World Bank DocumentReport No: 26236 IMPLEMENTATION COMPLETION REPORT (SCL-43640) ON AN ADJUSTMENT...

Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 26236

IMPLEMENTATION COMPLETION REPORT(SCL-43640)

ON AN

ADJUSTMENT LOAN

IN THE AMOUNT OF US$700 MILLION

TO THE BANCO NACIONAL DE OBRAS Y SERVICIOS, S.N.C.WITH THE GUARANTEE OF THE UNITED MEXICAN STATES

FOR HEALTH SYSTEM REFORM-IMSS PROJECT

June 27, 2003

Country Management Unit for Human Development Sector Management UnitLatin America and the Caribbean Regional Office

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.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective )

Currency Unit = Mexican PesoUS$ 1 = 10.01 Peso

FISCAL YEARJanuary 1 December 31

ABBREVIATIONS AND ACRONYMS

AMGD Medical Area of Decentralized Management (Area Médica de Gestión Decentralizada)

BANOBRAS BANCO NACIONAL DE OBRAS Y SERVICIOS, S.N.C.C.U.R.P. Population Unique Registration Identity Card (Cédula Unica de Registro

de Población)CANADE Beneficiaries Database (Cátalogo Nacional de Derechohabientes)CF Complementary Investment FundDRG Diagnostic Related GroupGDP Gross Domestic ProductICB International Competitive BiddingIDF Innovative Development Fund IMSS Instituto Mexicano del Seguro SocialMOF Ministry of FinanceNMMF New Model for Family MedicinePCU Project Coordinating UnitPHC Primary Health CareSIAREFI Sistema de Afiliación, Recaudación y FiscalizaciónSHCP Ministry of Finance (Secretaria de Hacienda y Credito Publico)SSA Mexican Secretary of HealthSSHF Social Security Health FundUMF Family Medicine Units (Unidades de Medicina Familiar)UMAES Specialized Medical Units (Unidades Medicas Especializadas)UNAM Autonomous University of Mexico (Universidad Autónoma de México)

Vice President: David de FerrantiCountry Director Isabel GuerreroSector Manager Ana-Maria Arriagada

Task Team Leader/Task Manager: Maria Luisa Escobar

MEXICOMX: HEALTH SYSTEM REFORM - SAL

CONTENTS

Page No.1. Project Data 12. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 34. Achievement of Objective and Outputs 55. Major Factors Affecting Implementation and Outcome 106. Sustainability 127. Bank and Borrower Performance 128. Lessons Learned 149. Partner Comments 1810. Additional Information 20Annex 1. Key Performance Indicators/Log Frame Matrix 21Annex 2. Project Costs and Financing 33Annex 3. Economic Costs and Benefits 34Annex 4. Bank Inputs 35Annex 5. Ratings for Achievement of Objectives/Outputs of Components 38Annex 6. Ratings of Bank and Borrower Performance 39Annex 7. List of Supporting Documents 40Annex 8. Supporting Data and Table 43

Project ID: P007720 Project Name: MX: HEALTH SYSTEM REFORM - SAL

Team Leader: Maria-Luisa Escobar TL Unit: LCSHHICR Type: Core ICR Report Date: June 27, 2003

1. Project Data

Name: MX: HEALTH SYSTEM REFORM - SAL L/C/TF Number: SCL-43640Country/Department: MEXICO Region: Latin America and

Caribbean Region

Sector/subsector: Health (79%); Health insurance (21%)Theme: Health system performance (P); Administrative and civil service

reform (S)

KEY DATESOriginal Revised/Actual

PCD: 01/20/1998 Effective: 12/14/1998 11/25/1998Appraisal: 01/15/1998 MTR: 01/15/2000 05/17/2000Approval: 06/30/1998 Closing: 06/30/2000 09/30/2002

Borrower/Implementing Agency: BANOBRAS/IMSSOther Partners:

STAFF Current At AppraisalVice President: David de Ferranti Shahid Javed BurkiCountry Director: Isabel M. Guerrero Olivier LafourcadeSector Director: Ana-Maria Arriagada Xavier CollTeam Leader at ICR: Maria-Luisa Escobar Jean-Jacques de St. AntoineICR Primary Author: James Cercone; Maria Luisa

Escobar

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)

Outcome: S

Sustainability: L

Institutional Development Impact: H

Bank Performance: S

Borrower Performance: S

QAG (if available) ICRQuality at Entry: S

Project at Risk at Any Time:

3. Assessment of Development Objective and Design, and of Quality at Entry

3.1 Original Objective:

The stated objective of the Health System Reform Project (Loan No. 4364) was to support the Government’s effort to modernize the Instituto Mexicano de Seguridad Social (IMSS) in order to improve efficiency, equity and quality of medical services provided. IMSS is Mexico’s largest health care payor and provider, providing care to over 45 million people throughout the country. The project proposed five areas of action to achieve these objectives: 1) changing the IMSS corporate structure and decentralizing management responsibility and accountability; 2) separating financing from provision of services; 3) strengthening the IMSS health care delivery network; 4) developing efficient purchasing mechanisms; and, 5) increasing user choice and extending voluntary affiliation to the IMSS. Once the above actions had been accomplished with the project’s support, the long run vision was to include other institutions that manage compulsory contributions for health in the reform process and promote universal health insurance.

The project’s objectives were consistent with the Bank’s country assistance strategy for Mexico, discussed at the Board in December 1996, that aimed to ensure growth, macroeconomic stability, social development and the modernization of the state. Additionally, the project addressed directly three of the five actions for the health sector identified in the CAS: 1) establishing a financially viable health insurance system under the new Social Security Law; 2) increasing the role of the private sector in the delivery of health services; and, 3) decentralizing more responsibilities to the sub-national levels under an equitable system of federal transfers. The project was supported by technical assistance under a parallel Health Reform Technical Assistance Project (Loan No. 4367) that supported the development of the regulatory and institutional framework.

The project also aimed to provide immediate support to the Federal budget to facilitate the transition from payroll tax financing to general revenue financing as foreseen by the Social Security Law of 1997 and amendments in 2001. The new law: i) introduced changes in the IMSS administration, its responsibilities, patrimony and government; ii) established IMSS as an autonomous fiscal entity; iii) improved IMSS reserves and strengthened Seguro de la Familia. These changes were critical to ensure the financial sustainability of the IMSS and to allow IMSS to modernize its centralized and bureaucratic structure. The change in financing had a major fiscal impact as the resulting short-term obligations of the Government to IMSS for health insurance financing were estimated in 1998 at US$2.2 billion. Furthermore, the costs of increasing coverage among self-employed and informal sector workers (Seguro de Familia) was estimated to be at least $80 million annually. The loan was intended to give financial support to the Government to meet these increased costs.

3.2 Revised Objective:

The project’s development objective was not revised during project implementation.

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3.3 Original Components:

Component I. Health Finance and Regulatory Framework. This component aimed to develop and implement the health insurance financing reforms and the respective regulatory framework through three subcomponents: (i) establishment of the Social Security Health Fund (SSHF); (ii) increase user choice of providers and extension of coverage; and (iii) development of purchasing mechanisms.

The establishment of the SSHF was seen as the main mechanism to introduce the separation of functions between the financing and delivery of health care services within the IMSS and to lay the foundation for risk pooling under a (eventual) single financing system. The SSHF was intended to sign management contracts with health care providers; to set the framework for increased user choice and competition among providers, and to create a beneficiary database and establish the Innovative Development Fund (IDF) (see component II). During the first phase of the reform, the SSHF was to assume the supervisory function of the regulation of the health care market. Over the medium-term, a strengthened supervisory body, acting independently of all agents, was required to authorize the existence of Managed Care Organizations (MCOs), establish regulations, and supervise compliance by all agents in order to have a functioning system of managed competition.

In order to foster efficiency and quality in the provision of health care services, user choice was to be increased by allowing selection (i) of family doctors within a given Medical Area Unit, and (ii) of IMSS Medical Area Units and private or public MCOs. In the medium term, user choice was to be extended to include selection of Specialty Hospitals by the budget-holding Medical Area Units that purchase tertiary level care. For user choice to have the intended effects, regulations to define minimum quality and quantity of services to be provided, limit risk selection, protect user’s rights, and regulate financial standards and penalties for non-compliance for IMSS and MCO service providers were to be established. To increase equity among users, coverage was to be extended to self-employed and informal sector workers by offering a publicly-subsidized insurance system through IMSS.

To properly link the SSHF and medical providers, resource allocation had to be reformed by developing efficient purchasing instruments. For this purpose, subcomponent (iii) was aimed at introducing management contracts between IMSS and Medical Area Units and between IMSS and Specialty Hospitals. The former contracts were intended to gradually introduce a risk-adjusted capitation mechanism and incentives to reward improved service delivery performance. In contrast, management contracts with Specialty Hospitals were to allocate resources through a diagnosis-related mechanism (DRGs). DRGs were also expected to be used for internal management.

Component II. Institutional Strengthening of IMSS This component supported a reform of IMSS through two subcomponents: (i) changing the IMSS corporate structure; and (ii) strengthening its health care delivery network.

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To complement the separation of financing and provision of services within IMSS, subcomponent (i) was aimed at reforming its corporate structure, emphasizing the decentralization of IMSS administration to improve efficiency and responsiveness to the health needs of the population. IMSS was to: (a) transfer decision-making to the most appropriate decentralized level; (b) ensure transparency in the allocation of resources to the decision-making units; and (c) provide the decentralized authorities with adequate institutional capacity to perform budgeting procedures, and manage treasury systems and internal control systems. The restructuring was also intended to grant greater autonomy for and competition between Medical Area Units.

The strengthening of the health delivery network, envisioned under subcomponent (ii), was intended to support Medical Area Units and Specialty Hospitals to improve their delivery capacity, and quality and cost-efficiency of their services through several measures. First, financial support was to be given to develop the Medical Area Units into autonomous, self-managed, integrated health delivery units. Second, additional investments were to be conducted to improve medical equipment and information systems. Third, operational changes were to (a) better manage patient flows; (b) increase use of outpatient services; and (d) develop more effective referral and counter-referral systems between levels of care.

