, set by Secretariu do Tesouro Nucional. IFRs will cover the entire project, o f which the Bank financing is only a small fraction, showing the Bank and counterpart’s contribution.
I t has been decided to use quarterly Interim Financial Reports for project monitoring purposes, while disbursements will be made on the basis o f transactions: Statements o f Expenditures - SOEs and Summary Sheets, and Customized Statements o f Expenditures as applicable. IFRs can be used as year-end project financial statements; the fourth quarter IFR may be used as the basis for the annual financial audit.
As part o f the financial module o f the IFR, every six months reports, in Brazilian Reais, will provide the fol lowing information:
Report: IFR I A - Sources and Uses o f Funds, by disbursement category, cumulative (project-to- date; year-to-date) and for the period, showing budgeted amounts versus Customized SOEs and SOEs reported to the Bank, including a variance analysis; a breakdown by funding source i s recommended. ZFR I B - Sources and Uses o f Funds, by disbursement category, cumulative (project-to- date; year-to-date) and for the period, showing budgeted amounts versus actual expenditures, (Le,, expenditures documented from municipalities and states and SOEs), including a variance analysis. IFR I C - Uses o f Funds by Project Activi ty or Component, cumulative (project-to-date; year-to-date) and for the period, comparing budgeted with actual expenditures, by financing source, including a variance analysis. IFR I D - Customized SOEs to each and al l Municipalities and States.
I t i s important to note that for disbursement purposes, the Project will use Customized SOEs and SOEs that do not provide detailed information regarding the expenditures paid using project financing. However, the annual audit o f the Project will review documented eligible expenditures. Therefore, it i s very important that DAB monitors the
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overall - Bank and Government’s resources - project performance from a financial management point o f view. Therefore DAB will, routinely monitor:
- plannedbudgeted figures; - - - -
amounts transferred to municipalities and states; actual expenditures reported by municipalities and states; reallocation o f unspent balances; and reconciliation between amounts transferred, actual expenditures reported by municipalities and states, and eligible expenditures (procurement eligibility criteria defined in Annex 8, and positive lists).
In addition to the strengthening o f MOH’s internal control procedures - regular supervision o f states and municipalities; independent review o f sub-national implementation o f projects activities to be financed through Component 3; quarterly jo int Bank and M O H monitoring o f recipients’ reporting status and related triggers - comfort to the Bank with regard to the eligibility o f expenditures financed by the Bank will be provided by auditors on their annual report.
Taking into account that the Bank will finance only a small share o f a large ccpoolyy o f eligible expenditures, auditors’ opinion on annual financial statements will need to review documents and other evidence showing, to the satisfaction o f the Bank, that the Bank financing has been spent or i s available to be spent on eligible expenditures.
Accounting Basis, Procedures and Policies - Project financial statements will be prepared, on a cash accounting basis, quarterly and annually. These statements will be prepared in accordance with consistently applied accounting standards as per relevant Brazilian legislation - L a w 4.320, acceptable to the Bank.
Supervision - Financial management supervision will take place every six months and include a: (a) review o f semester IFRs, paying special attention to any relevant discrepancies between transfers and actual expenses; (b) re-evaluation o f the financial management risk assigned to municipalities and, to a lesser extent, states; (c) review o f the auditors’ reports and follow-up on issues raised by auditors in the management letter, as appropriate; (d) participation in project supervision; (e) fol low up on any financial reporting and disbursement issues; and (0 update o f the financial management rating in the Implementation Status Report (ISR).
Every quarter, immediately after receiving the quarterly FMR, the Bank and M O H will joint ly review the state’s and municipalities’ reporting situation and, with inputs from the independent review o f sub-national implementation o f projects activities, agree on any corrective measures.
Flow o f Funds - Federal level operations financed by multilateral development agencies follow, since February 2004, standardized and simple procedures. Secretaria do Tesouro Nacional, (STN) commits funds and upon instruction from the relevant executing agency, makes advances for the implementation o f proj ect activities. These procedures have to be recorded and processed through SIAFI.
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With the Government o f Brazil pre-financing project expenditures, the Bank will reimburse the Borrower against withdrawal applications supported by Customized Statements o f Expenditures - for most o f the Project - and Statements o f Expenditures.
Under Municipal Subprojects and State Subprojects, the M O H will make payments against approved earmarked purchases entered into the SGP system by municipalities and/or states .
Based on the POA - Plano Operativo Anual, (Annual Operating Plan) and in l ine with an approved positive l ist, municipalities and states with eligible subprojects - those that meet the eligibility criteria as per the Operational Manual - will enter data, per line item, in the SGP to request the financing o f specific goods, works, services and incremental operating costs. DAB technical staff will review the municipality or state’s request, and will take into consideration any unspent balances, adjusting the transfer accordingly. Upon instructions from the MOH, amounts will be transferred from the Fundo Nacional de Sazide (FNS) - National Health Fund, to Municipal or State Health Funds, into a specific bank account o f the relevant municipality or state.
I t should be noted that, similarly to the Bank, the Federal Government considers the amounts transferred to the sub-national level as expensed once the transfer i s made. The money flows from Fundo Nacional de Sazide to Fundos Municipais de Sazide and Fundos Estaduais de Sazide, in what i s commonly called fund-to-fund-transfers. At the municipal level a new bank account will be open specifically for the project, facilitating the work o f MOH’s internal control visits.
The norm stipulates that a first and second transfer can be made without any accounting for the advances; however, a third transfer would only occur with the settlement o f the first advance. Although evidence from the f i rst phase (Family Health 1) may suggest that this norm i s not being strictly followed, agreement needs to be reached with the client with regard remedial actions for poorhon performers. Monitoring o f compliance with the norm will be carried out every quarter and properly followed up by M O H staff.
Project activities to be implemented at the federal level by the M O H will fo l low S T N procedures - including standard f low o f funds arrangements - and will be recorded in the SIAFI system.
Disbursements - Bank disbursements will be made on the basis o f transactions, using Statements o f Expenditures (SOEs) and Customized Statements o f Expenditures. Withdrawal applications will be prepared, exclusively in Reais, by DAB and submitted to the Bank by Secretaria do Tesouro Nacional for reimbursing o f pre-financed eligible expenditures. Since there will be no advances made, the use o f a Special (Designated) Account i s not foreseen at this stage.
It i s expected that withdrawal applications be prepared and submitted on a regular and timely basis, reducing any gap between project implementation and reporting to the Bank.
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Customized SOEs will be used to document transfers to municipalities and states, DAB will provide as supporting documentation for withdrawal purposes, a l i s t o f Ordens Banchias generated by SIAFI, to which the respective Bank’s financing percentage would be applied. Customized SOEs will be used for following disbursement categories: (i) Municipal Subprojects; and (ii) State Subprojects. The other disbursement categories will fol low standard Bank procedures and be based on SOE and Summary Sheets for payments for contracts above the Bank’s SOE/prior review thresholds.
The thresholds requiring supporting documentation to be attached to the SOE are as follows: payments for: (i) Consultant services under contracts exceeding the equivalent o f US$200,000; (ii) Goods under contracts exceeding the equivalent o f US$500,000; and (iii) Non-consulting services, training and incremental operating costs exceeding the equivalent o f U S $ l 00,000
Auditing Arrangements - Annual project financial statements, covering the whole project, will be audited by independent auditors, satisfactory to the Bank, in accordance with acceptable auditing standards. In principle, the Secretaria Federal de Controle, an entity duly recognized by the Bank, will undertake the project’s annual financial audits. The external audit will be conducted in line with Terms o f Reference acceptable to the bank and auditors will be required to issue a single opinion on project’s financial statements, as per the guidelines “Annual Financial Reporting and Auditing for World Bank-financed activities”, o f June 30, 2003. Auditors will also have to produce a management letter, where any relevant internal control weaknesses will be identified and properly followed up by DAB, contributing to the strengthening o f the control environment, by focusing on processes related with the monitoring and reporting from sub-national implementing agencies.
The second semester’s IFR will be used for auditing purposes and should include notes to the financial statements, disclosing any additional information. The auditors should have access to al l supporting records and make on site examination. The auditors would perform at least one interim inspection per year in order to promptly identify areas that require attention o f the project’s management. Such reviews will timely identify problems related to accounting or/and internal control. After each interim visit a memorandum on internal controls (management letter) should be produced to ensure that corrective actions are addressed prior to year end.
The auditor’s report will be submitted to the Bank no later than six months after the closing o f the borrower’s fiscal year.
Based o n Family Health 1 experience and given: (i) the small bank financing share o f overall eligible project costs, and (ii) the strengthened internal control system, there i s no need to have additional, specific, audit requirements. Audit TORS will require auditors to issue a single opinion on project financial statements; agreement will be reached with the auditors with regard to a representative sample o f states and municipalities.
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Financial Management Risk Assessment
i. Country specijk
ii. Sub-national level
The Risk Assessment Matrix below presents the items o f potential risk for the Project from a Financial Management standpoint.
X
The overall Financial Management risk is considered moderate.
Table 1 - Financial Risk Assessment
iii. Entity specijk
iv. Project specijk
Risk I H I S ( M I L ( Mitigators
X
X
Inherent Risks
X -
i. Implementing Agency
ii. Flow of Funds
iii. Staffing
iv. Accounting procedures
v. InternaUExternal Audit
vi. Reporting & Monitoring
vii. Information Systems
H-High S-Substantial
SGP system; establishment of training, supervision and reporting routines
DAB/MOH to be strengthened in terms of human resources
Focus on M&E once the DAB/MOH is adequately staffed
Follow-up actions and remedial actions to be implemented;
DAB/MOH to be strengthened in terms of headcount; municipal/state level staff to be trained in the operation of the system
Need for States and municipalities to accouni for actual expenditures on more timely and regular basis;
SFC 3 capacity to confirm to the Bank the eligibility of at least the amounts disbursed through Customized SOEs ( i n addition to the standard opinion on projects Financial Statements) remains questionable; engagement and capacity of DENASUS sti l l uncertain
More frequent visits from DAB/MOH stafi performance targets to be agreed; schedule o visits to be followed (eventually with Bank financing)
L-Low
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Financial Management Action Plan. The following recommended actions are mitigating measures in a fiduciary framework that i s evolving positively but s t i l l presents weaknesses and several areas for improvement. I t should be emphasized that, given the disbursement methodology adopted, in particular for the Customized SOEs disbursing categories, these measures will not fully guarantee a completely accurate cut-off, meaning that there is s t i l l a reasonable chance that loan proceeds may finance the purchase o f goods, works and services to be delivered and rendered after the closing date. The action plan matrix below allocates responsibilities, targets and a time frame for the rolling out o f the financial management action plan:
Action
1. Ascertain that transfers are made on the basis o f knownlcontracted amounts
Responsible
D A B M O H
2. M&E staff increased to comply with 1/10 ratio ( one staff for no more than 10 municipalitieshtates )
3 . Agreement on a risk analysis o f municipalities, based on SFC’s assessment; consultants’ F M risk assessment and municipalities’ reporting status
DABMOWWor Id Bank
World Bank/DAB
4. Standardization o f reporting routines, as per PWC recommendations: (i) minimum frequency to be agreed; and (ii) standard format and content; bank account statements to be sent to DAB.
M O H
Consequences/Impact
Operations Manual
-
Staff and traveling costs to be financed through Component 3; Loan Agreement.
-
Operations Manual - triggers: 80 percent or less o f advances unaccounted for or ‘High Risk” recipients: follow-up with M O H supervision and training.
Operations Manual - standard forms to be designed and frequency o f reporting to agreed upon;
By/Deadline
Effectiveness
On-going; situation to be assessed by effectiveness
Completed
Effectiveness
Comments
Operations Manual to be adjusted and adopted by effectiveness
Increasing the number o f staff members should start during Phase 1.
Purpose i s to agree on those municipalities that require high priority in terms o f supervision and capacity building
Goal i s to have a common reporting format, content and routine; may also benefit MOH’s supervision work.
J
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Action
5. Audit Plan.
6. Discontinuing the fund-to-find transfers two months prior to the closing date.
7. Quarterly joint review of municipalities’ reporting status
8. Agreement on remedial actions (to be finalized during appraisal )
Responsible
World BanklSFCiDAB
DAB
DAB/World Bank
DAB/World Bank
Consequences/Impact
Satisfactory TORS for the Bank and SFC; minimum sample to be agreed - no less than 25 municipalities and 5 states plus the inclusion of Family Health 2 Project as part of the audit work under the monthly municipal “lottery”.
