Page 1 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB2996 Project Name Health Sector Development Project II (HSDP II) Scale up Region Africa Sector Health (80%); Health financing (10%), Central Government Administration (10%) Project ID P105093 Borrower(s) United Republic of Tanzania Implementing Agency Ministry of Health Ministry of regional administration and local government Environment Category [ ] A [X] B [] C [ ] FI [ ] Safeguard Classification [ ] S 1 [X] S 2 [ ] S 3 [ ] S F [ ] Date PID Prepared March 15, 2007 Estimated Date of Appraisal Authorization N/A Estimated Date of Board Approval April 24, 2007 1. Key development issues and rationale for Bank involvement IDA is supporting the implementation of the Government of Tanzania 2000-2011 health program through the participation in the health Sector Wide Approach (SWAp) and the financing of a slice of the total health expenditures. IDA’s support over the period 2000-2011 is organized in 3 phases: - The first phase of the Health Sector Development Project was a US$22 million APL (HSDP, Credit 33800) implemented in 2000-2003. It aimed to accelerate the reforms and emphasize institutional capacity development , focusing on: (i) strengthening capacity (particularly at local levels) to manage and adapt to changing roles and responsibilities; (ii) developing and piloting systems to improve quality and delivery of services to improve health status; and (iii) improving resource mobilization and management. - The second phase of the Health Sector Development Project is a US$ 64 million APL (HSDP II, Credit 38410, Grant H0710) approved in 2003 and running through December 2007. HSDP II supports the implementation of the Second Health Sector Strategic Plan (HSSP) 2003-2008 1 . Its objectives are to expand the reforms and systems/capacity development for better management of resources and quality improvements, with a view to institutionalizing decentralized management of health, nutrition and population services at district level and below, and shifting from an input-orientation to output/outcome-based planning and performance management. - Originally, the third phase of the Health Sector Development Project was expected to 1 As of February 2007, the MOH is considering the extension of the HSSP for an additional year in order to meet the original objectives. Page 2 support the final phase of the g overnment’s program (2008-2011) with the objectives to institutionalize output-based management, and institute improved systems for high quality care . This third phase was expected to be supported by the Poverty Reduction Support Credit (PRSC) rather than a third APL . When the second phase of the Project was negotiated in November 2003, it was agreed that upon completion of HSDP II (December 2007) the Bank would shift the funds from direct sector support to general budget support (i.e., commit funds through the PRSC rather than through a specific health sector project). However, the conditions for the transition to the PRSC listed in the Development Financing Agreement 2 have not been fully met. For this reason, the GOT requested IDA to extend HSDP II for 2 additional years and to seek additional financing in order to (i) continue to support the implementation and objectives of the HSSP 2003-2008 through its conclusion; ii) extend the time required to meet the criteria for the transition to the PRSC and to better prepare for it; and (iii) smooth short term delay in anticipated external funds from the US Government for the malaria program. 2. Proposed objective(s) The proposed financing would provide support to the Government of Tanzania’s current Health Sector Strategic Plan (HSSP) for an additional two years. Specifically, it would (i) continue to finance this successful program through its completion with an extension of the second and final phase of the APL, delaying the planned transition to the PRSC, while also (ii) financing gaps in the overall HSSP related to a shortfall in anticipated parallel financing for malaria. The development objectives and expected outcomes of the additional credit are identical to the original development objectives. 3. Preliminary description The design and scope of the Additional Financing are identical to HDSP II, as the Financing will support the continuation of activities under HSDP II through the revised Closing Date of December 31, 2009. The Additional Financing will continue to employ the institutional and implementation arrangements adopted in HSDP II Sixty per cent of the Additional Financing (US$35 million) will disburse under Category I (Pooled Funds Expenditures financed under the Subprograms of HSSP) of the existing Development Financing Agreement (DFA). Through the pooled fund, IDA Additional financing will support activities for FY 07/08 and FY 08/09 at central, regional, district level and at secondary/tertiary hospitals level with a focus on health service delivery and quality: At District Level o Quality of health services will be addressed through integrating HIV/AIDS activities at all levels, improving service agreements (contracts) with non-governmental providers, employing incentives to increase staff motivation, increasing accountability by publishing annual district health budgets and performance data, using client satisfaction tools to assess quality of service delivery, developing in-service training plans, implementing the health care waste management plan, and ensuring that adequate technical and support capacity is available to councils. 