Financial support was to be provided through an Innovative Development Fund (IDF) that would increase capital investment in equipment and maintenance. Investments were aimed at replacing obsolete medical equipment and technology, improving management and organization, and allowing health facilities to adjust their production capacity in an evolving competitive market. The start-up capital of IDF was set at $200 million, and replenishment in subsequent years was to be based on IMSS budgetary capacity and execution of the investment program.

To further improve quality of service two additional measures were to be implemented. First, a quality assurance plan issued by a Quality Assurance Board operating within IMSS was to be executed to improve quality of health care services. Second, actions were to be taken to improve accountability towards the beneficiaries, including the establishment of a consumer advisory board at the national level, the use of client satisfaction surveys, and the introduction of beneficiary representatives to act as formal liaisons between IMSS and patients.3.4 Revised Components:

Following a review of compliance with the second tranche conditionality, a loan amendment was approved in November 8, 2001 to separate the second tranche of US$350 million into two tranches, a second tranche of US$200 million and a third tranche of US$150 million, and to extend the project’s closing date to provide IMSS with additional time to achieve the development objectives given delays as a result of the 2000 elections and policy decisions regarding the introduction of competition in IMSS financing and provision. Later, in April of 2002 following the review of the third tranche conditionality, both the Bank and the IMSS agreed that changes in the reform strategy made it impossible for the Government to comply with conditionality on the competitive elements of the reform within the project’s timeframe. A partial disbursement was found as the best alternative, recognizing the immense and successful effort in the part of IMSS with the implementation of many other aspects of the

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reform. An amendment to the Loan Agreement was approved in September, 2002, releasing a reduced (US$75 million) third tranche. This reduced the total loan amount from US$700 million to US$625 million.

3.5 Quality at Entry:

Satisfactory. The operational package (SECAL and TAL) supporting the overall reform process was subject to the quality assurance at entry process and received a rating of “2”. The Quality Assurance Group (QAG) Review Committee found the project to be highly consistent with the CAS assistance strategy and with the findings of previous economic and sector work. Observations regarding quality at entry of the SECAL were related to the scope of the reform package proposed. In particular, the QAG report indicated concern “whether the extent of the reforms being supported is commensurate with the size of this very large, $700 million, policy-based loan”. “The reforms included as conditionalities for the first and second tranche release of the proposed adjustment operation may not necessarily carry the reform very far in this direction”. “The apparent weakness of the loan conditionality raises questions about the appropriateness of a policy-based loan of this size, with two tranches and very limited action up-front”. The QAG was particularly concerned about the weakness of the conditionality on the introduction of market mechanisms in the IMSS, such as opting-out and choice of provider and noted that conditions regarding these areas of the reform were softened during negotiations. Notably, those conditions although weakened during negotiations were precisely the hardest conditions for IMSS to comply with. The Bank and IMSS preparation teams worked diligently during project preparation to ensure that all technical issues were clear and agreed and that preliminary actions were taken by the government to demonstrate sufficient buy-in and ownership over the reform process. Extensive work was carried out to link the TAL and SECAL actions, through a policy matrix, and to ensure the highest level of consistency between the overall objectives and the actions that were taken under the project.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:

The project made significant contributions to the achievement of the overall IMSS reform objectives and received the appropriate support from the inputs provided by the TAL to achieve its development objectives. Measured in terms of the achievement of overall project outcomes, the result has been satisfactory. The three overall reform goals to be supported by the SECAL were to: 1) improve the financial management of the health insurance system to ensure financial transparency, introduce new resource allocation mechanisms, and limit the fiscal impact of the proposed reforms; 2) strengthen the institutional and regulatory framework for health insurance to extend coverage to the self-employed and informal sector workers, ensure greater transparency and accountability among providers, develop measures for quality assurance and consumer rights, and promote consumer choice; and 3) improve the quality and efficiency of the IMSS health delivery system by supporting the decentralization of decision-making, restructuring of the health care delivery network around a population-based system, and the introduction of performance-based incentives for providers. In each of these three areas, important progress is evident.

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The most notable change that was supported by the project was the shift in the previous focus of investing in capital intensive projects, mainly new facilities, to a focus on modernizing the IMSS health system. Many interviewees cited the strong impact the project had in changing the organizational culture from an output based environment—how many hospitals and how much equipment—to a performance based culture with the focus on outcomes and modernization.

During project implementation, IMSS made important advances in terms of decentralizing budget preparation and management and procurement functions. Prior to the project, IMSS was entirely centralized and functioned under heavily politicized criteria for resource allocation. The project was an important element to shift to a more performance-based framework, including the introduction of increasing focus on equity, efficiency and quality. With respect to improvements in financial management, the change in focus is evident from efforts to introduce the Innovative Development Fund to generate a demand-based, competitive mechanism to allocate investment projects; to introduce technology evaluation and carry out a comprehensive review of the existing equipment; and to separate financing from provision through the introduction of performance-based contracts with decentralized providers. The combined efforts taken under the project led to visible changes in the way funds are managed and to an increasing emphasis on value-for-money in the use of public funds.

The expectations of broader reforms as initially intended in the SECAL project were only partially met, thereby limiting the overall project outcome rating. Section 4.2 documents the key project outputs with respect to each of the SECAL components.

4.2 Outputs by components:

As a sectoral adjustment operation, the project outcomes consist of the achievement of the loan conditionality included in the policy matrix. The policy matrix detailed three main policy areas, hereinafter referred to as “components”, which focus on: (i) meeting overall loan requirements; (ii) health finance and the regulatory framework; and (iii) institutional strengthening of IMSS. Within each of these areas, a number of key policy changes were defined. The first area, maintenance of general loan conditionality, was fully met. Throughout the execution of the loan, the government maintained appropriate reporting and was fully compliant with the loan legal covenants. Therefore, this section concentrates on reviewing the progress in achieving the main objectives under each policy goal in policy areas (ii) and (iii). The detailed matrix is provided in Annex 1. Component 2: Health Finance and Regulatory Framework

Following the approval of the changes to the Social Security law in 1997, IMSS was facing three major challenges: to ensure IMSS financial sustainability by instituting changes in financial management and its reserve policy; to promote greater decentralization and more cost-effectiveness in the provider network; and, to increase access and efficiency in the health insurance fund. To respond to these challenges, the Government, with the support of the SECAL, proposed to make several significant changes in the health finance and regulatory framework. The first set of changes was focused on establishing the Social Security Health Fund (SSHF) within IMSS that would improve the transparent management of health insurance funds

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and could eventually develop into a single-payer purchasing organization for the public sector. The second area was through increasing user choice and extending coverage of voluntary affiliation insurance within IMSS (opting-out and opting-in) to promote competition and extend access to the informal sector and the voluntarily-insured population. The third area was the development of purchasing mechanisms to focus resources on the population’s needs (increasing equity) and to improve resource allocation. The SECAL achieved satisfactory performance overall under this component as two of the three areas made considerable progress.

These areas were included in the SECAL as conditionalities within Component 2 of the project. Their compliance is summarized below.

a. Implementation of the SSHF. Accomplished. As a condition of Board presentation, the SSHF was approved by the Consejo Técnico of IMSS, via approval of operational guidelines according to the following principles: contributing to risk pooling; limiting adverse selection and incorporating catastrophic risks; promoting competition and user choice through subcontracting and opting-out; developing contractual and financing mechanisms that facilitate the development of an internal market at IMSS; maintaining the independent supervision capacity of the health system; and, developing a framework for investment through the Investment Development Fund (IDF). Prior to Board presentation, the Bank was provided with a draft agreement between the Ministry of Finance (SHCP) and IMSS regarding the regulatory and institutional framework for the management of IMSS reserves, with specific emphasis on the financing of health insurance reserves, management of outstanding liabilities and the IDF. Interviewees cite the SSHF as an important change in terms of planning and communication between the IMSS directorates. The SSHF continues to function to date.

The second tranche conditions for this area of Component 2 were fully accomplished as the SSHF continued to function throughout the life of the project. Moreover, the development of a long-term financing agreement between SHCP and IMSS and the integration of a joint budget management committee provided greater transparency in the policymaking and budgeting process. The Innovative Development and the Complementary Funds were established and provided an important increase in the level of investment and equipment. As shown in Table 1, Annex 8 between 1999 and 2001, more than $300 million was invested in equipment and maintenance. In addition, a total of US$22 million in medical equipment was financed through the Complementary Fund for 2001. Cost-effectiveness criteria were used in the selection of medical equipment.

The final element of the conditionality for this component was only partially accomplished. The development and implementation of the CANADE, beneficiaries database, was designed but not fully implemented due to the significant expansion in the scope of CANADE to include collections, auditing, and payment of socioeconomic benefits through the new SIAREFI System. As a result of these expanded functions, implementation is expected to last through 2004 and the cost is now estimated at more than ten times the appraisal estimate in the TAL. IMSS’ continued willingness to finance the shortfall is a demonstration of its commitment to this project and to the process of strengthening its financial administration. The failure to correctly estimate the cost and complexity of implementation is mirrored by the recent experience in the Costa Rica health sector reform project.

b. Increasing user choice and extending coverage of voluntary affiliation insurance within IMSS (opting-out and opting-in). Conditionality in this area of the reform was not

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accomplished. This was the most politically difficult aspect of the reforms. IMSS was unable to overcome the political constraints to: i) the introduction of competition in the insurance market; ii) the increased use of the private sector; and, iii) promotion of user choice as a means to instill efficiency in the system. With regard to opting-out, there was strong political opposition to increasing the number of people that could choose their health insurance company, or managed care organization (MCO). As a result, IMSS is not expected to transfer risk to private or public entities in the near future. Institutional priorities have been set to first reform the provider market and to introduce competition between public insurers and then to gradually introduce private competition. Nonetheless, those companies who had chosen private managed care insurance coverage as of December 2001 under the opting-out scheme continue to have the right to choose an alternative non-IMSS insurance provider. Improvements were made to the regulations and contracts that govern this procedure. Furthermore, Article 89 of Social Security Law revised and approved by National Congress in December 20, 2001, provides for collaboration agreements among IMSS and other public health service providers. Important progress was made in improving the regulatory framework. In 1999, the Ley General de Instituciones de Seguros y Sociedades Mutualistas was approved providing the regulatory framework for the private sector managed care market. This establishes the framework to introduce regulation to the insurance market through the Comisión Nacional de de Seguros y Fianzas; while the Ministry of Health, Secretaría de Salud (SSA) regulates quality and service provider standards. In addition, private insurance policies were made tax deductible to promote the development of the private insurance market. Within the SECAL framework, IMSS carried out some actions in order to simplify the regulation for contracting out clinical services in order to facilitate implementation and monitoring. IMSS created the “Comité Institucional de Suborgación de Servicios de Atención a la Salud” which developed a "Reglamento para la prestación indirecta de servicios parciales de atención a la salud". The presentation of these regulations to the Bank served as a basis for conditionality compliance for the first tranche release.