Loan Agreement and Disbursement Letter.
Operations Manual
Operations Manual
B y/Deadlhe
Completed
Negotiations
Every quarter during project implementatio n
Negotiations
Comments
Mitigate the risk of inaccurate project cut-off
Re-definition of supervision and capacity building priorities.
Agreement on basic remedial action - suspension of transfers to municipalities when less than x has been accounted for or no reporting for more than x months.
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Category Amount of the Loan Allocated (Expressed in Dollars)
1. Goods and non-Consulting Services”’; 11,100,000 Consultant Services; and Training 108 (except for Municipal Subprojects, and State Subprojects) 2. Municipal Subproject Transfers and 55,000,000
YO of Expenditures for which Loan Account withdrawals can be made
100%
100%
lo’ Non-consulting services mean, inter alia, printing services, production o f videos, communication campaigns and communication costs.
Training means expenditures (other than for consultants’ services) incurred in connection with the carrying out o f training, seminars, and workshops under the Project, including the reasonable travel cost, per-diem, lodging and transportation for trainers and trainees, as well as training materials and living expenses for students. log Incremental Operational Costs mean the following management and supervision costs incurred by MOH, to the extent they would not have been incurred absent the Project, including: (i) MOH’s fiduciary and operational staff assigned to the Project; and (ii) travel expenses (per-diem, lodging and transportation), other than for training purposes.
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Allocation of Loan Proceeds
Prior Review Consultants disbursed by MOH’s Fund under each Municipal Subproject Agreement
3. State Subproject Transfers and Prior
Fund under each State Subproject Agreement
5. Font-end-Fee
Review Consultants disbursed by MOH’s
4. Incremental Operational CostslUY
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12,450,000 100%
3,500,000 100% 208,625 Amount payable
pursuant to Section
6. Premia for Interest Rate Caps and Interest Rate Collars
7. Unallocated Total Loan Proceed
0 Amount due under Section 2.07 (c) o f this
Agreement 1,191,375
83,450,000
Annex 8: Procurement Arrangements BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
A) General
Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004, and revised in October 2006; and “Guidelines: Selection and Employment o f Consultants by World Bank Borrowers” dated M a y 2004, and revised in October 2006, and the provisions stipulated in the Legal Agreement. The general description o f various items under different expenditure category is described below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan would be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
A.1) Brazil’s Procurement Legal Framework and Procurement Practices
The Brazilian Procurement Law, L a w 8,666/93, provides the legal framework on procurement and i s complemented by other procurement laws. The 2004 Country Procurement Assessment Report (CPAR) reviewed Law 8,666/93 and concluded that the L a w provides a sound legal framework to carry out procurement. L a w 8,666/93 has specific provisions that allow the application o f the Bank’s procurement regulations (the Guidelines). Concerning the other procurement laws, Law 10,191/01 allows the M O H to purchase health goods through registro de preqos (framework contracts) and Presidential Decree 3,931/01 (modified by Decree 4,342/02) expands the use o f registro de preqos to the purchase o f any goods and services by the Federal Government. In addition, Law 10,520/02 (the Preggo Law) provides for an additional procurement method (pregdo) widely used for the procurement o f goods and services.
Consequently, the procedures o f competitive procurement methods under L a w 8,666/93 (concorr&ncia, tomada de preqos, and convite), the procurement method known as pregdo eletrbnico under Law 10,520/02, and registro de preqos under Decree 3,93 1/01 and Law 10,191/01 would be acceptable methods for NCB. The Bank’s Guidelines’ provisions would apply to al l other aspects o f the procurement carried out under the Project.
The procedures for selection o f consultants, including single-source selection, and for direct contracting o f procurement o f goods and works described in the Bank’s Guidelines would govern the respective procurement processes.
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A.2) Procurement o f Goods, Works, and Non-consulting Services
Goods
A.2.1) Components 1 and 2 (SWAP)
x < 500 NCB
x < 100 NCB or Shopping or pregzo
Goods procured under components 1 and 2 would include, inter alia, books, periodicals, publications, instructional materials, I T C and electronic equipment, software, medical and dental care equipment and furniture, vehicles (except ambulances).
Non-consulting services
Works procured would include: construction and rehabilitation o f basic health care facilities.
x < 500 NCB
x < 100 NCB or Shopping or pregzo
Non-consulting services would include: telecommunication services; printing services; logistics for seminars and workshops; rental o f facilities and vehicles; and travel expenses.
Training expenditures would include contracts for logistics, travel expenses for trainers and trainees (including transportation, per diem, and lodging), training material. These expenses would be procured using the implementing agency's administrative procedures, which were reviewed and found acceptable to the Bank.
N o I C B i s expected under the SWAP components.
Under NCB, SEAIN'S SBD agreed with the Bank should be used for the methods under L a w 8,666 and the COMPRASNET/Banco do Brasil's SBD agreed with the Bank should be used for Prega"o EletrGnico.
For small value goods, works, and non-consulting services, Shopping would be used. As an alternative to Shopping, the method known as Pregfio - as defined in Brazil's Law 10,520 o f July 17,2002 - could also be used.
A.2.2) Component 3
Goods procured under this component would include IT equipment and software.
Procurement o f works i s not expected under this component.
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Non-consulting services would include logistics for seminars and workshops, printing services, video production, communication campaigns, and telecommunication costs.
Contract Type
Goods
Training expenditures would include contracts for logistics, travel expenses for trainers and trainees (including transportation, per diem, and lodging), training material. These expenses would be procured using the implementing agency’s administrative procedures, which were reviewed and found acceptable to the Bank.
Contract value Procurement method (US% thousands)
x < 5,000 NCB
x < 100 NCB or Shopping or pregEo
N o I C B i s expected under this component.
Non-consulting services I
Under NCB, SEAJN’s SBD agreed with the Bank should be used for the methods under L a w 8,666 and the COMPRASNETBanco do Brasil’s SBD agreed with the Bank should be used for Pregfio EletrGnico.
x < 5,000 NCB
x < 100 NCB or Shopping or pregEo
For small value goods, works, and non-consulting services, shopping would be used. As an alternative to Shopping, the method known as Pregfio - as defined in Brazil’s L a w 10,520 o f July 17,2002 - could also be used.
A.3) Selection o f Consultants
Consulting services under Components 1 and 2 would be required for strengthening states’ and municipals’ management capacity; developing monitoring and evaluation tools; creating or refining information systems; and for training activities. Special provisions for the hiring o f training are provided below.
Consulting services provided by f i r m s under Component 3 would be required to prepare, inter alia, cost analysis and control systems; health protocols; advanced academic degrees in Family Health; distance learning courses; studies and researches; quality programs; capacity building; and assessments. Consulting services would also be necessary to assist the participating states and municipalities in the elaboration o f result- based management plans; and monitoring and evaluation plans. Short l i s ts o f international consultants (for services estimated to cost less than US$500,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines) are not expected under the Project.
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Consulting services estimated to cost US$200,000 or more would fo l low QCBS procedures. Other methods would be used if the requirements o f the Guidelines were met.
Contract Type Contract value (US% thousands)
Consulting services x 2 200 (firms) 100 5 x < 200
International and national individual consultants would be hired to provide technical assistance to the MOH, states and municipalities for the implementation, supervision, and monitoring o f project-related activities. The procedures o f Section V o f the Guidelines would apply. The key staff for project management and coordination would be selected under terms and conditions acceptable to the Bank.
Procurement method
QCBS
QCBS/LCS/FBS/CQS
I x < 100 I QCBSLCS/FBS/CQS/SSS I I Individual consultants I x > o I IC I A.4) Additional Provisions
Goods, works and non-consultant services under Components 1 and 2 shall be procured in accordance with these additional following provisions:
(a) evaluated bidder, and the lowest bidder should not be disqualified without sound reasons therefore.
(b) be maintained by the Eligible Municipality or the Eligible State, as the case may be.
(c) the carrying out o f reviews o f i t s procurement actions, including independent procurement reviews.
(d) decisions emanating from any one o f the governmental control institutions or the judicial branch (at the Federal, State or Municipal levels), identifying a case o f misprocurement, shall be deemed by the Bank as constituting sufficient evidence o f a local determination regarding misprocurement (without the need to have such decision confirmed by any other such institution or branch).
In competitive bidding procedures, contracts shall be awarded to the lowest
Records and information pertaining to the bidding and award o f contracts shall
The Eligible Municipality or the Eligible State, as the case may be, shall enable
In case o f expenditures procured in accordance with the Procurement Law, the
AS) Living Expenses
Living expenses would be awarded to selected professionals based on criteria that are acceptable to the Bank, to be described in the Operational Manual.
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A.6) Incremental Operational Costs
These costs refer to the reasonable costs o f coordination and management o f the project, including the fiduciary and operational staff, and travel expenses (per diem, lodging and transportation). These expenses would be procured using the implementing agency’s administrative procedures, which were reviewed and found acceptable to the Bank.
B) Assessment o f the agency’s capacity to implement procurement
Procurement activities would be carried out by the Ministry o f Health under Component 3, and by participating states and municipalities under Components 1 and 2.
Ministry of Health. The M O H has for a long time been one o f the largest agency executing highly decentralized Bank projects, such as AIDS 1, 2, and 3 VIGISUS 1 and 11. Both the MOH’s bidding committee and the contract and legal advice departments (consultoria juridica) are familiar with the Bank’s Guidelines, and the respective methods, procedures, and bidding documents. Recent post reviews have indicated that delays and problems in procurement processing occur when there i s the intervention o f a procurement agent. As the M O H would not require the assistance o f such agency, the risk i s rated as low.
The proposed actions would be: (i) the hiring o f a procurement specialist - whose TOR and C V must be acceptable to the Bank; and (ii) the participation o f the bidding committee’s and contract and legal advice departments’ members in procurement training to be delivered by the Bank.
States and Municipalities. The states and municipalities have been assessed in March 2006 by the MOH’s team, following a methodology developed under the lSt Phase, which was also agreed by the Bank then. According to such assessment, o f the 27 states, 13 are l o w risk, 12 are average, and 2 are high. O f the 196 municipalities assessed, 50 are l ow risk, 116 are average, and 30 are high.
At the end o f the f i rs t 18-month project implementation period, the Ministry o f Health would update the states’ and municipalities’ capacity assessments. The capacity assessment methodology for this update must be reviewed and agreed with the Bank prior to making the new assessments. The MOH’s procurement specialist would need to validate al l the assessments, and by the Bank in those cases where the Bank led the assessments.
The main issues and risks concerning the procurement component for implementation o f the Project have been identified and include lack o f familiarity with the Bank’s procedures, inadequate procurement planning by high risk states and municipalities, difficulty to provide technical assistance to and to supervise states and municipalities, difficulty to identify goods purchased under the Project at state and municipal levels, and
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lack o f Project management at the municipal level. The risk mitigating measures which have been agreed are:
Strong supervision arrangement: in addition to the fiduciary and operational consultants; the M O H would also hire technical assistance to supervise and to assist project implementation at state and municipality levels. Strengthened procurement supervision: the M O H would provide specialized training to the consultants on procurement (including Bank’s and national procedures) to increase their ability to supervise project implementation. Strengthened state subproject supervision: The M O H would provide technical assistance (through individual consultants) to each state to enable them to discharge their responsibilities under the project. Capacity building: the M O H would offer two large training events to participating states and municipalities. The f i rst one would be delivered by no later than 1 month after states and municipalities have been selected and would present the whole Project (including fiduciary aspects) to the Project coordinators and legal advisors o f al l selected states and municipalities. The second event would focus on procurement procedures (Bank’s and national) that need to be followed by the participating states and municipalities, and it would be mainly targeted at bidding committees and legal advisors o f high and average risk states and municipalities. All states and municipalities would be required to identify an officer responsible for the Basic Care Coordination and an officer responsible for the Family Health Project within such Coordination.
The overall project risk for procurement i s average.