2 i) increased allocation of funds by the Borrower to the health sector to accommodate the gradual shift of IDA financing for health from the Adaptable Program Lending instrument to the PRSC; ii) improved procurement performance by the Borrower in each fiscal year of project implementation as assessed by procurement audits; and iii) implementation of annual reviews of the Health Care Waste Management Plan. Page 3 o Necessary household and community-based actions will be addressed through scaling-up to nation-wide l evel and institutionalizing preventive actions such as ITN promotion (and subsidizing nets), Vitamin A supplementation, community-based growth promotion, promotion of exclusive breast-feeding and the seventeen community IMCI practices. o The financing gap in the health sector will be reduced through strengthening the management of user fees, community health funds, the drug revolving fund, and health insurance. o Equity of access to health services will be improved through addressing the exemption system for the poor and vulnerable; monitoring the impact of fees on the poor; and devising new resource allocation formulas for block grants to districts. At Secondary and Tertiary Hospital Level o Hospital management will be improved by developing a hospital manager cadre, mandating Hospital Strategic Plans and operational plans, establishing Hospital Boards, and strengthening hospital financial and management. o Quality will be improved through repairs to facilities and preventive maintenance; and enhanced performance audits including monitoring of service delivery outputs. o The impact of HIV/AIDS epidemic on hospital staff will be mitigated through human resource development strategies and integrating AIDS care at all levels. At the Regional Level o Quality will be improved through the provision of managerial and technical support to districts; strengthening the inspectorate function; performance audits, introducing a quality assurance program (including client satisfaction assessment); supporting districts in data collection, data management and decision-making; strengthening district capacity for supportive supervision; and intensifying inter district exchange of experiences. At the Central Ministries Level o Health financing will be improved through improved budgeting and advocating for increased government allocation for health; pooling external finances; improving contract management and enhancing community voice and ownership in cost sharing/CHF/insurance. o The Human Resource crisis will be addressed through long-term manpower planning; innovations to address distribution, motivation and retention of staff; and the more strategic use of Zonal Training Centers. o Quality will be improved through Medical and Clinical Audits; harmonizing technical management guidelines; standards for service agreement and contracting; accreditation of health institutions (public and private); consultations/collaboration with civil society; and the development of comprehensive integrated sustainable quality assurance schemes at health delivery points. o The consequences of HIV/AIDS on skilled human resources will be addressed through the integration HIV/AIDS into existing services; and the introduction and/or strengthening of PMTCT and HAART. o Monitoring and evaluation will be strengthened through investing in minimum information package at district and facility levels and assessing health sector performance based on PRS indicators and health sector performance profile indicators. Forty per cent of the Additional Financing (US$25 million for FY 07/08) will support malaria activities under Category II (Non-Pooled Expenditures financed under the Subprograms of HSSP) of the existing DFA. The additional financing will sustain i) the expansion of access to bednets through the widely recognized public-private partnership which provides vouchers for pregnant women and children and ii) catch up campaigns to ensure that nets are treated with insecticide. Although the malaria activities are eligible expenditures under the pooled fund, the disbursements against the malaria subprogram are proposed to be through Category 2 as after FY07/08 they would revert to being financed outside of the pooled fund due to the availability of earmarked malaria financing (the pooled fund does not allow earmarked funds). 4. Safeguard policies that might apply Page 4 No new construction nor acquisition of land is supported under the program. To mitigate potential harm caused by improper disposal of medical waste, the Health Care Waste Guidelines and the Management Plan adopted under HSDP II will continue to be followed. The Plan focuses on legislation and regulation; standardizing practices; collection, storage and disposal; capacity and management. Implementation of the Waste Management Plan does not involve any new construction or acquisition of land. Guidelines on incinerators and waste pits imply adaptations to or replacement of existing facilities that occupy existing sites on facility grounds. To mitigate potential harm caused by the use of insecticides for malaria prevention, the Insecticide Management Plan adopted by the National Malaria Control Program will be followed. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 IDA Credit 60 Total 60 6. Contact point Contact: Julie McLaughlin Title: Lead Health Specialist Tel: +255-22-2163200 Email: Jmclaughlin@worldbank.org