The process regarding opting-in achieved the numeric targets established under the loan by including an additional 200,000 people in the voluntary insurance programs, but then the IMSS limited access to these programs due to financial limitations and the slow introduction of the CANADE system.

The process of introducing greater user choice in the system experienced limited success. The target of introducing free choice of the primary physician in 30 AMGD was only partially met. Extensive efforts were made to pilot test a Family Medicine Improvement Process, that allows selection of physicians at the level of UMF, in 8 UMFs in 8 states (Baja California, Colima, Durango, Mexico DF, Edomex, Nuevo León, Oaxaca and Yucatán). Following pilot testing, it was determined that the financial cost of introducing capitated incentives for physicians would be prohibitive. Labor unions opposed the model as it exposed variations in productivity and did not provide equal benefits to all workers in the health service delivery team.

c. Introducing purchasing mechanisms. The final conditionality regarding health finance and regulation related to the introduction of purchasing mechanisms, including the establishment of management contracts with AMGDs was accomplished. The management agreements were to have included budgeting, performance assessment, and evaluation activities as well as the introduction of alternative provider reimbursement mechanisms such as capitation for PHC and

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DRGs for hospital reimbursement. In this regard, the IMSS fully met expectations. The IMSS established a clear contracting framework with the AMGDs and signed 37 contracts by year 2000. Contracts were also signed with UMAE in accordance with the target. The new administration has restructured the AMGD model and as a consequence the purchasing model is also under review. The purchasing arrangements were accompanied by important changes in resource allocation. First, extensive use of capitation was introduced as the main mechanism to allocate resources to delegations and to AMGDs. This reversed the historical budgeting patterns and targeted resources more closely to the population’s needs. IMSS has not made progress implementing capitated payment to General Practitioners (GPs). Commitment remains high but progress is unlikely in the next 12 months due to high cost of proposals including labor union requirements for additional incentives to other providers. At the same time, DRGs were implemented in 185 hospitals (exceeding the initial target of 15 hospitals). While DRGs have not yet been used as a payment mechanism, IMSS has designed the models to introduce case-mix adjusted payment and has carried out budgeting simulations.

Component 3: Institutional strengthening

This component aimed to foment changes in the organizational and functional structure of IMSS with regard to the decentralization process and to invest in the equipment needed to offer a higher level of service and to expand access. The following paragraphs summarize the results.

a. Corporate Restructuring and management decentralization of IMSS Health Care System . The objective of implementing a corporate restructuring was accomplished. During project implementation, IMSS decentralized many administrative and financial functions to the regional and local (delegaciones) level. These changes generated profound improvements in the institution’s overall efficiency. For example, purchasing of drugs and supplies was decentralized from the central level to the regional and local (delegaciones) level. To support these changes, technical assistance was provided under the TAL to develop a comprehensive corporate restructuring plan to support functional changes. At the provider level of AMGDs, IMSS made significant advances in the strengthening of the network of services in the medical area. Implementation was undertaken in 6 pilot AMGDs where instruments were developed to strengthen the medical areas, such as organizational changes, process design, clinical protocols, and regulations. Within the 6 pilot AMGDs, personnel, at all administrative levels, were trained and participated in the creation of therapeutic guidelines for care of common medical conditions.

b. Strengthening the IMSS health care delivery network. The expectations regarding strengthening of the delivery network were generally accomplished. The investment targets under the IDF and the CF were fully met and important changes were introduced in the allocation of investment funds. Limited progress was made in consolidating a new model for delivery of care but many changes were introduced to improve the quality of health care delivery services in the six pilot AMGD zones. More limited progress was made at the level of specialized, tertiary or quaternary care facilities. A national board for quality assurance was established to oversee the protection of patient’s rights. Extensive exit polls to measure user satisfaction were also instituted under the project.

c. Investment in technical assistance. Accomplished. The proposed investments in technical assistance were accomplished in support of the SECAL targets. The technical assistance provided

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the design of key elements required by the SECAL for fulfillment of the agreed targets. The technical assistance, through its support of extensive training, was also supportive of the cultural change that is critical to any process or organizational change.

d. Public awareness campaign. Not accomplished. The development of a public awareness campaign was never carried out. While internal communications mechanisms were developed as part of the project, no large-scale public information campaign was mounted, which would have been important in order to “sell” the reform to the general public. Although the objectives under Component 3 were accomplished, the lack of a public communication campaign diminished the overall impact of the reform in the eyes of the general public and IMSS employees. Interviewees cite the failure to develop a communications strategy as one of the major limitations of the reform process.

4.3 Net Present Value/Economic rate of return:

N/A

4.4 Financial rate of return:

N/A

4.5 Institutional development impact:

High. Despite the shortcomings related to implementation of many of the activities designed under the project, the institutional impact of the project was significant. The project provided IMSS with resources and ideas at a time of transition. The implementation of the SSHF and the IDF are signaled by key decision makers in the IMSS as fundamental elements in the process of creating a more modern IMSS, governed by increasing transparency and a performance-based culture. Efforts to design new, decentralized operational procedures and organizational structures were highly consistent with the vision of a more modern IMSS and had an important impact on the IMSS successful transition. While the unfinished agenda is still long, the organizational change in an institution of 350,000 employees operating in diverse environments is not a simple task. The project made a valuable contribution to improving the institutional framework for modernization.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:

Although the change of administration altered the pace of reform and introduced some important policy changes it did not deter the overall reform course. Most importantly, the new administration continue to support the reform effort, institutionalized a major part of the changes, and developed new strategies to face difficulties generated by the political environment around two of the main aspects of the original reform proposal, such as opting-out and free choice. The general public and the legislative body perceived the introduction of market mechanisms as the privatization of IMSS services. Labor Unions and the Senate resisted these changes. In response, the new administration reshaped the reform strategy and prevented the reform process from

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stalling. This reduced the scope of the original reform package to be supported by the SECAL. The original package, in hindsight, can be seen as highly ambitious given the complexity of the institution and the absence of the necessary political support to implement such changes. As mentioned before, the reform process lacked a strong communication strategy that would have been important to achieve consensus around the introduction of competitive mechanisms. An aggressive and clear strategy for managing the proposed changes in this area, and for communicating openly with stakeholders, is key to reduce opposition to the introduction of market mechanisms.

5.2 Factors generally subject to government control:

The relationship between the political authorities and the IMSS technical team regarding the implementation of the project appears to have been insufficient to achieve the difficult policy changes that were envisioned under the SECAL. Frequent changes in the Director General of IMSS also made it difficult for the government to exert the continuous and direct pressure and lobbying that were required to introduce the more difficult policy changes as discussed above. However, the government made important efforts to ensure the sustainability of the project by guaranteeing the adequate resources and budget from one administration to another. The continuity and communication of IMSS and SHCP in this regard allowed the projects that had sufficient political support to move forward on most of the reforms.

5.3 Factors generally subject to implementing agency control:

Many of the key stakeholders interviewed for the ICR preparation process cite the strong support to the reform package of the medical and finance directorates at the IMSS and stressed the linkages that existed between many of the areas of the IMSS and the PCU that were helpful in managing the reform projects, thus resulting in an excellent coordination work of project activities. Interviewees were unanimous in identifying the vision of the medical directorate and leadership of these two areas as critical elements for the advancement of the reform agenda. However, they also emphasized that information about reform content and procedures was insufficient even among middle management at the IMSS and noted that the “low profile” of the project and the lack of an information strategy impeded the development of broader public support of the reform process.

Throughout the life of the project, three successive changes in the IMSS Director General did not facilitate continuity and made it difficult to achieve strong ownership of the project. Nevertheless, the IMSS did keep the reform process alive and to made adjustments to the reform proposal according to the political reality of the moment.

The PCU managed the implementation of the project’s multiple policy actions in a satisfactory manner. The main issue regarding the project’s overall impact is with regard to the delays or failure to implement some of the reform measures to reach the “point of no return”. There are two key factors that should be highlighted in this regard. First, the initial delay of 8 months in establishing the PCU and naming the PCU director constitute a significant source of time lost in pursuit of the implementation. While this delay was overcome at a technical level by diligent work by the PCU and the extensive use of external consultants, the political opportunities were

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difficult to recover. The PCU was more limited to managing the contracting process of technical assistance rather than “paving roads” to facilitate the implementation of the reform process. The diverse and complex policy agenda established by the project design made it difficult for the PCU to focus sufficient energy on each project activity and to map a critical path from design to implementation.