C) Procurement Plan
The Borrower will develop a Procurement Plan for implementation o f Component 3 o f the project, which will provide the basis for the procurement methods and prior review thresholds. This plan will have been agreed between the Borrower and the Project Team by negotiations and will be available in the Project’s database and in the Bank’s external website. The Procurement Plan would be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
A Procurement Plan for the SWAP Components (1 and 2) would not be required. As the loan funds would be pooled with government funds, the proposed Project would apply a “positive I is t “ approach to procurement planning to identify (a posteriori) the contracts that would be eligible for Bank financing. T o complement procurement eligibility requirements o f such list, the Bank would only finance contracts below N C B thresholds, in accordance with the provisions described above.
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D) Procurement Supervision Plan
Non-consulting services
In addition to the prior review supervision to be carried out f rom Bank offices, the capacity assessment o f the states and municipalities has recommended annual supervision missions to visit the field to carry out post review o f procurement actions - see post review for components 1 and 2.
x < 500 NCB None
x < 100 NCB or Shopping or Pregco None
D.l) Procurement Methods and Prior-review Thresholds
Consulting services ( f i rms)
Goods I x < 500 I NCB I None
x 2 200 QCBS A l l processes
A l l processes QCB S L C S/FB SICQS 100 5 x < 200
I x<100 I NCB or Shopping or Preco I None
Non-consulting services
x < 5,000 NCB None
x < 100 NCB or Shopping or Pregrlo None
Consulting services (firms)
I x<100 I sss I None
x L 200 QCBS A l l processes
QCBS/LCS/FBS/CQS A l l processes 1 0 0 I x < 2 0 0
Individual consultants I x > o I IC I None
COMPONENT 3 Contract value
Works
I x<500 I NCBorShopping I None
Goods 1 x<5,000 1 NCB I None
I x < 100 I NCB or Shopping or Pregao I None
I x<100 I sss I None
Individual consultants 1 x > o I IC I None
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D.2) Post Review for Components 1 and 2
The Bank would annually post review a sample o f high, average, and l o w risk procurement scheduling for states and municipalities. Within that sample, the Bank would review the capacity assessments o f a few selected states and municipalities in situ during field visits.
D.3) Post Review for Component 3
The Bank would annually post review a sample o f at least 10 percent o f the contracts signed by the Ministry.
D.4) Independent Procurement Audits for Components 1 and 2
In addition to the prior and post review supervision to be carried by the Bank, the Ministry must also ensure that procurement audits are carried annually, to be delivered by no later than June 30 o f each year, under Terms o f Reference acceptable to the Bank. This audit should cover a sample o f 20 percent o f the high risk states and municipalities, 10 percent o f average risk states and municipalities, and 5 percent o f the l o w risk states and municipalities, focusing on checking the conformity o f the procurement carried out following national legislation and on physical inspection. This audit would be conducted by an independent consultant - Secretaria Federal de Controle (SFC) or any other institution acceptable to the Bank). In case it is not SFC, the selection process to hire this independent auditor would be subject to the Bank’s prior review, irrespective o f the contract amount.
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Annex 9: Economic and Financial Analysis BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Summary
This annex presents the results o f the cost-benefit analysis o f Phase I1 o f the Brazi l Family Health Extension APL Program (PROESF II), based upon the project's costs and the measurable economic benefits f lowing from the successful implementation o f the proposed project. Phase I1 will be implemented over a three year period, f rom July 2008 through mid-201 1. PROESF I1 builds on the achievements o f the first phase o f the Family Health Extension Program (PROESF I), implemented in 188 municipalities with populations o f more than 100,000. Because PRESF I1 aims at supporting and expanding an ongoing program, the present analysis estimates the incremental costs and benefits o f the project. I t takes into account the direct project costs o f US$166.7 million, and the capital and recurrent expenditures related to the expansion and improvement o f the program. Anticipated benefits under PROESF I1 over a ten-year period point to 61,969 lives saved, and 1.38 mi l l ion productive l i f e years gained through early detection and treatment o f diseases. In addition, the Project will reduce significantly the number of hospital admissions, producing substantial savings over the medium-to-long term.
The main results for both the 3 year project duration and the longer horizon o f 10 years are summarized in Table 1. They show that the Project yields negative net benefits during i t s implementation, but over the medium-to-longer run benefits significantly outwei h project costs, producing an estimated net present value o f benefits US$745 million. The internal rate o f return (IRR) i s estimated in the order o f 47.5 percent for the longer horizon considered.
Fl 0
The MOH as well as the state and municipal health secretariats have since the mid-1990s consistently increased resources allocated to primary care and especially to PSF, both in absolute terms and as a proportion o f total budget. This support and priority given to the program, and the sustainable funding coming from the implementation and regulation o f E C 29l l1 will ensure the sustainability o f the program.
The negative NPV during the 3-year implementation o f the project are due to three main factors: (i) the initial project investment; (ii) the increase in recurrent costs associated with coverage expansion (from 35 to 41 percent); and (iii) the assumed delay o f one year between project starting and the beginning o f the flow o f benefits (the assumption i s that impact on health wi l l take one year to emerge. Negative NPVs in the early phase o f health projects are common. What i s more important i s to achieve a positive NPV during a reasonable time frame. ' I1 Constitutional Amendment (EC) no. 29 requires all levels o f government to allocate a minimum proportion o f their budget to health, thus reducing the possibility o f historical swings in health programs financing. The federal government i s required to increase budget allocation to health in the same proportion as GDP growth; state and municipal governments are required to spend at least 12 percent and 15 percent o f their tax revenues to health. A few states and many municipalities already allocate more than these percentages.
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Table 1 - Summary of Estimated Costs and Benefits o f the PROESF-I1
3 vears I 10vears NPV (US$ millions) IFtR
-259.5 744.5 47.5%
Benefit: Cost Ratio
minus total project costs (in US$ millions) Benefit: Cost is eaual to total benefits divided bv total costs
0.71 1.25
IRR was calculated based on net benefits over I O years
Assumptions
The following parameters are considered relevant in estimating the economic benefits and. costs o f the proposed project: the baseline year; the length o f the Project horizon and the time to impact the health o f the population; the size o f the target population; the existing patterns o f morbidity and mortality; the expected percentage decrease in mortality and morbidity; and the existing cost structure in the health sector. The baseline i s 2007, projected if needed from the latest year for which data are available. Impact and costs are assumed to increase throughout project duration (FY 2009-2012), and then assumed to remain constant until the end o f the 10 year horizon, with coverage constant at 41 percent o f the target population and only population growth affecting costs and benefits. The expected impact on mortality and morbidity i s derived from existing Brazilian studies whenever available, and international studies o f similar programs. Impact i s estimated by comparing areas covered by PSF (or similar programs) and those not covered by the program. The expected reductions in mortality are then used to estimate gains in productive l i f e years and economic benefits over the periods o f 3 and 10 years. Since these assumptions are quantified for only a few proxy variables rather than the full range o f interventions and effects, and the Project horizon i s only 10 years, results are conservative.
The analysis uses the following assumptions to measure the direct and indirect benefits:
Project impact will be measurable with one year delay, i.e., from 2009 onwards; Infant mortality rate reduced by 2.8 percent over the two-year project duration ‘12;
Maternal mortality rate reduced by 6.2 percent ‘13;
Mortality from diabetes mellitus reduced by 6.2 percent ‘14;
Based on Macinko J, FC Guanais, MdeFM de Souza, 2006, An Evaluation of the Impact of the Family Health Program on Infant Mortality in Brazil, 1990-2002. New York University, pending publication. This study found a reduction in infant mortality o f 4.6 percent for each 10 percent increase in PSF coverage.
The target rates for the reduction o f the main causes o f mortality are based on the average reduction rates calculated for the period 1998-2000, from the study o f Sulamis Dain et al. The municipalities considered in the study are taken like a benchmark reference. ‘I4 Based on results documented in Jamison and Feacham’s seminal work on “Disease Priorities in Developing Countries.” The collection o f papers in this work document the effect o f similar programs in terms o f reductions in mortality and morbidity; in addition, the papers include estimates o f the cost- effectiveness o f similar programs.
I12
I I 3
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0 Mortality from infectious and parasitic diseases reduced by 6.2 percent; Mortality from circulatory diseases would be reduced by 6.2 percent;
0 Mortality from respiratory diseases would be reduced by 6.2 percent; 0 Mortality from malnutrition would be reduced by 6.2 percent; 0 Hospitalizations for acute respiratory infections (ARI) among children under 5
0 Hospitalizations for diarrhea among children under 5 years o ld reduced by 19.9
Hospitalizations for stroke among individuals over 40 years old reduced by 3.4
0 Hospitalizations for congestive cardiac insufficiency among individuals over 40
Hospitalizations for intra-cranial hemorrhages, cerebral infarction, and CVA not
Hospitalizations for hypertension and other related diseases reduced by 1 1.5
0 Hospitalizations for respiratory diseases reduced by 3.7 percent; 0 Hospitalizations for diabetes mellitus reduced by 5.4 percent;
The average cost o f hospitalization is US$924;"'; 0 The average value o f a productive l i f e year i s US$4,747;"*
Recurrent project costs estimated at US$5.46 per person covered per year;"' 0 Discount rate o f 10 percent.
years old reduced by 6.4 per~ent;''~
percent;
percent;' l6
years old reduced by 0.9 percent;
specified reduced by 1.6 percent;
percent;
These assumptions are based on a detailed study o f the implementation o f the primary care model and o f the comparison between municipalities that implemented the family medicine program and control municipalities where the program had not been implemented. The parameters are consistent with international literature on similar projects. In the fol lowing sections, these assumptions are used to evaluate the benefits o f the Project and to assess the economic impact o f the project. Base and target values for each cause o f mortality and morbidity are summarized in Table 2.
'15 Based on a M O H study o f 10 municipalities targeted with PSF and a control group o f 10 municipalities (MS/SAS/DAB: Comparaqlo de duas amostras de municipios participantes e ngo participantes do proesf em relaqlo ao desempenho em alguns indicadores de incentivo. 2006).
Based on MOH comparison o f municipalities with 50-70 percent PSF coverage with those with < 20 percent coverage (MS, 2006: Saude da Familia no Brasil - Uma anklise de indicadores selecionados, 1998- 2004).
Based on Planisa's study on the cost o f 107 hospital procedures, 2002. Mean cost for hospital admissions for conditions similar to those considered here were adjusted for inflation to 2007 and then converted into USD.
Based on IBGE's mean per capita income in 2005, adjusted for inflation to 2007 and then converted into USD.
Based on the FGVEPOS study on PSF costs: Projeto REFORSUS - CNPQ "Determinaqlo e avaliaqlo do custo do Programa de Saude da Familia - PSF", 2001; figures were adjusted for inflation to 2007 and converted into USD.
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11s
119
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Table 2 - Base and target rates for mortality and morbidity 1 Base:2007 I Target: 2010 I YO Change
Summary of Costs and Benefits
The cost-benefit analysis estimates the benefits over the Project duration and the 10 year time horizon in two major groups: direct and indirect benefits. The direct benefits are the expected benefits accruable to the Project from the reduction in costs due to a decline in the number o f hospital admissions for the main conditions affected by the project. Indirect benefits are related to the benefits obtained from additional productive life-years for the population o f the targeted municipalities.
The Project focuses on large urban areas o f Brazil, which are characterized by weak public health care systems, and large numbers o f families in extreme poverty, confronting severe social risk. O f the 223 municipalities with populations o f 100,000 or greater at the Project inception, 188 will participate in phase two o f the project. These municipalities have a total population o f 93.4 mi l l ion people in 2007, or 49.3 percent o f the country’s population. The cost-benefit analysis assumes that the Project will benefit the population o f the 188 participating municipalities covered by the project; coverage i s assumed to start at 35 percent in 2007 (up from 33 percent in 2005), corresponding to 32.7 mi l l ion people, and increase to 41 percent by 2010.’20 This expansion will add over 7 mi l l ion people to the program’s coverage over 3 years.
Implementation costs: The analysis considers two basic elements: (i) the investment costs o f the Government and World Bank project; and (ii) the recurrent costs. The total investment cost o f the PROESF I1 Project i s US$166.7 million, with the World Bank and
IZo Whenever available, mortality and morbidity indicators are taken for the target population rather than the total population, using detailed, municipal-level data from MOWDATASUS.
