Report No. 24015
Report No: I074795 <--Please check for duplicates!
Integrated Safeguards Data Sheet (Updated)
Date ISDS Prepared/Updated: 04/12/2002
Section I - Basic Information
A. Basic Project Data
Country: MEXICO Project ID: P074795
Project: MX Technical Assistance for Public Sector Social Security Reform
(ISSSTE)        Task Team Leader: Daniel Dulitzky
Authorized to Appraise Date: May 4, 2002          IBRD Amount ($m): 8.65
Bank Approval: July 18, 2002     IDA Amount ($m):
Managing Unit: LCSHH Sector: HO - Hospitals; Secondary & Tertiary; HR -
Reform and Financing; SI - Pensions & Social Insurance
Lending Instrument: Technical Assistance Loan (TAL)       Status: Lending
I.A.2. Project Objectives:
The Technical Assistance Loan is closely related to a Programmatic
Sectoral Adjustment Loan (PSECAL) that is currently being prepared, and as
such shares the same main objectives. The purpose of the loan is to
assist the Mexican government and, in particular, the authorities of the
Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado
(ISSSTE) to proceed with the reform of its health and pension benefit
schemes.
The main objectives of this holistic reform are to improve the fiscal
efficiency of social security benefits, especially health and pensions,
for public employees and their dependents in Mexico; to enhance the
governance of public social security through the corporate restructuring
of ISSSTE; and to improve the quality of the services rendered to its
beneficiaries. A medium term goal of the reform is to integrate the
services provided by ISSSTE with those provided by other social security
institutions in Mexico, so that distortions to labor mobility are reduced
and economies of scale are acknowledged and exploited. At the end of the
reform process, ISSSTE will be self sustainable and fiscally sound, will
provide benefits in an equitable and efficient way to its 10.1 million
beneficiaries, and will have services integrated with those of other
social security institutions.
The reform will be comprehensive, affecting the two main areas where
ISSSTE provides services: health and pensions. This process will also
require a new institutional structure, making corporate restructuring a
third -and ubiquitous-- component of the project. The TAL will provide
funding to produce the studies and assure the technical assistance
necessary to carry out the reforms intended under the PSECAL.
The issues this project is dealing with are of such magnitude and
complexity that it is likely the reform process will extend well beyond
the life of the project. In this way, the TAL is a first step that will
allow the implementation of the first programmatic loan and set the stage
for a second loan. During this first stage, emphasis will be placed on



improving the organizational structure of ISSSTE, making the institution
more efficient and financially sound, and on identifying and evaluating
areas where complementarities and/or economies of scale with other social
security institutions exist. A second stage of reforms will proceed with
the integration of services.
I.A.3. Project Description:
The project will have six components.
COMPONENT 1
Technical support for the redesign of the corporate structure. Changing
the current corporate structure is at the center of the reform project as
the new pension and health care provision schemes will require a new
corporate structure with increased accountability, clear definition of
responsibilities and processes, and better monitoring of performance and
activities in the organization. This activity involves technical
assistance to support the corporate restructuting of ISSSTE, with emphasis
in the new business units, like the health services purchasing area, on
issues like: (i) allocation of competencies across the organizations; (ii)
design of operation manuals of the new organization; (iii) definition of
processes and procedures; and (iv) definition of functions and
responsibilities for each position;
COMPONENT 2
Development of information systems for the new pension benefit scheme.
The new pension system will be almost identical to the prevailing system
for workers in the private sector in Mexico. The current information
system will have to be upgraded to be able to provide information about
contributors and beneficiaries as required by the regulatory agency
CONSAR, as it is expected that ISSSTE will have to follow the same
regulations that are currently in place for the institutions that
administer pension benefits for workers in the private sector, the
AFOREs. This is independent of the decision that ISSSTE might take
regarding the way the individual accounts are administered, i.e. through
its own AFORE or through contracting out to existing or new privately
managed AFOREs.