5.4 Costs and financing:

The original design of two tranches each amounting to US$350 million was changed during implementation in an effort to accommodate to the political reality of the sector. Two amendments during the life of the project transformed the SECAL to a three-tranche operation of US$625 million instead of the originally negotiated two-tranche adjustment operation of US$700 million. Instead of two US$350 million tranches, the operation disbursed a first tranche of US$350 million as planned, a second tranche of US$200 million on November 2000 and a third tranche of US$75 million on September of 2002. The remaining US$75 million was cancelled upon mutual agreement between the Bank, the implementation agency and the Borrower in an effort to find the most suitable solution to changes in the reform strategy not reflected in the original design of the SECAL.

6. Sustainability

6.1 Rationale for sustainability rating:

Likely. The reform measures introduced under the project are likely to be sustained given the strong commitment of the IMSS to the reform agenda. The actions taken with regard to resource allocation, organizational restructuring and PHC model have undergone changes from the original design but the overall direction of the reforms has not been significantly changed. The IMSS continues to implement the DRG system to improve the allocation of resources, to adapt its corporate organizational structure, and to complete the SIAREFI information system.

6.2 Transition arrangement to regular operations:

As cited above, most of the activities financed by the project have been fully integrated into the IMSS organizational and functional structure. The new administration, which assumed management in 2000, integrated the functions of the PCU into the IMSS organizational structure and the key mechanisms developed under the project have been integrated into the IMSS operational structure.

7. Bank and Borrower Performance

Bank7.1 Lending:

Satisfactory. The participation of the Bank in the design and consensus building related to the reforms was considered exemplary by the key stakeholders interviewed during the ICR preparation process. Many of the stakeholders interviewed cited the important role played by the Bank in assisting with the development of a coherent policy framework and in establishing a road map to reform. The preparation process was characterized as a highly constructive process in

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which the Bank provided superior technical assistance to develop the conceptual framework for difficult reform issues. Before the provision of assistance, a number of reform initiatives had been developed by the government and Mexican institutions but no consensus had been built around the reforms. By singling out the IMSS as the target for reforms, the Bank assisted with the transition from platitudes to practice. The main drawbacks of the Bank’s participation in this process is with regard to the ambitious reforms that were envisioned and the failure to estimate correctly the importance of developing strategies to deal with the political and operational complexity of the organization and the sector itself. Paradoxically, the Quality at Entry review considered at the time that the Bank was requiring compliance with an insufficient package of reforms. However, it is important to highlight the need to design projects that are political as well as technically feasible for the borrower (see Quality at Entry section).

7.2 Supervision:

Satisfactory. Bank supervision efforts were satisfactory. Supervision during execution was timely, of good quality and with professional teams of appropriate composition. This adjustment operation was one of the first the Bank supported in the sector and during implementation, the Bank changed its supervision strategy and made important efforts to accommodate the political and institutional reality of the IMSS and of the sector to the implementation of the reforms in the SECAL conditionality. Using a highly debated and unusual practice, the Bank discussed with the Borrower several alternatives to introduce certain flexibility and support efforts to achieve project objectives. The SECAL Loan Agreement was amended twice in order to allow more time for the introduction of the most controversial aspects of the reform. The second tranche was split in two tranches in November of 2000 just before the new administration would take over. Later, in June 2002 the third tranche was reduced in scope and a partial disbursement was made while canceling the rest of the resources. This approach allowed both the client and the Bank to have a more fluid and open dialogue and to combine efforts when assessing the feasibility of implementing certain aspects of the originally proposed reform package.

7.3 Overall Bank performance:

Satisfactory. The Bank has been a major supporter of the health reform process in Mexico. With the design and implementation of the TAL and SECAL projects, the Bank supported a complex consensus-building process around social security reform –a highly debated topic in Mexico. The implementation of the TAL introduced technical instruments and activities necessary for policy change while the SECAL supported policy changes that could have taken even more time.

Borrower7.4 Preparation:

Highly Satisfactory. The government was very active in the preparation of the project. Through activities financed by the IMSS and the Japanese Grant, detailed preparation work was carried out to prepare the IMSS for rapid implementation of key activities identified during preparation. The borrower also took a proactive approach to building consensus among key stakeholders, prior to project implementation, which allowed the project to rapidly launch key activities. The consensus building and development of the institutional aspects that were critical to

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the project’s execution took longer than initially estimated, resulting in the 8 month delay in project implementation. Despite the delay, the preparation work was necessary and well executed.

7.5 Government implementation performance:

Satisfactory. In a project as complex as the IMSS reform project, strong support from other areas of the Government outside the IMSS are essential for success. The implementation of the TAL activities received in general adequate support although the IMSS was often left almost alone to develop its project implementation agenda and follow compliance with SECAL conditionality in a difficult institutional environment. It is true that this was the first adjustment operation in the social sectors in Mexico and a new initiative for both the Bank and the Borrower. The experience of the SECAL demonstrated that strong support from the Government to the institution implementing change is critical for the reform success. However, usually in countries in the region –and the IMSS project is not an exception--reforms in the health sector have been left to the institutions in charge of the sector with little or no involvement of other government agencies.

7.6 Implementing Agency:

Satisfactory. The PCU developed strong capacity to design and execute the technical assistance envisaged under the project. The PCU, as an external agency staffed mostly by consultants, was successful in the implementation of the technical inputs under the TAL but had more limited success in institutionalizing the changes proposed under the SECAL. Although the coordination between the PCU and several of the IMSS directorates was very good, the PCU was deficient in its leverage for “paving the road” for implementation of the reforms in the SECAL in a highly complex institutional and political environment. This experience shows that it is not only important for the implementing agency to have very strong and constant support from other government agencies, but a PCU configured strategically to develop highly complex technical assistance inputs under the TAL and strongly equipped with reform visionaries and sufficient leverage to drive the implementation of the reforms under the SECAL.

7.7 Overall Borrower performance:

Satisfactory. The government accepted the challenge of launching a comprehensive reform process, over a very short time, of one of the country’s largest and more complex institutions in the sector. IMSS accomplished major changes in its financial mechanisms and its corporate structure and successfully internalized the reform agenda in a difficult institutional environment. Expectations were only partially met with regard to the introduction of competition, changes in the family medicine model and the introduction of provider payment mechanisms.

8. Lessons Learned

Because the reform in Mexico was supported by the Bank with a SECAL/TAL package and not an individual investment operation, lessons learned from the design, implementation and supervision of both projects in support of one reform process need to be considered in parallel. This section analyzes lessons learned from both Bank operations, the SECAL and the TAL acting together to support one reform process. Some of the lessons learned in this section also apply to

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the TAL and are presented in the TAL ICR and vice versa. In addition, many of the activities carried out under this project have been proposed in other countries and supported by different types of instruments, permitting additional lessons learned.

While this is not an intensive learning ICR, the preparation process has considered extensive stakeholder analysis based on the results of a qualitative and quantitative evaluation of the project. On the qualitative side, a team of external consultants was contracted to collect information. More than 30 interviews, organized in five modules, took place in Mexico with key stakeholders. These interviews provide an in-depth view into both the TAL and the SECAL projects objectives and outcomes. This was complemented with an in-depth review of the project objectives, activities and outcomes, in the context of a logical framework that substantiated many of the ICR findings regarding project implementation. Following approval of the ICR, the Bank plans to hold a workshop with the IMSS to discuss the ICR findings and the lessons learned.

This section is divided into three parts. A more general part addressing project design and implementation issues is followed by a discussion of lessons learned, organized according to the main strategies of the reform process: (1) overall comments on project design and implementation; (2) issues related to the separation of functions, resource allocation and reimbursement mechanisms (including DRGs); and (3) the redefined primary health care model.

Part One: Project design and implementation

8.1 In order to increase the probability of success, reforms should consider the particular organizational and political environments where the reform process is to be launched and implemented. When difficult reforms are to be introduced, such as opting-out or consumer choice of physicians, the Bank and the Borrower should ensure wide stakeholder support for the proposed measures to avoid future opposition. In the case of this project, there was internal support for these measures and a belief that political and stakeholder support would be obtained later on. The failure to account for the political and organizational complexities related to implementing elaborate policy changes will undermine the probability of success.

8.2 Policy-based lending, such as the SECAL, is appropriate if difficult policy decisions will be fully supported by the central government and executive branch. A lack of support by either the Ministry of Finance or the Executive Branch introduces considerable risk for any adjustment project that strives to achieve difficult policy goals.

8.3 Policy-based adjustment programs in the social sectors require more intensive supervision than regular investment operations. The Bank could develop new strategies for the supervision of these types of operations, incorporating strong technical work with parallel high level policy dialogue with the client. 8.4 The Bank and the client could support the creation of a monitoring and evaluation system capable of keeping a close eye on the synergy that should accompany the implementation of a SECAL with the technical support of the TAL. Close coordination between the actions of the SECAL and the TAL are essential to maximize impact. One interviewee cited the need to have a ‘maintenance contract’ whereby the Bank provides a higher level of technical support and supervision throughout the execution of a complex adjustment loan.

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The Bank should consider and carefully evaluate an array of strategies to evaluate compliance with conditions for tranche releases. A shared exercise with the client invites an open exchange of views and a mutual understanding of the limitations of the Borrower, the implementing agency and the Bank. 8.5 Reform processes need a clearly identified strategist and visionary body with whom the Bank should maintain close coordination and mutual support. Without mutual collaboration between the Bank and an identifiable force that moves the reform in both the technical and the political arenas, there is high risk for the Bank as well as for the Borrower of losing connection with the actual implementation process and undermining the capability of evaluating and implementing any modifications to the reform plan as needed.

8.6 Reform processes should identify “early wins” that will provide buy in and political capital to make more difficult structural changes down the road. The IMSS project was very low profile, both within the Institute and to the general public. While this is partially a function of the Institute’s size, it is also an issue related to project design and implementation strategy. The project included a number of sophisticated policy changes but few tangible results that were ‘sellable’ to politicians and to IMSS members. The possibility of producing ‘early wins’ is clearly related to reaching the point of “no return” in the reform process.

8.7 Although “early wins” are necessary, they are not sufficient. A strong communication strategy tailored to different audiences is imperative to reach consensus and support for the reform process. Health reform projects should insist in supporting a well thought communication strategy to accompany sector change.