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the Government o f Brazi l financing 50 percent each. The total recurrent costs o f the Project would reach US$2.6 bi l l ion a year once the target coverage is reached in 2010. It increases with coverage during the Project duration and then with population growth for the rest o f the period Only incremental recurrent costs associated with coverage expansion and sustainability in face o f population growth are considered in the analysis, and amount to US$928 mi l l ion (undiscounted) between 2008 and 2010.
Present Value Of
Total Project costs
Direct Benefits: Savings in hospitalization costs are among the most important direct benefits o f the project. These savings are associated to: (i) avoided hospital admissions due to reductions in morbidity; (ii) avoided admissions due to greater effectiveness at primary care facilities, allowing a significant proportion o f conditions presently treated in hospitals to be treated at lower cost at ambulatory facilities; and (iii) reduction in risk factors in the target population that increase the demand for hospitalizations. Available data do not permit separation o f these effects. Overall, the Project i s expected to avoid 264 thousand hospital admissions over the 10-year horizon, at a total cost o f US$244 million.
Present Value of Present Value o f Net Present Direct Benefits Indirect Benefits Value
Indirect benefits: Indirect benefits are calculated by multiplying the expected productive l i fe years gained from mortality reduction and the value o f mean per capita earnings per year. L i f e years saved are estimated for each cause o f mortality impacted by project interventions by taking the difference between the mean age o f death and the legal age o f retirement (assumed for simplicity reasons to be 65 for both men and women). Table 3 summarizes the results o f the analysis. The savings associated with patients' time spent during hospital admissions for children, not included in the calculations because o f their little relevance in face o f other benefits, represent an additional US$2.5 mi l l ion over the project's l i f e o f 3 years.
2008 181.82 I 0 1 0 1 - 181.82 2009 305.89 I 7.25 I 204.73 I - 93.90 2010 394.21 15.16 395.23 16.19
2012 329.33 I 18.69 I 501.79 1 191.15 2013 316.79 I 17.18 I 461.43 I 161.83 2014 303.51 15.80 424.17 136.46 2015 289.75 14.52 389.79 114.56 2016 275.76 13.34 358.09 95.66 2017 261.72 1 12.25 1 328.87 1 79.40 TOTAL 2,999.55 I 134.50 I 3,609.59 I 744.54
BenefitKOst Index 1.25
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Sensitivity Analysis: Risk Analysis
Table 4 - Summary of Sensitivity Analysis for the 10 year horizon NPV IRR
(US$ million) (%I Type o f Sensitivity Analysis
Base case 744.54 47 2 years delay 135.63 6 20% reduction in benefits - 4.28 0 35% reduction in benefits - 565.89 6% discount rate 1,000.82 39
While the above results are meaningful, it i s important to test the robustness o f the results with regard to potential delays, reductions in benefits, or assumptions validity. This is done through the use o f sensitivity analysis assuming: (i) delays o f two years in project implementation; (ii) reduction in benefits o f 20 and 35 percent; and (iii) use o f a more conservative (6 percent) discount rate. There have not been important delays in project implementation during Phase I, but possible funding bottlenecks may postpone implementation and impact. The reduction in benefits may be derived from a lower than projected impact on health indicators or from reaching fewer people than assumed. Finally, discount rates tend to have a strong influence on the results o f economic analyses, and the absence o f consensus recommends including them in the sensitivity analysis. Table 4 summarizes the results o f the sensitivity analysis on the N P V and IRR for the 10 year horizon.
Delays in implementation or realization o f impact o f 2 years (of the 3-year proposed project), produce an important drop in the IRR, but s t i l l result in positive net present value. A reduction in benefits o f 20 percent erases the net benefits over the 10 year period. Overall, the Project would not be justifiable under large drops in benefits. A more conservative discount rate results in a 34 percent increase in NPV. The sizeable IRR underscores the cost-effective nature o f the program. In addition, one should keep in mind that: (i) a three year phase limits the potential impact o f the project; (ii) a 10 year horizon for a project like PROESF understates i t s long-term impact; and (iii) the variables considered here only capture part o f i t s full impact.
Fiscal Impact and Sustain ability
The sustainability analysis o f the Project i s based on the levels and trends o f public health expenditure observed during recent years, and forecasts government revenues and i t s allocation to primary health care over the duration o f the Project and i t s 10 year horizon. Following Constitutional Amendment 29, federal spending on health i s expected to increase in l ine with projected GDP growth from 2007 to 20 17, estimated at 4 percent per year. State and municipal spending are forecasted to remain at the 2005 level as a proportion o f their tax revenue, or as a minimum at the level defined in E C 29.
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Government revenue i s expected to grow at a rate lower than GDP (2.8 percent), given the strong and increasing pressure for a decrease in the tax burden.
In 2005-6, total federal health expenditure in Brazil accounted for 1.8 percent o f the GDP, or US$117.70 per capita, and i s predicted to reach US$127.07 in 2O07l2l. Total SUS (Sistemu Unico de Suzide) spending (including state and municipal expenditures) amounted to US$253 per capita in 2006. It i s important to note that there i s a trend toward the decentralization o f services provided through the public system, from the Federal level to the state and municipal levels. This decentralization is supported by payment mechanisms for transferring federal funds to state and municipal governments. In addition, decentralization and the Constitutional Amendment 29 have forced state and municipal governments to allocate an increasing proportion o f their revenue to health. However, the proportion o f federal financing has been decreasing, accounting for 47 percent o f total SUS expenditure in 2005 (down from 75 percent in 1990). Consequently, many municipalities are now spending a higher proportion o f their revenue on health (1 9 percent for the average Brazilian municipality in 2005), but additional increases may not be forthcoming. For this reason, this analysis assumes that the incremental recurrent costs o f the Project will be financed by the MOH.
Table 5 summarizes the expected fiscal impact o f the Project and illustrates i t s sustainability. By 2005, the three levels o f government were spending an estimated US$3.3 bi l l ion on PROESF at a coverage rate o f 33 percent o f the target population. Based on the current projections for health expenditures, incremental costs (investment and recurrent) to the M O H associated with the Project are estimated at US$1,012 mi l l ion during project implementation (2008-20 lo), equivalent to 22 percent o f the forecasted increase in M O H budget. That proportion will decrease gradually after project implementation, since GDP (and thus federal spending) growth rate will be higher than the increase in population in the covered areas. More importantly, project costs correspond to less than 2 percent o f the M O H annual budget.
The financial effort required to fund the Project is clearly sustainable in face o f the current and forecasted capacity o f the MOH and SUS. However, macroeconomic pressures to reduce public spending and the fact that many municipalities already spend well above the level required by EC 29 may require a strong effort at improving efficiency in resource allocation and in the provision o f health services to free up additional resources. Successful implementation o f the Project in large urban areas i s expected to contribute to this increase in efficiency, as savings are generated by treating simple conditions through the Family Health Program and preventing unnecessary hospital admissions. In addition, the project’s feasibility will require strong and sustained political support and a priority allocation o f incremental budget revenues.
These figures are based on the new series estimate o f Brazi l ian GDP and current exchange rate (down to 1,948 in 2007).
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* Total recurrent costs, financed by MOH and by state and municipal governments. Increases in recurrent costs are assumed for simplicity to be financed h l l y by MOH. Values are not discounted.
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Annex 10: Safeguard Policy Issues BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
PART 1: Key Social Issues in the Health Sector
This annex highlights some o f the key social dimensions o f the proposed Family Health Project I1 (PROESF 2), which supports the Federal Family Health Program (PSF), the Brazilian comprehensive health care program implemented by the central government through the Ministry o f Health. The annex describes the main social development issues involved in the PSF, the results o f the consultative processes undertaken during the implementation o f the program, and the expected social development outcomes o f the proposed Project and suggests actions that would pave the way to achieve such impacts. This Annex also recommends that an Indigenous Peoples Plan (IPP) i s not needed for the proposed project.
Background
Inequality in the health status o f individuals and social groups is a component o f social and income inequalities. Latin America concentrates six out o f the 12 countries with the world’s highest income inequality. Among them, Brazi l has the highest Gini coefficient (60.7). According to Voices of the Poor, for poor families in Brazi l health i s a major concern in their lives. Lack o f access to expensive medical treatment and/or loss o f a family member can be devastating. As several consultations have shown, the poor are angry and upset at their exclusion. They understand why they are ill and why they are poor, and often have ideas about what needs to be done to improve the quality o f their lives. However, they feel that those in power, including health service authorities, ignore their voices and their marginalization. In many ways, the PSF emerges as a response to the poor peoples’ demands for healthcare services.
In Brazil, the overarching health policy i s based on a European model o f universal coverage. The 1988 Constitution created the Sistema Unico de Sazide (SUS, Unif ied Health System) to secure free and comprehensive health care for all, regardless o f contribution or affiliation.
The PSF i s a means to achieve such universalization. In fact, the PSF originated from two main challenges: to carry out the fiscal decentralization mandated by the 1988 Constitution and to reach the goals o f universalization and equality in access to health services within a framework traditionally perceived to lack responsiveness to the needs o f the population.
The PSF i s a territorial program that focuses on families and communities rather than on diseases. Coverage o f families i s geographically determined. Since i t s creation in 1994, the PSF brought primary health closer to households, shifting from the traditional static health care center model (a primary health facility typically staffed with a pediatrician, an
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obstetrician and an adult clinician plus nurses and secretarial personnel) to family health teams responsible for outreach as well as facility-based services. The potential program beneficiaries are al l residents o f the unit catchment’s areas. The rationale i s to offer a type o f health care that assigns priority to preventing disease and promoting health, in addition to providing curative care, delivered either at health facilities or, whenever necessary, through home visits.
A “family health team” in charge o f up to 1,000 families or 4,500 individuals, reaches families living within boundaries o f a given area. In implementing the PSF, each team proceeds to the following steps: (a) creating and maintaining a data base (cadustro) o f families in i t s area as a reference; (b) organizing and maintaining a small group o f professionals integrated by a family doctor (a general practitioner, rather than one with specialized skills), a nurse, an attendant and five to six “community health agents”; more recently, dentists or dental technician were added to teams; (c) promoting comprehensive assistance to al l families in the area through prevention, diagnosis, treatment and rehabilitation and, if needed, referral to specialized health services, including hospitals; (d) integrating health actions with other activities in the municipality; and (e) promoting cross-sectorial preventive activities. The PSF i s in effect a reform to a program within the broader reform that was enacted through establishment o f the SUS.
Implementation o f the PSF varies regionally. As o f October 2003, according to data from the national program coordination, the Northeast region had the highest coverage - 49.8 percent. Coverage for the Midwest, South, North, and Southeast regions were 38.9 percent, 33.7 percent, 3 1 .O percent, and 26.0 percent, respectively. 122
Overall, PSF confronts several social development issues, four o f them deserving special attention since the preparation o f the Bank financed Family Health Project I: (a) poverty- based inequality in access to health services and, consequently, the inequality o f health status among different groups and areas; (b) increasing incidence o f diseases such as HIV/AIDS/STD with behavioral components, which affect disproportionately the health status o f vulnerable subgroups o f the population, such as women and homosexuals, and those socially and economically under-privileged; (c) poor reproductive health status, with declining but s t i l l high maternal mortality and teenage pregnancy rates; and (d) a declining but s t i l l prevailing emphasis on “curative” medicine, centered on hospitals and on fragmented interventions by specialized professionals.
Poverty
Several studies indicate that the PSF has modified the pattern o f consumption o f health services in the country. I t has done so by selecting the family as the main social actor, and providing these services through community-based teams. As a result, in the municipalities where the program exists, the number o f hospitalizations decreased for children and adults for almost al l diseases. In other words, the main characteristics of the
Barros, Aluisio J.D, Cesar G. Victora, Juraci A. Cesar, Nelson Arns Neumann, and Andrea D. Bertoldi (2005) Brazil: Are Health and Nutrition Programs Reaching the Neediest? HNP Reaching The Poor Program. Discussion Paper no. 9. World Bank.
122
110
PSF are adequate to improve the health status o f the poor, particularly for populations with limited access and utilization o f basic services, as it promotes comprehensive interventions; diminishes the need for hospitalizations; disseminates a concept o f health as well-being, de-linking it from diseases and hospitals; and yields the greatest improvements in maternal and child health, as compared to the core family health interventions.