8.8 Bank support to a reform process might be more effective when designed as an investment operation at the beginning of the process to set up the necessary conditions to enable policy implementation, followed by disbursements of resources linked to the achievement of specific goals through policy change. The implementation of parallel operations, including both the investment and policy framework, demonstrates the difficulty in maintaining a strict relationship between technical assistance and policy change. Investment and technical assistance usually precede the more difficult policy changes and clarify the exact scope of reform that is possible. The combination of adjustment and TA loan is better suited to second generation lending, where an institution has already received technical assistance and the definition of policy conditionality better reflects the institutional capacity to achieve change.

8.9 A reform process of this nature is a long term endeavor; successful implementation of the TAL and the SECAL should plant the seed for long term change. Project design and implementation should include support for special activities to ease understanding of the reform major objectives in the presence of government transitions, as well as to tailor the reform major activities to a particular government administration’s sector strategy.

8.10 A SECAL/TAL package requires more than the usual structure of an investment project PCU. The implementing agency needs to be equipped with a PCU that can do more than the successful processing of technical assistance inputs under the TAL. The PCU should have

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time to devote to the policy debate and implementation, aside from the time-consuming efforts of managing contractual arrangements for the production of technical inputs.

Part Two: Separation of functions

8.11 A balanced depth and parallel pace of required legal changes and necessary technical developments should be always maintained in a reform process. Nearly all of the changes carried out under the IMSS reform program were instituted on purely technical grounds. Reforms do not occur only with the support of policy conditionality; it is necessary to have legal changes accompanying the technical changes that the adjustment operation aims to achieve.

8.12 The strategy for implementating activities supporting the separation of financing and delivery of services should include actions that are both “top down” and “bottom up” to address institutions that are vertically integrated as in the case of the IMSS. The real separation of financing and delivery in institutions that are regulators, payors and providers requires political decisions at the highest level and legal changes, as well as a “bottom up” approach introducing management contracts and changing the institutional culture.

8.13 In order for the separation of functions to promote real efficiency gains, policy change must be made to reflect the introduction and implementation of incentives in the payment mechanism to health care providers. While the introduction of acuerdos de gestión promoted a shift to a performance based framework and was consistent with the decentralization process, the failure to link provider payments with performance has been a limiting factor of the reforms. If providers are to actively engage in the performance based framework and the contracting mentality then they have to receive adequate incentives to play the new role. These include: (a) transferring sufficient risk to IMSS providers and IMSS hospital managers so that reward and sanctions are directly perceived; (b) the introduction of competition among hospitals, allowing the insured population to change providers and to shift resources based on the consumer’s decision. While the need for competition is much more limited at the primary care level, there is also scope to introduce consumer choice among AMGDs; and (c) economic incentives are to be assigned according to the evaluation of appropriate indicators and the compliance with several institutional goals.

8.14 The implementation of the DRGs is a complex, highly technical issue that must be accompanied by concomitant policy changes that allow its introduction to potential users and its use as a powerful instrument to allocate financial resources.

Part Three: Redefining the health care model

8.15 The implementation of competitive elements in the health care financing and provision model should be supported by decisive policy change that embraces both strategy and timing issues. This is necessary to smooth the transition and to diminish strong resistance from interest groups. In order to ensure that significant changes in the health care delivery model are made it is important to aim for broader changes than those restricted to the

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introduction of competitive elements such as “free choice”: extensions in coverage, changes in protocols, introduction of quality management techniques, among others. These changes will also allow the population and the health care workers to better understand the policy changes that are proposed.

8.16 Policy changes in the health care delivery model should be managed in close connection with financial, institutional and corporate reforms; otherwise the overall impact of the reform is diminished in all areas. The design of changes in health care models are unlikely to succeed if they do not consider the overall sustainability and complexity of the organizational change. This requires planning and coordination between medical, financial and administrative structures in the organizations.

9. Partner Comments

(a) Borrower/implementing agency:

Comments from the Instituto Mexicano de Seguridad Social (IMSS)

This was an important operation for IMSS because it triggered changes that otherwise might not have been forthcoming. The work with the Bank staff was always respectful and enriching. We had full support from Mr. Olivier Lafourcade and all the office in Mexico, and the teams coming from Washington were of very high quality, which enriched the development of the projects.

This was a project that was politicized early on, and it was difficult to overcome resistance in the early months (there were delays even to sign). The project related to reforms that have proven to be complex in many countries, and perhaps that was an important cause of that initial condition.

Perhaps it would be useful to distinguish in the “matrix of compromises”* the administrative and the political issues. In a project as large and complex as this one, both types of projects are difficult, but the organization has much more control on the administrative than in the political goals.

The alignment of the TAL projects with SECAL´s goals is key. The administrative components of both loans require substantial consultancy, and a component that might have been useful would have been a contract with a consultant to prepare Terms of Reference and to advise on the technical development of the project. IMSS has followed this approach with success in Information Technology projects. This has to do with the proper role of the Unit to Coordinate the Project (UCP): should it be a project manager or should it develop the TOR and do the detailed follow-up of the contracts? In a large project with diverse topics, perhaps the role of project manager is more appropriate.

*"matrix of compromises" is the same as policy matrix.

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Comments from Secretaria de Hacienda y Credito Publico (SHCP):

1) La Secretaría de Hacienda considera que la participación de Banco Mundial en este proyecto ha sido muy positiva y proporcionó valor agregado. En particular se observa que el trabajo del Banco ha sido valioso y enriquecedor en la etapa del diseño de la reforma. La aportación del Banco fue con la experiencia de técnicos altamente calificados que contribuyeron a diseñar una reforma de gran alcance.

2) Igualmente se considera que para este tipo de proyectos de ajuste, lo trabajos de supervisión del Banco adquieren un importancia fundamental. Como es bien sabido la implementación de los Programas de Reforma enfrentan normalmente dificultades y resistencias que ponen riesgo el logro de sus objetivos. De esta forma, un trabajo de supervisión del Banco que sea muy estrecho y constante permitirá identificar con antelación las dificultades y por ende tomar en forma oportuna las medidas correctivas que correspondan. Por estas razones, podría ser conveniente que el programa de trabajo de las actividades de supervisión se diseñe desde la etapa de preparación del proyecto y que la realización de las misiones se apegue a éste en forma estricta.

3) Otro elemento que podría contribuir al logro de los objetivos del proyecto, es contar durante la fase de ejecución del proyecto con una facilidad de asistencia técnica del Banco que permita respaldar trabajos que surjan como necesarios.

4) Para efecto de las lecciones obtenidas no sobra reiterar la recomendación que el Reporte de Terminación otorgue especial atención a identificar las causas y factores que originaron impidieron el alcance de algunas metas o que representaron las dificultades que no pudieron ser vencidas.

5) Una lección aprendida en lo que corresponde al grupo de trabajo para la preparación de operaciones de este tipo es la importancia que tiene el contar dentro de la estructura del Gobierno Federal con un funcionario "designado" que sea responsable de la preparación proyecto. Es igualmente importante que este funcionario participe desde la fase inicial de diseño de la reforma. Como requisitos, el responsable además del conocimiento del sector, debe tener conocimiento en materia económica y financiera.Asimismo, y por las implicaciones que tienen proyectos de reforma, es recomendable que dentro de la estructura gubernamental, preferentemente atienda en línea directa al titular del ministerio de hacienda del país. El funcionario responsable además de actuar como promotor del proyecto, debe contar con atribuciones para poder acordar temas de gran alcance e impacto en el país.

6) Por otra parte, y no obstante el trabajo profesional y de alta calidad de los diversos oficiales que tuvo proyecto, el Gobierno de México considera con mucha preocupación que el Banco Mundial continúe sufriendo de una rotación de personal muy intensa. Se considera que en algún grado la efectividad de la supervisión que el Banco otorgó a los proyectos del IMSS fue mermada como consecuencia de este problema. Por esta razón se recomienda al Banco Mundial tomar las mediadas para reducir este problema.

(b) Cofinanciers:

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N/A

(c) Other partners (NGOs/private sector):

N/A

10. Additional Information

ICR Team:Maria Luisa Escobar (Lead Economist, ICR Task Leader)James Cercone (Health Economist and Health Policy Analyst)Alvaro Salas ( Physician)Panagiota Panopoulou (Health Economist)Claudia Macías (Operations Officer)Lourdes Noel (Program Assistant)

Counterpart team: Gabriel Martínez, Kirsten Fink, Beatriz Zurita, Onofre Muñoz, Blanca Conessa, Ismael Diaz, Alejandro Peralta y Maria Guadalupe Perez.

Comments provided from:Evangeline JavierSusana AugustoHelena RibeMark HagerstromHelen Saxenian

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Annex 1. Key Performance Indicators/Log Frame Matrix

Matrix of Policy Actions(As appraised in May, 1998)

Page 1 of 7A. MATRIX OF POLICY ACTIONS

As appraised in May, 1998

(Actions in italics are included in Letter of Sector Policy only, to be monitored as part of the overall program implementation

Component

First Tranche

Steps to be taken between First and Second Tranche

(Mid-Term Review)

Second Tranche

I. General Conditions A. Maintenance of Overall Policy Framework Presentation of Signed Policy Letter

Compliance with loan agreement effectiveness conditions

Compliance with loan agreement section 2.02 (d) conditions

II. Health Finance and Regulatory Framework A. Reforms to Health Insurance Financing in

IMSS

SSHF approved by Consejo Técnico of IMSS, via approval of operational guidelines according to following principles: (i) contributing to risk pooling, limiting

adverse selection, and incorporating catastrophic risks;

(ii) promoting competition and user choice, notably through subcontracting and opting-out;

(iii) developing contractual and financing mechanisms that facilitate the development of an internal market in IMSS;

(iv) maintaining the independent supervision capacity of the health system; and

(v) framework for investment through IDF; IMSS legal opinion confirming legal basis of SSHF; and

The SSHF has been operating since its inception in a manner fully consistent with the SSHF Operational Guidelines, the SSHF Implementation Plan and applicable SSHF reserves and liabilities management regulations;

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Page 2 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

Presentation of Terms of Reference for strengthening the supervisory capacity of existing control mechanisms for financial and health care delivery regulations, including:

I. quality of care and user satisfaction;

II. monitoring management contracts;

1 between SSHF and

MCOs, and MCOs and Providers; III. increasing the availability of user

information; IV. financial reporting and solvency

requirements; and Presentation of a draft agreement between the SHCP and IMSS regarding the regulatory and institutional framework for the management of IMSS reserves, with specific emphasis on the financing of health insurance reserves, management of outstanding liabilities and the IDF

Review of the design of the regulatory and supervisory framework proposed for the SSHF; Issuance of regulations for the management of the financial reserves of the IMSS health insurance fund, including inter alia:

1. annual targets for IDF, management of other liabilities and general reserves;

1. investment instruments; 2. guidelines for acceptable levels of

financial risk; 3. scope and timing of investments,

and 1. minimum levels of liquidity

The Guarantor and IMSS have prepared a joint strategy for sound long-term management of IMSS´ liabilities; and IMSS has established and is operating a database of IMSS beneficiaries, to serve as a mechanism for administering and monitoring: (a) medical benefits paid by IMSS for its beneficiaries; and (b) health service provider choices made by such beneficiaries

1 These refer to purchasing agreements, or administrative arrangements, as referred to in the loan agreement

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Page 3 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

B. Increasing user choice and extending

coverage of voluntary affiliation insurance within IMSS (opting-out and opting-in)

(i) Facilitating user choice and

competition amongst Medical Area Units and MCOs;

(ii) Promoting user choice of primary

physicians; and

Presentation of Draft Regulations allowing for IMSS affiliates to opt out1 through the prestacion indirecta program; and Presentation of an action plan for choice of primary health care physicians

Draft strategy allowing for IMSS affiliates to choose among Medical Area Units; Issuance of regulations and guidelines for firms to choose between IMSS and public and private MCOs (opting-out), covering inter alia: (i) integrated health care model (benefits

package) and financing; (ii) instruments to limit risk selection; (iii) minimum quality standards; (iv) financial standard; (v) protection of users' rights; (vi) penalties for non-compliance; and (vii) supervision and evaluation Issuance of regulations and guidelines by IMSS allowing for free choice of physician in selected Medical Area Units; and

IMSS has prepared a strategy to allow beneficiaries to choose the Medical Area Unit from which they will obtain medical services.; IMSS has been allowing, and continues to allow, IMSS beneficiaries to choose alternative non-IMSS insurance providers in order to be covered by public or private medical managed care provision schemes, all in compliance with regulations issued by IMSS to that effect (which regulations, inter alia, satisfactorily protect beneficiaries’ rights by requiring minimum service quality and financial soundness standards).; IMSS has been allowing, and continues to allow (in compliance with regulations issued by IMSS to that effect), all IMSS beneficiaries in at least thirty Medical Area Units to choose their own primary care physician from among those IMSS physicians belonging to the beneficiaries’ Medical Area Unit;

1 In the IMSS case, “opting-out” refers to a system where beneficiaries choose to receive health benefits through alternative providers, which will guarantee a minimal level of service provision in exchange for a fixed fee based on a risk-adjusted capitated payment scheme. However, they remain part of overall social security financing and insurance system. Conversely, “opting-in” refers to new entrants into the IMSS health care system, ostensibly from the self-employed and informal sector populations.

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Page 4 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

(iii) Promoting the extension of coverage

through voluntary affiliation insurance (opting-in)

Issuance of regulations and guidelines by IMSS governing opting-in

In compliance with regulations issued by IMSS to that effect, at least 200,000 new beneficiaries1 have (during the period specified in the Loan Agreement) enrolled in the IMSS publicly subsidized insurance system for the self-employed and informal sector workers

C. Development of Purchasing

Mechanisms

Presentation of draft model management contracts and guidelines for contracting between: (a) IMSS and Medical Area Units; and (b) IMSS and Specialty Hospitals; and Presentation of Terms of Reference for developing a patient classification system, including an Action Plan for implementing a hospital payment system based on diagnosis-related groups (DRGs), or some other patient classification system

Review progress on implementation of purchasing mechanisms and the introduction of new provider reimbursement mechanisms

IMSS has signed and is implementing management contracts with at least thirty Medical Area Units, whereby, inter alia: (i) IMSS shall gradually allocate resources to such Medical Area Units through risk-adjusted capitation mechanisms; (ii) the performance of the Medical Area Units shall be assessed through specified evaluation systems; and (iii) incentives shall be established to reward improved Medical Area Unit health service delivery performance; Such capitation mechanisms are being fully applied, on a pilot basis, to reimburse primary care physicians (in at least five of said thirty Medical Area Units) for their health delivery services;

1 “New beneficiaries” excludes students (enrolling as such) and State or municipal workers, and the number of “new beneficiaries” is calculated on a net basis (thus excluding those who enrolled in, but subsequently dropped out of, the IMSS social security voluntary or obligatory regimes during the measurement period in question).

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Page 5 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

IMSS has presented to the Bank an evaluation of its experience with the implementation of the management contracts referred to above; (IMSS has signed and is implementing management contracts, with at least five of its Specialty Hospitals, whereby, inter alia, IMSS is fully allocating resources to such Specialty Hospitals through diagnosis related or patient classification mechanisms; Fifteen IMSS hospitals (other than the five Specialty Hospitals mentioned above) have been using, and continue to use, diagnosis related or patient classification systems for internal administrative purposes

III. Institutional Strengthening of IMSS A. Corporate Restructuring and management

decentralization of IMSS Health Care System

Presentation of Action Plan and timetable for the corporate restructuring of IMSS Health Care System (“Modelo Integral de Atención a la Salud”); and

Presentation of a Corporate Restructuring Plan for IMSS health care system, including organizational and functional changes for central level administration, development of Medical Area Units, management of the health delivery network; and

IMSS has been, and continues to be, reforming its corporate structure in compliance with the terms and timetable of a restructuring plan issued by IMSS (which plan, inter alia, emphasizes the decentralization of IMSS administration to, and greater autonomy for and competition among, Medical Area Units);

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Page 6 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

Approval by IMSS of guidelines for the operation of the Medical Area Units

Evidence of progress in designing and implementing restructuring plans in at least ten budgetholding Medical Area Units.

At least fifteen Medical Area Units and five Specialty Hospitals have each prepared operational development plans, for purposes of reforming administration of such Medical Area Units and Specialty Hospitals; and Each of said fifteen Medical Area Units and five Specialty Hospitals is implementing its operational development plan referred to above, in accordance with such plan’s terms.

B. Strengthening the IMSS health care

delivery network

Issuance of an IDF Operational Manual, including eligibility criteria and procedures to request financial support from the IDF for development purposes, along with a 3 year investment program for investment and approval of subprojects

Compliance with operating guidelines for IDF; and The establishment of a Quality Assurance Board with a fully-defined membership, organization, authority, functions, and responsibilities, and a draft Quality Assurance Program covering operating procedures and an implementation plan.

At least 60 percent of the funds included in the IDF Investment Program have been committed in accordance with the provisions of the IDF Operational Manual; At least half of said committed funds have already been disbursed; IMSS has been, and continues to be, improving the quality of its health care delivery services, particularly in at least five Medical Area Units in urban zones, in accordance with the terms of a quality assurance plan issued by IMSS and under the guidance of a quality assurance board operating within IMSS; and

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Page 7 of 7

Component

First Tranche


(Mid-Term Review)

Second Tranche

IMSS has taken, and continues to take, actions aimed at improving accountability towards its beneficiaries, which actions include establishment of a consumer advisory board at the national level, use of client satisfaction surveys and acceptance of beneficiary representatives to act as formal contacts between IMSS and patients

C. Investment in Technical assistance

D. Public Awareness Campaign on IMSS Reform

Presentation of Communication Strategy for Public Awareness Campaign

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Matrix of Policy Actions(As amended in November 2000)

Page 1 of 4B. MATRIX OF POLICY ACTIONS

As amended in November, 2000

Component

Second Tranche

Third Tranche

I. General Conditions

Compliance with loan agreement section 2.02 (d) conditions II. Health Finance and Regulatory Framework

A. Reforms to Health Insurance Financing in IMSS

The Guarantor and IMSS have prepared a joint strategy for sound long-term management of IMSS’ liabilities.

The SSHF has been operating since its inception in a manner fully consistent with the SSHF Operational Guidelines, the SSHF Implementation Plan and applicable SSHF reserves and liabilities management regulations.

. IMSS has established and is operating a data base of IMSS beneficiaries, to serve as a mechanism for administering and monitoring: (a) medical benefits paid by IMSS for its beneficiaries; and (b) health service provider choices made by such beneficiaries.

B. Increasing user choice and extending coverage of voluntary affiliation insurance within IMSS (opting-out and opting-in)

IMSS has prepared a strategy to allow beneficiaries to choose the Medical Area Unit from which they will obtain medical services

(i) Facilitating user choice and competition amongst Medical Area Units and MCOs;

IMSS has been allowing, and continues to allow, IMSS beneficiaries to choose alternative non-IMSS insurance providers in order to be covered by public or private medical managed care provision schemes, all in compliance with regulations issued by IMSS to that effect (which regulations, inter alia, satisfactorily protect beneficiaries’ rights by requiring minimum service quality and financial soundness standards).

(ii) Promoting user choice of primary physicians; and,

IMSS has been allowing, and continues to allow (in compliance with regulations issued by IMSS to that effect), all IMSS beneficiaries in at least thirty Medical Area Units to choose their own primary care physician from among those IMSS physicians belonging to the beneficiaries’ Medical Area Unit.