Barros et a1 analyzed two studies, one carried out in the city o f Porto Alegre, where the PSF i s relatively new, and the other in the Northeast state o f Sergipe, where the PSF has been much more widely implemented. The studies conclude that though the poor are not targeted explicitly, implementation o f the PSF tends to start in the poorest areas and in those not yet covered by a primary health unit'23. The authors show that in the beginning, coverage i s l o w and poverty focus is high, as observed in Porto Alegre. With increased overall coverage, poverty focus decreases, but coverage is s t i l l higher among the poor, as seen in the case o f Sergipe.
In Porto Alegre, the program focus was estimated at 36 percent, the proportion o f the population living in the catchment area o f PSF facilities that belonged to the poorest 20 percent o f the city's residents. Considering only the actual users o f the PSF, coverage was 41 percent. An additional 28 percent o f PSF users came from the second-poorest 20 percent o f the population. Thus, in all, nearly 70 percent o f people using PSF services belonged to the poorest 40 percent o f the p ~ p u l a t i o n ' ~ ~ . In Sergipe, focus was lower than in Porto Alegre: there, 27 percent o f the residents o f areas served by the PSF were in the poorest 20 percent o f the population, compared with 36 percent in Porto Alegre. However, coverage was higher: more than 55 percent o f the poorest 20 percent o f Sergipe residents were in areas where the PSF was active, compared with only 19 percent in Porto Alegre. The same was also true at the middle and higher economic strata. Table 1 below, in the same study, shows the differences in the two areas, but the tendency o f convergence towards the poorest.
Idem. 124 Idem.
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Table 1: Family Health Program (PSF) coverage by wealth quintile for Port0 Alegre (2003)
and Sergipe (2000)’25
Wealth Porto Alegre quirttilet (2003) Sergipe (20003
All 10.8 41.1 Sowces: JA Cesar, Sergipe Study 1000, AJD Barros, Port0 Alegre PSF Study 1003.
Participatory Approaches
As an on-going program, many participatory evaluations have been carried out in relation to the PSF’s performance. For the preparation o f the proposed project, several recommendations that emerged from these evaluations were taken into consideration, including those from users’ surveys (conducted in several different cities, as Pelotas and Teresina and in several different states, as Bahia, Mato Grosse and Minas Gerais). The project design also benefited from several evaluations o f the PSF.’26
Key Issues Emerging from Consultations
During consultations the key issues that surfaced were those related to incorporating people without previous coverage into the program, relationship with health care organizations and the traditional health care model, the relationship between PSF staff and communities, the availability o f services, work conditions, team work, and preventive carel2’.
O n the positive side
*:* Access has been expanded. Many o f the persons consulted noticed a change in the approach o f health services provision. Community Health Agents have in fact expanded access through the provision o f services directly to fami l ies at home. Beneficiaries stress that before the PSF they did not have time to look for health services,
Idem. 126 See Annex 1 for a review o f the results o f these evaluations.
See, for example, Souza, Rafaela Assis de e Carvalho, Alysson Massote. Prograrna de Sazide da Familia e qualidade de vida: urn olhar da Psicologia. Estud. psicol. (Natal), sep./dez. 2003, vo1.8, no.3, p.515-523. ISSN 1413-294X; and Pedrosa, Jose Ivo dos Santos e Teles, Jog0 Batista. “Consenso e Diferenqas em equipes do Programa de Saude da Familia”, Revista de Sazide Pziblica ISSN 0034-8910, 2001.
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but now services reach out directly to them. Still, a number o f persons consulted were not familiar with the program.
*:* Multi professional teams improve work processes. Work in multi-professional teams i s considered an important aspect o f the PSF delivery model, as it involves an integral approach that i s more efficient in solving providing health care. It implies changes in the organization o f work o f the health delivery teams and in the patterns o f individual and collective activity that sup orts integration among the health care professionals and the activities they carry out. E 8
*:* Specialized attention was facilitated. When more specialized attention i s needed, Community Health Agents themselves schedule appointments. In this way, the system i s not overloaded with unnecessary demand, but patients that require specialized care have a much higher chance o f receiving it.
*:* Important results were achieved. The improved relationship between health providers and health services consumers has led to several health benefits. Among others, there is a better monitoring o f those with diabetes and high blood pressure and parents know more about health care for their children, including nutrition.
*:* Dignity and self-esteem improved. As one client mentioned, “There are some people who come to our house, this i s wonderful, no? One o f them i s a physician, a real physician who has come to my house.. .this has never happened before. Where would we go before? In the city, we needed to take buses.” focus groups in Lauro de Freitas in the metropolitan region of Salvador, Bahia, and Ilhe‘us, Bahia).
O n the negative side
*:* Unfulfilled expectations were created. The implementation o f the PSF has generated some expectations that have often gone unfulfilled. In a culture that places importance on medical interventions, medications and medical treatments, these are viewed as the only weapon to fight disease. Frustration among some o f those consulted stems from the fact that because the community agent i s not a physician he/she may not prescribe any medicine or follow-up medical interventions. In contrast, the community health agent focuses often on prevention, counseling on reproductive care or nutrition. Often, communities mistrust their community agents simply because they are not doctors.
Although they are to be equally important in delivering the family health model, some professional categories (physicians, nurses) are more valued than others (community agents). In general, those with more schooling are perceived as more valuable than those with less schooling.
e:* Hierarchy prevails among health team members.
”* Silva, A. 1.Z.Q.Jand Trada, L. A. B. “Team work in the PSF: investigating the technical articulation and interaction among professionals ”, Interface - ComunicaqrTo, Satide, EducaqrTo., v.9, n. 16, p.25-38, set.2004/fev.2005.
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Often, team members do not communicate among themselves. It was noted that doctors and nurses communicate well, but have difficulties communicating with health agents. 129
*:* Increase in the demand for coverage is difJult to control. When families realize that they have a team assigned to their houses, they often begin to “import” family members and friends from other areas, with the expectation that “the new residents” would get the same health care.
*:* The Team faces unexpected difficulties. Among physicians, the most frequent complaint is the referral process (by community agents) that often generates an overload o f patients. Nurses often felt that they have to deal with issues for which they are not prepared for, such as violence, prostitution and drugs. Community agents often fe l t that members o f their assigned families do not l is ten to them and pa little attention to their guidance on prenatal and post natal care and reproduction issues . Iyo
*:* Requirement for a new kind of physician reveals barriers in medical school training. The medical profession in Brazil i s organized in specialized fields that do not respond to the generic needs o f the PSF. The switch from specialist-focused training to that o f general practice involves overcoming barriers in terms o f extending care and in terms o f medical practice.
*:* Gender disparities. Because o f their central role within families, women and children have benefited most from the PSF. Health indicators in Brazi l improved particularly for women and children, whose fertility and mortality rates have decreased. However, teen pregnancies persist as a health problem and the incidence o f HIV/AID in women has increased. In short, gender disparities are being tackled by the program with positive outcomes, though a number o f issues s t i l l prevail. In short, gender disparities are being tackled by the program with positive outcomes, though a number o f issues s t i l l prevail.
Complementary Programs *:*
The SUS integrates three major health care programs with the PSF: the National Immunization Program (NIP), the Pre-natal Care Program’31 and the Program for Indigenous Health (VIGISUS 2).
The N I P was created in 1973 with the objective o f eradicating vaccine-preventable diseases. By 1988 vaccine coverage for illnesses included in the official vaccine- preventable l i s t was slightly above 60 percent. After efforts were made to improve the program, and in 1991 coverage was officially reported to be 90 percent or more for
Pedrosa, Jose I v o dos Santos e Teles, Jolo Batista. “Consenso e Diferenqas em equipes do Programa 129
Saude da Familia” Revista de Sazide Pziblica ISSN 0034-8910,2001. 130 Idem.
Barros, Aluisio J.D., Cesar G. Victora, Juraci A. Cesar, Nelson Arns Neumann, and AndrBa D. Bertoldi. “Brazil: Are Health and Nutr i t ion Programs Reaching the Neediest?” HNP Reaching The Poor Program. Discussion Paper no. 9. Wor ld Bank, 2005.
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measles, DPT and BCG, and 76 percent for polio. From 1994 to 2002, the total number o f doses increased from nearly 3 1 million to more than 162 million. Coverage o f individual vaccines i s high, above 95 percent for all vaccines. Since 2000, in addition to polio, measles, BCG and DPT, vaccines against hepatitis By mumps and rubella were made available through the public health services, The vaccines are freely available in public health centers and policlinics for routine vaccination o f children and the elderly. National immunization campaigns are organized regularly, with vaccination places scattered in health facilities, supermarkets, shopping malls and community centers.
In 1984, the Brazilian Ministry o f Health launched the Program o f Integral Assistance to Women's Health (PAISM'32). The PAISM i s a top-down Ministry o f Health program, in contrast to the SUS, which i s a decentralized system to the municipal level and has a horizontal implementation style. The PAISM was designed to offer comprehensive health care for women's needs at all stages o f l i fe. Over the past years, however, as PSF advances, the scope o f PAISM has decreased. The PAISM now responds mainly to women's needs during their fertility years, while most o f reproductive health care i s provided under the PSF, in accordance to the Family Planning Law.
Family Planning Law The Family Planning Law includes the following provisions:
The right to surgical sterilization (male and female) for those older than 25 years o f age and for those younger than 21 years o f age and with two living children.
Access to birth control and counseling by a multidisciplinary team with the aim o f discouraging precocious sterilization.
Prohibition o f surgical sterilization o f women during birth, immediately after birth, or after an abortion. Exceptions are granted in cases o f proven need, for example for health reasons and earlier successive cesarean sections.
The obligation for men and women to obtain their partner's consent to carry out sterilization procedures.
Compulsory notification on the part o f the SUS o f all surgical sterilization performed.
Prohibition o f induced or instigated sterilization.
Registration, enforcement and control by the Ministry o f Health o f all institutions and services that perform family planning procedures and research to ensure that those institutions offer all contraceptive options, including reversible contraception and surgical sterilization
Penalties for doctors who disobey the law.
~~ _____
13* Family-health and family-planning programs have been almost exclusively directed at women. Only recently have reproductive health programs for men become the focus o f attention in Brazil, particularly among academic and activist groups. Thus it i s no surprise that changes in contraceptive use on the part of men have been slow, even though their use i s increasing. In 1996, despite the fact that almost all men surveyed claimed to be aware of contraception alternatives, only six percent used condoms and four percent had had a vasectomy (1996 BEMFAM). Also, many men are unacquainted with basic reproductive fbnctions and systems, which affect the contraceptive choices they make. According to a study based on 200 in-depth interviews with low income men and women in the city of Port0 Alegre in the southern state of Rio Grande do Sul, 50 percent o f men and women believed that women were fertile during menstruation while only 15 percent o f the sample, the majority women, were familiar with the current scientific knowledge on fertility (Lea1,O.: Cultura Reprodutiva e Sexualidade, Estudos Feministas, vo1.6, no2 1998).
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The current Ministry o f Health's priorities for women's health and maternal and infant health are to: (a) improve the quality o f care during pre- and post-natal period with a view to reducing maternal and neo-natal mortality; (b) overcome prevailing distortions in access to contraceptives, including family planning education; (c) provide cervical and cancer screening; and (d) promote more robust integration o f programs, particularly the H IV-A IDS and the Adolescent Health Program (PROSAD). The basic guidelines for the local programs recommend a first prenatal visit in the first three months o f pregnancy and additional visits every four weeks thereafter (for uncomplicated pregnancies). The vis i ts should include, at least, a check for edema and the measurement o f blood pressure, uterine height and fetal heart frequency. A few laboratory tests are also routine, plus immunization against tetanus, if necessary. Prenatal care coverage i s high: more than 90 percent o f women have at least one attendance and an average o f more than six consultations although real coverage varies across regions and income groups (see Table 2).