(iii) Promoting the extension of coverage through voluntary affiliation insurance (opting-in)

In compliance with regulations issued by IMSS to that effect, at least 200,000 new beneficiaries have, during the period beginning January 1, 1998 and ending no earlier than two months prior to the Second Tranche Release Date, enrolled in the IMSS social security voluntary regime (régimen voluntario del Seguro Social) referred to in Article 6.II of the Social Security Law or voluntarily enrolled in the IMSS social security obligatory regime (régimen obligatorio del Seguro Social) pursuant to the Second Title, Chapter IX of the Social Security Law. For purposes of this paragraph, “new beneficiaries” excludes students (enrolling as such) and State or municipal workers, and the number of “new beneficiaries” is calculated on a net basis (thus excluding those who enrolled in, but subsequently dropped out of, the IMSS social security voluntary or obligatory regimes during the measurement period in question).

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Page 2 of 4

Component

Second Tranche

Third Tranche

C. Development of Purchasing Mechanisms

(a) IMSS has signed and is implementing administrative arrangements with at least thirty Medical Area Units, whereby, inter alia: (i) IMSS shall gradually allocate resources to such Medical

Area Units through risk-adjusted capitation mechanisms; (ii) the performance of the Medical Area Units shall be

assessed through specified evaluation systems; and (iii) incentives shall be established to reward improved Medical

Area Unit health service delivery performance;

(b) Such capitation mechanisms are being fully applied, on a pilot basis, to reimburse primary care physicians (in at least five of said thirty Medical Area Units) for their health delivery services; and

(c) IMSS has presented to the Bank an evaluation of its experience with

the implementation of the administrative arrangements referred to in subparagraph (a) of this paragraph.

(d) IMSS has signed and is implementing administrative arrangements, with at least five of its Specialty Hospitals, whereby, inter alia, IMSS is fully allocating resources to such Specialty Hospitals through diagnosis related or patient classification mechanisms. (e) Fifteen IMSS hospitals (other than the five Specialty Hospitals mentioned in subparagraph (a) of this paragraph) have been using, and continue to use, diagnosis related or patient classification systems for internal administrative purposes.

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Page 3 of 4

Component

Second Tranche

Third Tranche

III. Institutional Strengthening of IMSS

A. Corporate Restructuring and management decentraization of IMSS Health Care System

IMSS has been, and continues to be, reforming its corporate structure in compliance with the terms and timetable of a restructuring plan issued by IMSS (which plan, inter alia, emphasizes the decentralization of IMSS administration to, and greater autonomy for and competition among, Medical Area Units). (a) At least fifteen Medical Area Units and five Specialty

Hospitals have each prepared operational development plans, satisfactory to the Bank, for purposes of reforming administration of such Medical Area Units and Specialty Hospitals.

(b) (b) Each of said fifteen Medical Area Units and five Specialty

Hospitals is implementing its operational development plan referred to above, in accordance with such plan’s terms.

B. Strengthening the IMSS health care

delivery network

As of a date no earlier than two months prior to the Second Tranche Release Date: (a) at least 60% (sixty percent) of the funds included in the IDF Investment Program have been committed through specific contracts with suppliers or contractors for purposes set forth in the IDF Investment Program and by means consistent with the provisions of the IDF Operational Manual; and (b) at least half of said committed funds have already been disbursed from the IDF to said suppliers or contractors for said purposes.

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Page 4 of 4

Component

Second Tranche

Third Tranche

IMSS has been, and continues to be, improving the quality of its

health care delivery services, particularly in at least five Medical Area Units in urban zones, in accordance with the terms of a quality assurance plan issued by IMSS and under the guidance of a quality assurance board operating within IMSS.

IMSS has taken, and continues to take, actions aimed at improving accountability towards its beneficiaries, which actions include establishment of a consumer advisory board at the national level, use of client satisfaction surveys and acceptance of beneficiary representatives to act as formal contacts between IMSS and patients.

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Component

Third Tranche

I. General Conditions

Compliance with loan agreement section 2.02 (e) conditions II. Health Finance and Regulatory Framework

A. Reforms to Health Insurance Financing in IMSS

The Social Security Health Fund (SSHF) has been operating since its inception in a manner fully consistent with the SSHF Operational Guidelines, the SSHF Implementation Plan, applicable SSHF reserves and liabilities management regulations, and annual agreements with the Guarantor’s Secretariat of Finance and Public Credit (SCHP).

IMSS has expanded the scope of the beneficiaries data base system design to include collections, auditing and payment of socioeconomic benefits and has allocated financial resources to develop and implement such changes.

B. Increasing user choice and extending coverage of voluntary affiliation insurance within IMSS (opting-out and opting-in)

IMSS has designed and implemented a pilot experience to evaluate the impact of choice of primary care physician from among all possible IMSS physicians by IMSS beneficiaries. IMSS has started to adapt its primary health care delivery model (in compliance with regulations issued by IMSS to that effect) in order to improve patient satisfaction and quality of health care.

(i) Facilitating user choice and competition amongst Medical Area Units and MCOs;

IMSS has been allowing, and continues to allow those beneficiaries that by December 31, 2001 were choosing alternative non-IMSS insurance providers in order to be covered by public or private medical managed care provision schemes to continue exercising such choice, all in compliance with regulations issued by IMSS to that effect. IMSS has opened opportunities for collaboration among public providers for the provision of medical services.

C. Development of Purchasing Mechanisms IMSS has designed new management contract models to be signed between IMSS and Medical Area Units or Specialty Hospitals a manner consistent with IMSS’ new organizational structure as established in the Social Security Law published in the Guarantor’s official gazette (Boletín Oficial) on December 20, 2001.

IMSS has developed a strategy for deconcentration of 25 Specialty Hospitals according to administrative agreements that include budget allocation according to diagnosis related or patient classification mechanisms, which is ready for implementation on the Guarantor’s fiscal year 2003. IMSS has developed a methodology to incorporate case mix adjustment into the above mentioned budget allocation mechanism and has developed financial projections and estimated the impact of case mix adjustment.

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Annex 2. Project Costs and Financing

N/A

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Annex 3. Economic Costs and Benefits

N/A

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Annex 4. Bank Inputs

(a) Missions:Stage of Project Cycle Performance Rating No. of Persons and Specialty

(e.g. 2 Economists, 1 FMS, etc.)Month/Year Count Specialty

ImplementationProgress

DevelopmentObjective

Identification/Preparation12/16/1996 4 TASK MANAGER (1);

HEALTH SPECIALIST (2); IMPLEMENTATION SPL (2)

04/11/1997 8 HEALTH ECONOMIST (1); HEALTH SPECIALIST (1); SOCIAL SECURITY SPL (1)

09/06/1997 6 TASK MANAGER (1); HEALTH ADM. SPEC. (1); HOSPITAL SPL (1); IMPLEMENTATION SPL (1)

09/16/1997 10 TASK MANAGER (1); ECONOMIST (1); IMPLEMENTATION SPL (2)SOCIAL SECURITY SPL (1)

Appraisal/Negotiation10/24/1997 4 TASK MANAGER (1);

HEALTH ADM. SPEC. (2); FINANCIAL MANAGEMENT (1)

Supervision09/14/1998 3 TASK MANAGER (2);

PUBLIC HEALTH SPEC. (1)

10/16/1998 1 PUBLIC HEALTH SPEC. (1) S S04/20/1999 4 TTL - HEALTH (1);

IMPLEMENTATION SPL (1); HEALTH FINANCE SPL (1); SECTOR LEADER (1)

S S

06/30/1999 2 TTL-HEALTH (1); IMPLEMENTATION SPL (1)

S S

10/08/1999 2 TTL - HEALTH (1); IMPLEMENTATION SPECIAL (1)

S S

02/18/2000 3 TTL - HEALTH (1); SOCIAL SECURITY SPEC. (1); CONSULTANT (1)

S S

08/12/2000 6 HEALTH MANAGEMENT SP. (2); SOCIAL SECTOR SP. (1); OPERATION ANALYST (1); FINANCIAL MANAGEMENT (1); SOCIAL SECURITY H. SP. (1)

S S

10/13/2000 4 HEALTH MGT. SPEC. (2); FINANCIAL MGT. SPEC. (1);

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OPERATIONS ANALYST (1)01/16/2001 8 HEALTH MGT.SPECIALIST

(1); SOCIAL PROGRAMS SPECIA (1); ECONOMIST (1); OPERATIONS OFFICER (1); SYSTEMS & HEALTH MGT.S (1); PUBLIC HEALTH SPECIALI (1); FINANCIAL MGT SPECIALI (1); SOCIAL SECTOR SPECIALI (1)

06/19/2001 2 HEALTH MGT. SPECIALIST (1); OPERATIONS OFFICER (1)

ICR11/13/2001 6 SR. HEALTH SPEC. (1);

HEALTH MGT. SPEC. (1); OPERATIONS OFFICER (1); SYSTEMS & HEALTH MGT. (1); PUBLIC HEALTH SPEC. (1); ECONOMIST (1)

S

04/09/2002 6 SENIOR HEALTH SPECIALI (1); HEALTH MGT. SPECIALIST (1); OPERATIONS OFFICER (1); SYSTEMS AND HEALTH MGT (1); PUBLIC HEALTH SPECIALI (1); ECONOMIST (1)

S

09/16/2002 3 HEALTH ECONOMIST (2); OPERATIONS OFFICER (1)

S

11/08/2002 2 HEALTH ECONOMIST (1); OPERATONS OFFICE (1)

(b) Staff:

Stage of Project Cycle Actual/Latest EstimateNo. Staff weeks US$ ('000)

Identification/Preparation 93.96 297.38Appraisal/Negotiation N/A N/ASupervision 58.40 177.50ICR 15.33 38.98Total 167.69 513.87

Note: The number of Staff Weeks for Identification and Preparation is only estimated since it is not provided by SAP. Figures for Identification/Preparation include Appraisal/Negotiations costs.