Table 2: Proportion of mothers receiving inadequate antenatal care (Kessner criteria) by asset quintiles and concentration indices for three studies
Cricitirna 11996)
Percentage of Wealth DHS Sergipe children quatiles (1996) (2@33 ,441 sus users using sus
1 70 0 49.t 2 43.5 48.3 3 27 4 35.3 4 19.1 30.2
A I 38.4 35'7 5 13.6 18.7
P'O001 p 0.001 CI = -31.7 CI = -18.3
37.8 27.9 24.6 21.0 15.9 25.9
p = 0.003 CI =-162
38.7 93.8
29.3 77.4 26.5 65.1 24.6 37.1 30.7 74.3
p = 0.166 p 0.001 61 = -0.09
29.2 89.4
Source: DHS Demographic and Health Survey; SUS Unified Health System; CI Concentration indexes. BEMFAM, BrazilDHS 1996; NA Neumann, Cricihma Study 1996; JA Cesar, Sergipe Study 2000.
Recommendations
Although SUS and PSF have progressed enormously since the Bank prepared i t s first loan to support PROESF 1, the main conclusions and recommendations that were presented at that time still apply to PROESF 2. Evaluation, including impact on health status, and consultations, corroborate the importance o f the program. The following are specific recommendations:
*:* Listen to users' priorities
*:* Given the PSF's labor-intensive characteristics, it i s important to incorporate and provide training to NGOs and other c iv i l organizations for the hiring and monitoring o f Community Health Agents and other team staff. This would create economies o f scale and avoid pressures on municipal budgets.
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*:* In larger municipalities, where living and working spaces are far away and people leave their homes very early in the morning and return late in the evening, the matching o f teams and families should be fine-tuned and implemented through participatory community diagnosis.
*:* Reproductive health issues should be handled carefully, particularly when dealing with teens. Health teams should also be trained on how to deal with the health impacts o f domestic violence, prostitution, street violence, premature sexual practices, teenage pregnancy, and drug addiction
*:* should be coordinated at the municipal level.
To improve efficacy and costs, the several programs dealing with women’s health
*:* Participatory evaluations, already used frequently, should be discussed and understood by policy-makers at a l l levels. Although significant resources have been spent on these evaluations, there are indications that their dissemination has been fragmented.
*:* Although poor health indicators are often linked to black and “parda” families, the PSF does not address this issue. I t lacks studies and data to indicate whether specific interventions are needed.
*:* Civ i l society strengthening i s important to reach those who are most vulnerable and to ensure proper handling o f preventive care, particularly in delicate cases. Universities and research institutions must be invited to j o i n the Project for the innovative contribution they can make.
Users Priorities
Attention, respect and courtesy to users o f health care facilities and services Consideration o f health priorities when scheduling appointments and services Shorter waiting time Establishment o f deadlines in service delivery Establishment o f procedures to process complaints Identification o f staff Visual signalization Cleanliness and comfort facilities
Background: Brazil’s indigenous population i s estimated at 395,000 people’33 consisting of 210 ethnic groups speaking 170 languages. Approximately 190,000 are women o f child-bearing age and 49,000 are children 0-4 years o f age. They reside in all but two
Living in defined communities. 133
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states (Piaui and Rio Grande do Norte), mainly in 579 indigenous reservations that occupy about 12 percent o f Brazil’s territory. 134 An estimated 3,370 indigenous communities exist, many in distant hamlets. Contact with the rest o f the population began about 300 years ago and continued at different rates for different ethnic groups. I t i s estimated that only 55 groups remain isolated. Each ethnic group i s unique.
An estimated 50,000 Indians reside in Brazil’s largest urban areas. Considerable migration between urban settlements and rural, isolated hamlets i s common. In some cases, movement i s temporary to seek work or health care. In other cases, settlements are permanent resulting from the disintegration o f tribal life, culture and livelihood.
Changes in the health profile o f indigenous groups have occurred over a relatively short period o f time. Medical anthropologists hypothesize that Amazonian Indians suffered a reversal o f the epidemiological transition with the arrival o f Europeans. Forensic data suggests that prior to colonization, Indians’ health problems resulted mainly from chronic and degenerative disease. With colonization came the arrival o f “induced” transmissible disease such as tuberculosis, smallpox, malaria and yellow fever. Currently, Indian populations suffer from al l phases o f the epidemiological transition combining infectious diseases with degenerative illnesses. The latter are associated with an increasingly sedentary lifestyle. Communities also suffer from problems such as alcoholism and suicide caused by disruption o f social networks, environmental pollution and diminishing natural resources that are detrimental to subsistence activities.
Institutional Framework: Since 1999, the National Health Foundation (FUNASA) has been responsible for indigenous health through oversight and financing o f a parallel indigenous health subsystem. Mandated through L a w 9836 (1999) and supported by the government’s Indigenous Health Policy (Regulation No. 254: 2002), FUNASA established 34 Special Indigenous Sanitary Districts (DSEI) based on geographic, socio- cultural, and epidemiological criteria. DSEI i s the equivalent o f a territorial-defined delivery system. I t i s headed by a director (chefe), who represents FUNASA and i s responsible for health services as well as for developing a district health plan with the participation o f District Councils. The latter consist o f indigenous and N G O representatives. DSEIs are organized by catchment areas where a health center (polo base) i s located. There, health teams consisting o f doctors, nurses and technical staff provide basic care through outreach services to villages in the area. About hal f o f indigenous villages have an indigenous health agent, usually a community member. Higher level care i s provided through referrals to SUS facilities in towns and cities.
Three types o f delivery models are used: (i) direct delivery: consists o f “in-house” personnel hired by FUNASA through Regional Units (CORE); (ii) indirect contracting: contracting o f “administrative” NGOs who hire health personnel, procure supplies and equipment, but service provision i s directly managed by the DSEIs; and (iii) direct contracting: this mainly consists o f contracting o f NGOs to provide services and procure al l works, goods and services. (FUNASA has also entered into a limited number o f
134 DESAI, March 2002
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“agreements” with municipalities to provide care). DSEIs are responsible for supervision.
Proposed Project: There are two reasons why an IPP is not applicable to the proposed project. The f i rs t one is related to the small size o f the Indigenous population in cities over 100,000 inhabitants and the second to the fact that the Bank i s already providing support to Indigenous peoples’ health through the ongoing Disease Surveillance and Control Project - VIGISUS 2.
According to the 2000 Census, the proportion o f indigenous peoples in cities over 100,000 inhabitants i s statistically negligible: 0.3 percent (0.50 percent in the Northeast; 0.37 percent in the North; 0.37 percent in the Southeast; 0.32 percent in the South; and 0.45 percent in the Midwest). This does not mean that Indigenous health should not be addressed but, as described below, the Bank-financed VIGISUS 2 Project provides financing to FUNASA’s Indigenous health program. Assuming that urbanized indigenous peoples reside in the poorest areas o f large cities and given the fact that PSF targets these areas, these indigenous peoples are indirect beneficiaries o f the proposed project.
VIGISUS 2 objectives are two-fold: (a) to reduce mortality and morbidity from communicable and non-communicable diseases and exposure to risk factors associated with ill health; and (b) to improve the health outcomes o f especially vulnerable groups including indigenous populations and Quilombo (descendents o f slaves) communities. This strategies to achieve these goals are: (a) continuing to strengthen the national public health surveillance and disease control system for communicable diseases and environmental health, particularly in states and municipalities; (b) improving and broadening the scope o f public health surveillance and disease control, to include non- communicable diseases, injuries and maternal health, and the surveillance and prevention o f risk factors; (c) expanding access to and utilization o f health services to indigenous populations; (d) improving the effectiveness o f indigenous health care through institutional development, quality enhancement and cultural appropriateness; and (e)extending water and sanitation services to rural Quilombo communities.
VIGISUS 2 finances a slice o f the Federal government’s Indigenous Health Program. The Bank’s value added relates more to contributions o f technical know-how and experience related organizational arrangements and financial instruments to improve quality and effectiveness o f indigenous health services, establishment o f community-driven development initiatives and the introduction o f a performance-based financing scheme for supporting disease surveillance and control activities in states and municipalities.
Through VIGISUS 1 , the Bank and the Government have acquired considerable technical expertise in strengthening disease surveillance and control systems at both regional and central levels, working together with over 50 NGOs that deliver services to Indigenous peoples’ communities. Key results o f VIGISUS 2 include: (a) full health coverage o f indigenous populations with an integrated package o f preventive and curative services; (b) al l providers under contract with FUNASA operating under performance-based contracting arrangements; and (c) protocols for mother-infant care implemented in al l Special Indigenous Peoples Sanitary Districts (DSEI). Among others, measurable
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outcomes expected for Indigenous peoples include that: (a) 50 percent o f indigenous pregnant women in targeted districts receive at least 3 prenatal consultations according to FUNASA protocols - (the proportion has reached 67 percent in 2005); (b)100 percent o f Indigenous mothers with children less than two years o f age that are identified with inadequate weight gain receive nutrition education and counseling on feeding practices that are also culturally appropriate; (c) al l modules o f indigenous information systems are functioning in al l DSEIs; (d) 70 percent o f health teams in targeted DSEIs are providing integrated, benchmark service plan; (e) one-third o f new Community Health Agents hires are indigenous women; and (0 the Indigenous nutritional surveillance system i s fully operational in 10 DSEIs. Therefore, through financial support to FUNASA, the Government's constitutional mandate for Indigenous health care and support to these populations as well as to quilombolas i s financed under another ongoing Bank's operation that i s also implemented by the Ministry o f Health.
Although there i s potential for improvement due to delays in approving i t s budget, as o f December 2005, VIGISUS has made some substantial progress with regards to the indigenous population. Some o f the positive outcomes are: (a) compared to baseline (40 percent), by December 2005, 50 percent o f Indigenous peoples were covered with a complete vaccination regime; (b) the proportion o f Indigenous women receiving at least three pre-natal consultations had already reached67 percent; and (c) 50 percent o f NGOs were working under performance-based contracts.
Additionally, the eleven DSEIS with greater malaria incidence are receiving laboratories that are able to process more complex tasks, including serology o f leishmaniose, dengue and other endemic diseases. At the same time, the findings o f the f i rs t nutrition survey in Indigenous areas financed under the VIGISUS Project will allow authorities to diagnose the incidence o f anemia, the most recurrent disease among Indigenous peoples in Brazil. Finally, five DSEIs (Interior South, Mato Grosso do Sul, East Roraima Coastal South and Yanomani) were defined as priorities for cervical cancer prevention campaigns for Indigenous women. Conclusions
Considering the issues described in this social assessment, ,the social development objectives to be included in the Family Health Project I1 are: (a) alleviation o f inequalities in health status; (b) gender equity through the enhancement o f women's health status as a result o f comprehensive interventions towards families that are the focus o f attention under the health care model o f the PSF; (c) enhancement o f social risk management by strengthening information o f families and communities; and (d) improvement o f the country's safety net by strengthening the health care system and risk management.
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Part 2: Summary Environmental Assessment
1. Introduction
This Environmental Assessment (EA) was prepared for the purposes o f identifying potential environmental impacts in compliance with World Bank Safeguard Policy (OP/BP 4.01). This summary identifies potential risk, proposes measures to promote positive environmental impacts as well as to mitigate potential adverse impacts generated by the Family Health Extension 2 Project (PROESF 2). This summary focuses on two areas with potential impacts. The first concerns new construction and rehabilitation o f ambulatory health units. The second involves the implementation o f an effective waste management system in these as well as other ambulatory units receiving project financing.
The Project EA i s based on: (i) an analysis o f the legal and regulatory framework for health facility construction and medical waste management; (ii) review o f guidelines and procedures with respect to ambulatory unit construction and medical waste management; (iii) meetings with M O H and project personnel responsible for PSF and project implementation; and (iv) an in-depth environmental assessment o f PSF performed by the Pan American Health Organization in preparation for APL Phase 1 o f the PSF.
The proposed Project has potential for generating both positive and negative environmental impacts. The negative impacts could result from expansion o f the system o f basic health units. At the same time, however, the Project has enormous potential for producing positive impacts. This i s evident in the very concept o f the project-moving health teams into local communities, and identifying and addressing environmental factors that could threaten the health o f the population. This effort wi l l reduce the environmental degradation in these communities.
PROESF 2 wi l l construct new but small-scale ambulatory units on public land in high density areas o f large urban cities. Building area wi l l range from 100 to 300 m2.13’ Based on a preliminary needs assessment, the M O H estimates that approximately 230 un i t s will be constructed in the 187 participating municipalities. 136 Construction wi l l not take place in protected areas or on ecologically fragile sites. Nor will construction result in involuntary resettlement.