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(c) Travel and Consultants (Bank Budget):

Stage of Project Cycle Actual/Latest Estimate Travel

US$ ('000) Consultants/Other

US$ ('000) Total

US$ ('000) Identification/Preparation 93.99 111.96 205.94 Appraisal/Negotiation n/a n/a n/a Supervision 84.21 77.70 161.91 ICR 5.62 37.87 43.49 Total 183.82 227.52 411.35

Note: Figures for Identification/Preparation include Appraisal/Negotiation costs.

(d) Travel and Consultants (Trust Funds): PHRD TF025495

Stage of Project Cycle Actual/Latest Estimate Travel


US$ ('000) Total

US$ ('000) Identification/Preparation 10.95 13.09 24.03 Appraisal/Negotiation n/a n/a n/a Supervision 4.32 20.68 25.00 ICR 0.00 0.00 0.00 Total 15.26 33.77 49.03

Note: Figures for Identification/Preparation include Appraisal/Negotiation costs.

PHRD TF029530 Stage of Project Cycle Actual/Latest Estimate

Travel US$ ('000)

Consultants/Other US$ ('000)

Total US$ ('000)

Identification/Preparation 149.2 176.21 325.41 Appraisal/Negotiation n/a N/a n/a Supervision 7.22 5.29 12.51 ICR 0.00 0.00 0.00 Total 156.42 181.5 337.92

Note: Figures for Identification/Preparation include Appraisal/negotiation costs. (e) Total Costs: Bank Budget and Trust Funds

Stage of Project Cycle Actual/Latest Estimate Staff

US$ ('000) Travel


US$ ('000) Total

US$ ('000) Identification/Preparation 297.38 254.13 301.26 852.77 Appraisal/Negotiation n/a n/a n/a n/a Supervision 177.50 95.75 103.67 376.92 ICR 38.98 5.62 37.87 82.48 Total 513.87 355.50 442.80 1,312.17

Note: Figures for Identification/Preparation include Appraisal/negotiation costs.

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Annex 5. Ratings for Achievement of Objectives/Outputs of Components(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)

RatingMacro policies H SU M N NASector Policies H SU M N NAPhysical H SU M N NAFinancial H SU M N NAInstitutional Development H SU M N NAEnvironmental H SU M N NA

SocialPoverty Reduction H SU M N NAGender H SU M N NAOther (Please specify) H SU M N NA

Private sector development H SU M N NAPublic sector management H SU M N NAOther (Please specify) H SU M N NA

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Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating

Lending HS S U HUSupervision HS S U HUOverall HS S U HU

6.2 Borrower performance Rating

Preparation HS S U HUGovernment implementation performance HS S U HUImplementation agency performance HS S U HUOverall HS S U HU

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Annex 7. List of Supporting Documents

Giugale, M., Lafourcade O., and Nguyen, V. (Editors at the World Bank). 2001. Mexico: A Comprehensive Development Agenda for the New Era. Washington, DC

Cercone, J. January 2003. "Personal Interviews with IMSS Authorities at Central and Local Levels". Conducted in Mexico City, Veracruz and Tabasco.

Mexico - Health System Reform Sector Adjustment Loan:

The World Bank. 1998. Mexico - Health System Reform Project (IMSS). President’s Report No. P7223. Washington, DC.

The World Bank and Banco Nacional de Obras y Servicios Publicos, S.N.C. 1998. Loan Agreement for loan 4364 - Mexico - Health System Reform Project (IMSS) – Sector Adjustment Loan. Washington, DC.

The World Bank and Banco Nacional de Obras y Servicios Publicos, S.N.C. 2000. First Amendment to the Loan Agreement for loan 4364 - Mexico - Health System Reform Project (IMSS) – Sector Adjustment Loan. Washington, DC.

The World Bank and Banco Nacional de Obras y Servicios Publicos, S.N.C. 2002. Second Amendment to the Loan Agreement for loan 436 - Mexico - Health System Reform Project (IMSS) – Sector Adjustment Loan. Washington, DC.

The World Bank and the United Mexican States. 1998. Guarantee Agreement for Loan 4364-ME - Mexico - Health System Reform Project (IMSS) – Sector Adjustment Loan. Washington, DC.

The World Bank. 1996-2002. Project Mission Reports and Aide-Memoires for Mexico - Health System Reform Project (IMSS) – Sector Adjustment Loan. Washington, DC.

Instituto Mexicano del Seguro Social, Dirección de Prestaciones Médicas, Coordinación de Planeación y Desarrollo. 2002. Progress Report on the Health System Reform Sector Adjustment Loan Project (Proyecto de Ajuste Estructural para la Reforma del Sector Salud - IMSS). México, DF

The World Bank. 1996-2002. Other Project documents. Washington, DC.

Mexico - Health System Reform Technical Assistance Loan:

The World Bank. 1998. Mexico - Health System Reform Technical Assistance Loan Project. President’s Report No. P7223. Washington, DC.

The World Bank and Banco Nacional de Obras y Servicios Publicos, S.N.C. 1998. Legal Agreement for Loan 4367 - Mexico - Health System Reform Technical Assistance Loan Project. Washington, DC.

The World Bank and the United Mexican States. 1998. Guarantee Agreement for Loan 4367 - Mexico - Health System Reform Technical Assistance Loan Project. Washington, DC.

The World Bank. 1996-2002. Project Mission Reports and Aide-Memoires for Mexico - Health System Reform Technical Assistance Loan Project. Washington, DC.

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PHRD Grants TF025495 and TF029530: List of studies, terms of reference and activities financed by the Grants (1998-2001):

Technical Assistance

• Technical assistance provided in the preparation of studies and seminars related to Heath Sector Reform: (i) Analysis of the proposals presented by IMSS for the studies to be financed by the Grant; (ii) Supervision of the preparation of the studies to be financed by the Grant; (iii) Preparation of an action plan and budget for the seminars on Dissemination of the Health Reform to be financed by the Grant (Technical Assistance in the preparation of studies and seminars for the Grant activities related to the Reform of Health Systems.

• Technical Assistance provided to the Evaluation Committee of the technical proposals for the consultancy “Development and implementation of an information system for hospitals”

Studies

• Project Economic Evaluation• Study of Private Managed Care Market in Mexico• Diagnostic of the needs for training on management in the Social Security Institute of Mexico (IMSS)• Operational Manual for the Innovative Development Fund (IDF) to be implemented under the TA Loan.

• Operational Manual on Environmental Impact to support decisions on selection and purchase of medical equipment by the Medical Areas. • Design of a questionnaire to assess the quality of medical services delivered by IMSS in the Medical Areas.• Study on Labor Market in Mexico: Analysis of the labor and salary history of the workers affiliated to IMSS• Study on Financing of the Public Mexican Health Services

Preparation of Terms of Reference

• Preparation of ToRs (terms of reference) for the studies for the implementation of the "Investment Fund for the Development of the Integral Health Attention Model" (Fondo de Inversión para el Desarrollo del Modelo de Atención Integral a la Salud)• Preparation of ToRs for the study on Technological Evaluation in Mexico• Preparation of ToRs for the development for the classification of patients through the Diagnostic Related Group (DRGs) to be implemented in selected IMSS Hospitals. • Preparation of ToRs for the design and implementation of an improved information system for IMSS hospitals• Preparation of ToRs for the development and consolidation of the decentralized medical areas in the IMSS.• Preparation of ToRs for the diagnostic and implementation plan for an improved information system for IMSS hospitals• Preparation of ToRs for preparation of a proposal for IMSS Reform

Courses, workshops and study tours

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• Workshop on regulating and monitoring managed care to look at experiences from the US and Chile• Study Tour to UK to gain exposure to new experiences on hospitals system and in preparation towards the establishment of a twinning project between NHS (National Health Service of UK) and IMSS specialty hospitals (of Mexico)• Study Tour to Barcelona, Spain to gain exposure on hospital administration and attend a seminar on Health Sector Policy Reform in Latin American and the Caribbean Region• Courses and Seminars on Institutional Strengthening• Other courses related to health sector reform

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Additional Annex 8. Supporting Data and Tables

Health Reform in Mexico and Bank Support A new Approach to the ICR

In principle, an identification of the optimal combination of efforts that generate a desired outcome in a health reform process should result from lessons learned of Bank support to such processes in several countries. While this ICR is not an intensive learning ICR, this ICR is designed as a contribution to that exercise. A reform process is a combination of efforts over a period of time including those supported by Bank operations. Project financed activities evolve in an environment determined by factors such as the economic and fiscal situation of the country in question, the political leadership as well as the degree of community participation, the particular characteristics of the health sector, etc. This ICR has been designed with such holistic approach in mind, including stakeholder analysis and follow-up workshops, in order to analyze Bank support to the reform process within the particular characteristics of the sector at the time of project design and during its implementation. This analysis is necessary in order to identify the combination of efforts from the TAL that in conjunction with the policies supported by the SECAL produced the observed results in the health reform process in Mexico. Our aim is to try to establish a relationship between the successes and failures of the Mexican health reform process with the combination of activities supported by the TAL and their interaction with sector policies in the SECAL, both in the presence of events outside the scope of the operations but that influenced project design and implementation. The ICR preparation process involved the analysis of issues of diverse nature: from the timeliness of political decisions, to economic situations that enable or disable the implementation of strategies designed to be supported by technical assistance, to the overall political and social climate of the country and its institution(s). A detailed analysis of results obtained during the project’s life, compared to initial objectives and to project activities has been done, and then those are analyzed within the political and socio-economic context present during the whole project cycle. Interviews structured in modules were applied to a group of approximately 30 persons who have been involved in the health reform process in Mexico in different capacities and results are compiled and analyzed for the ICR analysis presented here.

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World Bank DocumentReport No: 26236 IMPLEMENTATION COMPLETION REPORT (SCL-43640) ON AN ADJUSTMENT...

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Transcript of World Bank DocumentReport No: 26236 IMPLEMENTATION COMPLETION REPORT (SCL-43640) ON AN ADJUSTMENT...