Size will depend on the number o f PSF teams occupying the building. Nearly all units house between
A list o f the number of new constructions per municipality i s available in the project files.
135
one or three teams. Cost will vary from R$800 to R$1200 per m2 depending on local construction costs. 136
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2. Safeguard Policies
OP 4.01 Environmental Assessment: This Project was classified as Category B due to the proposed financing o f new construction. Following Bank policy, an Environmental Impact Assessment (EA) was performed and an Environmental Framework (EF) was prepared to guide selection, screening, construction and monitoring o f new health unit construction. The EF specifies specific measures by which the Project will mitigate environmental risks, including: (i) an environmental screening and monitoring o f construction sites; (ii) environmental licensing o f al l construction; (iii) environmental supervision o f construction process; (iv) development and implementation o f medical waste training program to improve medical waste management system; and (v) M O H and Bank supervision o f the medical waste management system in family health units.
OP 4.12: Involuntary Resettlement: The Project will not finance activities that may lead to involuntary resettlement (physical relocation, loss o f assets or access to assets). However, since the Project finances new construction, the policy could be triggered through land acquisitions for construction purposes. Although al l sites will be located on public lands, the Operational Manual will stipulate that any new construction that may result in resettlement will not be eligible to receive funding.
3. Overall Environmental Impacts
The EA analyzed potential impacts o f new construction, both positive and negative. In general, any adverse impacts are expected to be localized and reversible. However, the improvement o f medical waste management in ambulatory health units will have beneficial environmental impacts.
During unit construction, the impacts would generally be temporary, o f l o w intensity and with well-known mitigation measures that can be easily implemented. Negative impacts could results from inadequate site selection, terrain movements, dust and noise contamination o f superficial water supplies and inadequate disposal o f garbage and construction waste. However, the potential impact i s l o w because al l works are small scale. Nevertheless, environmental guidelines that are aligned with Brazilian legislation as well as MOH basic unit construction guidelines (see below) wil l be included in the Operational Manual.
During facility operation the main possible internal negative impacts are related to inadequate management and disposal o f medical waste generated from patient diagnosis and care. This would pose a safety threat to both patients and employees. This risk will be mitigated through strengthening the system for management and disposal o f medical wastes, per government environmental regulations and M O H guidelines. Other external negative impacts are related mainly to waste generation and atmospheric pollution generated from equipment, sewage treatment and disposal, and treatment and removal o f non-medical solid waste. These issues will mitigated through implementing in al l health units benefiting from project financing MOH’s “hospital environmental safety” and
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MOH/ANVISA’s Manual for Medical Waste Management guidelines. The guidelines deal with each o f the above mentioned issues.
4. Regulatory Framework and Construction Guidelines
The health sector possesses a vigorous legal and regulation framework related to facility construction. The legal and regulatory framework has been strengthened in recent years through the issuing o f regulations o f more detailed regulations and guidelines governing medical waste management and health facility construction (in 2004 and 2005). More recently (in 2006) the M O H produced basic health unit construction guidelines based on current legislation. Participating municipalities will follow the guidelines in the planning, construction and operation o f new facilities. The project’s environmental framework i s based on the following regulatory and institutional instruments:
Medical Waste Management 0 National Environmental Board (CONAMA) 283/01 (2001): Stipulates general
procedures for the management and disposal o f medical waste in health facilities. Mandates the preparation o f a Management Plan for Medical Waste in Health Facilities. ANVISA 306/04 (2004) and CONAMA 385/05 (2005): These instruments: (i) set a single and integrated regulatory framework for management o f medical waste generated in health facilities, including separation, storage, transport, treatment and final disposal; and (ii) mandate the development and implementation o f Management Plan for Medical Waste in all health facilities. ANVISMMOH Guidelines (Manual for Medical Waste Management, 2004): This manual provides detailed guidelines to local system and facility managers regarding the implementation o f the above mentioned regulations including the develo ment and execution o f a Management Plan for Medical Waste in all health facilities.
0
0
IR Building Codes for Health Facilities 0 Federal Law 6.437/77 (1977): This law represents the basic sanitary legislation and
mandates the essential structural features o f health facilities according to type (hospital, diagnostic center, basic care unit, etc.). All health facilities are required to be licensed according to this law.
0 National Agency for Sanitary Control (ANVISA) RDC 50/02 (2002). Drawing on Law 6.437/77 this i s the guiding regulatory instrument for new buildings, rehabilitations, and expansions o f health units. It details norms regarding potable water, electricity, collection and disposal o f sewage, solid and medical waste disposal, etc.
0 CONAMA no. 297/97: Regulates the criteria and processes to obtain an environmental license, requiring an environmental assessment and local consultations.
13’ The MOH has also developed a course (and CD) on developing and implementing Medical Waste Management plan in basic care units. The course i s based on implementation in a hypothetical basic care unit.
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M O H Guidelines (Manual for Physical Infrastructure for Basic Care Units, 2006). Drawing on the above regulations, this user-friendly manual provides detailed guidance o n physical space (including architectural plans), equipment specifications, content o f solid and medical waste management, etc. for basic care units. The manual was prepared in anticipation o f new constructions that would be financed by the proposed project. Most if not al l the participating municipalities will fol low the guidelines upon planning, designing, constructing and operating new units.
Major Activities
5. Consultations
Specific Environmental and Safeguard Measures
The Unif ied Health System (SUS) i s built upon consensus among health authorities, c iv i l society and communities. An essential part o f its structure is a set o f formalized forums to discuss policies, plans and initiatives at al l levels o f government. Health Councils consisting o f representatives o f c iv i l society (universities, non-profit health organizations, NGOs and women groups) are legally mandated in each sub-national government. The PROESF 2 Project together with i t s implementation plan, including new constructions, will be debated and approved by the Municipal Health Councils in each o f the 187 participating municipalities. The M O H will not approve any plan until evidence i s presented o f consultations with and approval by c iv i l society organizations and any affected communities.
6. Environmental Framework (to be included in the Operational Manual)
Proposed Procedures by Project Phase to Mitigate Potential Environment R i s k s Related to Construction of Basic Health Care Units.
Id Site Selection Stage
targeted population (traffic patterns, bus routes, etc.); (ii) establish the characteristics o f the spaces according to the number o f PSF teams and planned activities in the building; (iii) verify public land ownership; (iv) assess soil and subsoil conditions o f potential sites and their vulnerability to land slides, flash floods, natural disasters, etc. (v) assess site for contamination and from contaminated sites such as stagnant water, open sewers, polluted bodies o f water; (vi) define specific spaces, activities, and basic equipment; (vii) integration o f building into architectural style o f surrounding neighborhood; and (viii) review national and local laws, regulations, building codes and guidelines that wi l l be considered in design, construction and operation o f the facility.
Based on the above, the local team prepares a Works Implementation Plan for the design and construction o f the unit.
Engineering designs and technical specifications to consider: (i) connections to electric, water, sewerage
D
Conduct assessment o f potential environmental impacts o f proposed site, including endogenous and exogenous factors, according to CONAMA 237197 and MOH Basic Care Unit Construction Manual Prepare plan and process to secure compliance with CONAMA 237/97 environmental regulations Conduct consultations with communities and representatives o f civil society in the affected areas. Verify that site wi l l not involve involuntary resettlement Verify that site i s not located in protected area or one with fragile environment
gn Ensure design complies with ANVISA, RDC 50/02 and local or national environmental protection
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Major Specific Environmental and
collection, separation, storage and transport o f wastes (medical and non-medical); (v) spaces and access points for pedestrians, disabled persons and vehicles; (vi) emergency access points (if necessary); (vii) avoidance o f toxic materials such as asbestos, lead-based paints, etc. and (viii) avoidance o f non-certified wood.
Activities
Designs wi l l follow MOH norms specified in Manual for Construction o f Basic Care Units
Safeguard Measures
Cons Includes construction and procurement o f materials
id Site Selection Stage regulations such as CONAMA 237/97 Secure sanitary and environmental permits to construct on selected sites. Develop Works Supervision Plan (draft framework plan included in EF) to ensure that contractor i s following design and technical specifications and following environmental regulations and guidelines. Prepare terms o f reference for contractors specifying that they are required to following environmental and sanitary regulations and that construction process wi l l not adversely affect the surrounding vegetation, infrastructure, water and electrical connections.
uction Implement Works Supervision Plan to ensure compliance with sanitary and environmental norms and MOH Construction Manual Sanitary inspection i s conducted by appropriate agency and specialists Secure sanitary/operating license (prior to operation) Environmental inspection i s conducted by appropriate agency and specialists Secure environmental license (prior to operation)
Operation I Once operating and environmental licenses obtained,
the facility commences operations according to PSF program specifications (these are summarized MOH Construction Manual), including: (i) provisions in place for equipment and plant maintenance; and (ii) implementation o f solid and medical waste management system.
Develop and Implement Medical Waste Management Plan based on ANVISA’s Manual for Medical Waste Management and MOH’s Hospital Environmental Guidelines, including processes classification o f wastes, separation, storage, treatment and final disposal. The Plan should specify the following: (i) Application o f environmental monitoring checklist’38 to obtain baseline and follow-up data on environmental situation o f unit (EF contains model instrument); (ii) development and implement training program on management and disposal o f medical wastes (EF contains course recommendation^;'^^ and (iii) supervision plan to verify compliance with medical waste regulations and implementation o f Medical Waste Management Plan. MOH and Bank supervisory visits wi l l include site visits to monitor implementation o f Medical Waste Management Plan.
The environmental checklist to monitor implementation o f medical waste mitigation measures i s
Training program w i l l be financed through Project financing.
138
included in the project’s M&E framework. See Annex 3. 139
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Annex 11: Project Preparation and Supervision BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Planned Actual PCN review 03/01/2006 03/0 1/2006 Initial PID to PIC 03/08/2006 03/08/2006 Initial ISDS to PIC 03 /O 8/2006 03/08/2006 Appraisal 12/18/2006 12/18/2006 Negotiations 05/07/2007 03/20/2008 Board/RVP approval 05/0 1/2008 Planned date o f effectiveness 09/0 1/2008 Planned date of mid-term review 04/0 1 /20 10 Planned closing date 03/30/2012
Key institutions responsible for preparation of the project
Bank funds expended to date on project preparation: 1. Bank resources: US$271,591 2. Trust funds: 0 3. Total: US$271,591
Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$3 6,4 12 2. Estimated annual supervision cost: US$74,588
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I I Coordinator I Health Bank staff and consultants who worked on the Project included
Government staff and consultants who worked on the Project included Name Title Unit Luis Fernando Rolim Sampaio Director Department o f Basic Health Care,
Ministry o f Health Maria Hortense Marcier Coordinator PROESF Department o f Basic Health Care,
Ministry o f Health Luis Claudio Sartori Coordinator for preparation o f Department o f Basic Health Care,
PROESF 2 Ministry o f Health Iracema de Almeida Benevides Coordinator o f Monitoring and Department o f Basic Health Care,
Evaluation Ministry o f Health Cinthia Lociks de Araujo Monitoring and Evaluation Department o f Basic Health Care,
Ministry o f Health Miriam Isabel Engel Koleski Consultant Department o f Basic Health Care,
Ministry o f Health Eg16 Santos e Santos Consultant Department o f Basic Health Care,
Ministry o f Health Allan Nunes Alves de Souza Department o f Basic Health Care,
Ministry o f Health Fabiane Minozzo Consultant Department o f Basic Health Care,
Ministry o f Health Milena Maria Bastos Consultant Department o f Basic Health Care,
Ministry o f Health Maria Aparecida Turci Consultant Department o f Basic Health Care,
Ministry o f Health Berardo August0 Nunan Consultant Department o f Basic Health Care,
Ministry o f Health Edna Cezar Balbino Consultant Department o f Basic Health Care,
Ministry o f Health Eza~Pontes
Consultant
I Planning and Budget I Secretariat o f Health Services, Ministry o f I
Name Title Unit Jerry L a Forgia Joana Godinho Trajano Quinhoes Daniela Pena de Lima Lucian0 Wuerzius Jose Janeiro, Fabson Voegel Nicolas Drossos, Regis Cunningham Patricia Hoyes, Miguel Oliveira Valeria Pena Carla Zardo Lerick Kebeck Cassia Miranda Marize Santos Mariana Montiel, Marta Molares Benjamin Loevinsohn April Harding Olga Pan6 Bernard Couttolenc
Task Team Leader Senior Health Specialist Health Specialist Operations Officer Procurement Specialist Financial Management Specialists
Disbursement specialist Social Development Specialist Program Assistant Sr. Program Assistant Team Assistant Team Assistant Lawyer
Peer Reviewer Peer Reviewer Consultant Consultant
LCSHH LCSHH LCSHH LCSHH LCSPT LCSFM
L O A G l LCSEO LCCSC LCSHD LCSHD LCSHD LEGLA
SASHD LCSHH
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Annex 12: Documents in the Project File BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Almeida C and Macinko J 2006. Desenvolvimento de Sistemas e Serviqos de SaGde - ValidaqBo de uma metodologia de avaliaqgo rhpida das caracteristicas organizacionais e do desempenho dos serviqos de atenqBo basica do Sistema Unico de SaGde (SUS) em nivel local. OPAS/MS, Brasilia.
Barker DJP 1998. In utero programming o f chronic disease. Clin Science 95: 115-128.
Claeson M, Mawj i T, Walker C 2000. Investing in the Best Buys: a Review o f the Health, Nutrition and Population Portfolio. FY 1993-99. HNP/World Bank.
Conill EM 2002. Politicas de atenqBo primaria e reformas sanitarias: discutindo a avaliaqlo a partir da analise do Programa Salide da Familia em Florian6polis, Santa Catarina, B rad , 1994- 2000. Cadernos de Satide Pziblica, 18 Suppl: 191 - 202.
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Couttolenc et a1 2005. Em Busca da Excelencia: Fortalecendo o Desempenho Hospitalar no Brasil: Estudo Sobre Gasto Hospitalar N o Brasil. The World Bank and Ministerio da Saude.
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129
Annex 13: Statement o f Loans and Credits BRAZIL: Family Health Extension Project - APL Phase 2 (PROESF 2)
Difference between expected and actual
disbursements Original Amount in US$ Millions
ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d
EDUC QUAL IMPR BR Tocantins Sustainable Regional Dev BR Maranhao Integrated: Rural Dev BR Disease Surveillance & Control APL 2 BR (CRL1) Bolsa Familia 1st APL BR-2nd APL BAHIA DEV. EDUCATION PROJECT
PROJECT GEF BR Amazon Region Prot Areas
BR BAHIA DEVT (HEALTH ) BR-AIDS & STD Control 3 BR-Energy Sector TA Project BR-Municipal Pension Reform TAL BR SA0 PAUL0 METRO LINE 4 PROJECT BR TA Financial Sector BR GOIAS STATE HIGHWAY MANAGEMENT
BR-PERNAMBUCO INTEG DEVT:
BR-RECIFE URBAN UPGRADING
( M A )
BR- FUNDESCOLA I I IA BR-FAMILY HEALTH EXTENSION PROJECT GEF BR PARANA BIODIVERSITY PROJECT BR Sergipe Rural Poverty Reduction BR FORTALEZA METROPOLITAN TRANSPORT PROJ BR-RGN 2ND Rural Poverty Reduction BR SANTA CATARINA NATURAL RESOURC & POV. BR Fiscal & Fin. Mgmt. TAL BR PIAUI RURAL POVERTY REDUCTION PROJECT BR- CEARA BASIC EDUCATION BR LAND-BASED POVRTY ALLEVIATION I (SIM) BR Pernambuco Rural Poverty Reduction
AG Concession Amaggi Andrade G. SA Apolo Arteb AutoBAn BSC Banco Bradesco Brazil CGFund CHAPECO CN Odebrecht CPFL Energia CRP-Caderi CTBC Telecom Comgas Coteminas DENPASA Dixie Toga Duratex Eliane Empesca Escola Fleury Fosfertil Fras-le GAVEA GP Cptl Rstrctd GPC Guilman-Amorim Icatu Equity Innova SA Ipiranga Itaberaba Itau-BBA JOSAPAR Lojas Americana MBR Macae Microinvest Net Servicos
M o s t recent eat imate ( la tes t year available, 1996-02)
Poverty (%of population belo wnational poverty line) Urban population (%of total population) Life eqectancyat birth (pars) Infant mortaiity(per /000/ive births) Child malnutrition (%ofchildren under5) Access to an improved water source (%o fpopulation) illiteracy (%ofpopulation age a+) Gross primaryenroiiment (%ofschool-age population)
Male Female
13 17
22 62 69 30 6
87 t?
8 2 8 6 8 9
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1982 1992
GDP (US$ billions) 2617 390.6 Gross domestic investment1GDP 211 B.9 Eqorts of goods and ServicesIGDP 7.6 0.9 Gross domestic savingsIGDP 20.4 214 Gross national savingsiGDP 8.3 20.1
Current account balanceIGDP interest payments1GDP Total debt/GDP Total debt serviceleqorts Present value of debtIGDP Present value of debtleworts
-5.6 f.6 3.4 0.7
33.3 33.0 619 211
1982-92 1992-02 2001 (average annualgrovdh) GDP 2.6 2.7 14 GDP per capita 0.7 14 0.1
527 3,260 17 27
15 2.2
76 71 27 9
66 11
0 0 0 1 t?6
2001
509.0 212 0.2
20.2 16.6
-4.6 3.0
46.3 76.4 52.6
334.2
2,411 1,390
3,352
1.0 12
49 69 30 11
61 0 111 111 10
2002
452.4 8.3 15.6 2 15 B .O
-17 3.0
5 13 702 58.4
2 0 0 2 2002-06
15 3.4 0.2 2.2
STRUCTURE o f the ECONOMY
(%of GDP) Agriculture Industry
Services
Private consumption General government consumption imports of goods and services
Manufacturing
(average annualgro vdh) Agriculture Industry
Services
Private consumption General government consumption Gross domestic investment imports of goods and Services
Manufacturing
1962 1992
9.0 7.7 45.6 38.7 34.6 24.7 45.4 53.6
69.6 615 0.0 17.1 8.3 6.4
1962-92 1992-02
2.5 3.5 16 2.3
0.5 16 3.2 2.8
0.7 3.9 7.1 0.9 4.1 2.1 3.9 7.6
2001 2002
6.1 6.1 22.3 21.0 14.0 0.2 716 72.9
60.6 59.3 8.2 8.3 14.2 Q.6
2001 2002
5.7 5.6 -0.7 15
14 14 19 15
0.8 0.4 10 1.0 -1.1 -5.2 1.2 -t?.6
Deve lopment diamond.
Life expectancy
T Gross
primary enrollment capita
1
Access to improvedwatersource
-Brau/ Lower-middle-income group
Economic ratios.
Trade
Indebtedness
-8raul Lower-middle-income group
Growth o f Investment and GDP (%)
l5 T
-OD1 -GDP
I Growth o f exports and impor ts ( X ) 20
10
0
-10
-20
134
Brazil PRICES and G O V E R N M E N T F I N A N C E
D o m e s t i c p r i c e s (%change) Co nsumer prices 135.0
1983
Implicit GDP deflator 1402
Government f inance (%of GDP, includes cumnt grants) Current revenue Current budget balance Overall surplus/deficlt
T R A D E
(US$ mflllons) Total exports (fob)
Coffee Soybeans Manufactures
Total imports (cif) Food Fuel and energy Capital goods
Export price index(B95=WO) Import price index(B95=X70) Terms of trade (S95=WO)
B A L A N C E o f P A Y M E N T S
(US$ ml//fons) Exports of goods and services imports of goods and services Resource balance
Net income Net current transfers
1983
60 57 140
1983
23.611 8,534 4,077
-11,022 108
Current account balance -6,837
Financing items (net) Changes in net reserves
4,946 1.891
M e m o : Reserves including gold (US$ millions) 4,563 Conversion rate (DEC, local/US$) 2.10E-13
E X T E R N A L D E B T and RESOURCE FLOWS
(US$ millions) Total debt outstanding and disbursed
1983
98,525 IBRD 3,628 IDA 0
Total debt service IBRD IDA
13,304 507
0
Composition o f net resource flows Official grants 13 Official creditors 1,576 Private creditors 2,659 Foreign direct investment 1,609 Portfolio equity 0
World Bank program Commitments Disbursements Principal repayments
2,067 1.204 270
1993
1926 0 1,996 6
1993
36,563 2,466 3,074
25,935 25,256
1,089 2,239 8,369
91 67
t36
1993
41,613 31,795 9,821
-22,099 1,686
-592
9.805 -9,213
32,211 3 22E-2
1993
144,Y)4 6,575
0
D.883 1858
0
59 -1,033 13,073 1.292 6,570
636 471
1279
2002
22.5 D.2
23.9 2.6
2002
60,362 3,049 3,032
33,000 47,237
1,085 6,240 11,643
66 91 97
2002
69,9t3 61,709 6.204
-%,,@I 2,390
-7,597
-6,003 13.600
37,823 2 9
2002
228,662 6.585
0
51,636 1.518
0
0 916
-9,541 0 0
1,276 1,384 1.063
2003
9.3 P.8
23.7 3.0
2003
73,064 3,456 4,290
39,653 48.260
924 6,577
13,346
95 90 105
2003
83.567 63,819 19,748
-18,552 2.867
4,063
-963 -3.130
49.296 3.1
2003
236,245 8,586
0
56,793 2,013
0
233
1,217 1.291 1.633
in f la t ion (Oh) 1
- -GDPdeflator &CPi
Expor t and i m p o r t leve ls (US$ mill.)
Is0 000 T
1 97 98 99 00 01 02 03
D Exports IQ imports I
composition o f 2003 debt (US$ mill.)
I A 6,566
C 26317 G 22,103
155,904 , A - IBRD E - Bilateral B - IDA D ~ Other multilateral F - Private C - I M F G - Short-term
135
M AT O
G R O S S O
T O C A N T I N S
B A H I A
M I N A S
G E R A I S
F.D.
GOIAS
MATO GROSSODO SUL
SÃO PAULO
ESPÍRITOSANTO
RIO DE JANEIRO
PARANÁ
STA CATARINA
RIO GRANDEDO SUL
A M A Z O N A S
R O N D Ô N I A
P A R Á
RORAIMA A M A P Á
M A R A N H Ã O
C E A R Á
P I A U I
RIOGRANDE
DO NORTE
PARAÍBA
ALAGOAS
SERGIPE
PERNAMBUCOA C R E
IBRD 31367
APRIL 2001
30°
20°
10°
0°
30°40°50°60°70°80°
A T L A N T I C O C E A N
A T L A N T I C
O C E A NP A C I F I C
O C E A N
C O L O M B I A
V E N E Z U E L ASURINAME
GU
YAN
A
FR.GUIANA
(FR)
P E R U
B O L I V I A
PARAGUAY
URUGUAY
CHILE
A R G E N T I N A
Amazonas
Negro
Para
guay
Para
na
Fran
cisc
o
BRASÍLIA
PANAMA VENEZUELA
COLOMBIA
GUYANASURINAME
FRENCH GUIANA (FR)
B R A Z I L
ECUADOR
PERU
BOLIVIA
PARAGUAY
CHILE
ARGENTINA
URUGUAY
A T L A N T I C
O C E A N
PACIFIC
OCEAN
B R A Z I L
40°50°60°70°
30°
20°
10°
0°
Toca
ntin
s
Para
na
Urug
uay
Porto Alegre
Rio de JaneiroSão Paulo
Vitória
Salvador
Maceió
Recife
JoãoPessoa
Fortaleza
São Luís
Belém
PortoVelho
Grande
SobradinhoReservoir
Cuiabá
BeloHorizonte
Goiânia
Teresina
RIVERS
STATE CAPITALS
NATIONAL CAPITAL
STATE BOUNDARIES
INTERNATIONAL BOUNDARIES
Florianópolis
Curitaba
Aracaju
Natal
Macapá
BoaVista
Manaus
RioBranco
CampoGrande
São
400
0 500 1000 KILOMETERS
200 600 MILES0
250 750
This map was produced by theMap Design Unit of The World Bank.The boundaries, colors, denominationsand any other information shown onthis map do not imply, on the part ofThe World Bank Group, any judgmenton the legal status of any territory, orany endorsement or acceptance ofsuch boundaries.