COMPONENT 3
Technical assistance for the definition and implementation of a health
services purchasing area and identification of complementarities with
other health services providers. One of the core strategies for inducing
transformations in ISSSTE's health services is going to be the separation
of financing/purchasing from provision. The TAL will support a number of
activities to assist ISSSTE to implement this separation. In addition,
this component will also devote some funding to identify areas and
processes which could be merged with other public health service providers
in search for greater efficiency and synergism. This component will
finance four subcomponents:
1. Support for the design and implementation of a beneficiaries database
(including risk profile and the definition of updating mechanisms);
2. Support for conducting a market assessment and benchmarking of ISSSTE's
health services, and designing health benefits plans;
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3. Development of new resource allocation formulas (capitation and DRGs),
contracting and payment mechanisms with providers, and a transition plan
for implementation; and
4. Identifying strategic complementarities with other institutions in the
health sector. This includes support for conducting economic analysis
(and implementation plans, when feasible) of processes and activities that
could be integrated, including external contracting of services, opting
out (of beneficiaries), beneficiary databases, and other ancillary
services.
COMPONENT 4
Technical assistance to improve productivity of health services and
strengthen ISSSTE provider units. This includes
Technical support for the definition of a descentralization policy and for
the creation of descentralized medical area units (AMGD);
Technical support for the design of business plans in provider units and
the design and implementation of performance agreements with the ISSSTE
purchasing area;
Technical support for the implementation of hospitals case-mix
classification systems, and new costing and budgeting systems;
Implementation of an inventory of medical equipment and design of a
rational equipment replacement policy; and
Evaluation of the purchasing system for pharmaceutical and medical
supplies.
COMPONENT 5
Definition and implementation of a new model of family medicine, Nuevo
Modelo de Medicina Familiar Preventivo (MMFP). This involves the
following actions: defining norms, priority programs, protocols and
procedures, with an emphasis in preventive activities; design and
implementation of incentive mechanisms to improve performance; and
definition of monitoring and evaluation systems, including beneficiary
satisfaction surveys.
COMPONENT 6
Project management. A small proportion of the loan will be used to
provide technical assistance for the monitoring and evaluation of the
implementation of the project, and to guarantee proper coordination both
within ISSSTE and externally (with World Bank and other national agencies
and institutions).
Components:
1- Reform of the Corporate Structure in ISSSTE
2- Development of Information Systems for the New Pension Benefit Scheme
3- Definition and Implementation of a Health Services Purchasing Area and
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identification of complementarities with other health services providers
4- Technical Assistance to Improve Productivity of Health Services and
Strengthen ISSSTE's Provider Units
5- Definition and Implementation of the New Model of Family Medicine,
Nuevo Modelo de Medicina Familiar Preventivo (MMFP)
6- Project Management
I.A.4. Project Location: (Geographic location, information about the key
environmental and social characteristics of the area and population likely
to be affected, and proximity to any protected areas, or sites or critical
natural habitats, or any other culturally or socially sensitive areas.)
N/A
B. Check Environmental Classification: C (Not Required)
Comments:
C. Safeguard Policies Triggered
Policy Applicability
Environmental Assessment (OP/BP/GP 4.01)         No
Forestry (OP/GP 4.36)    No
Natural Habitats (OP/BP 4.04)    No
Safety of Dams (OP/BP 4.37)      No
Pest Management (OP 4.09)        No
Involuntary Resettlement (OP/BP 4.12)    No
Indigenous Peoples (OD 4.20)     No
Cultural Property (OP 4.11)      No
Projects in Disputed Territories (OP/BP/GP 7.60)*         No
Projects in International Waterways (OP/BP/GP 7.50)       No
*By supporting the proposed project, the Bank does not intend to prejudice
the final determination of the parties' claims on the disputed areas
Section II - Key Safeguard Issues and Their Management
D. Summary of Key Safeguard Issues. Please fill in all relevant questions.
If information is not available, describe steps to be taken to obtain
necessary data.
II.D.la. Describe any safeguard issues and impacts associated with the
proposed project. Identify and describe any potential large scale,
significant and/or irreversible impacts.
N/A
II.D.lb. Describe any potential cumulative impacts due to application of
more than one safeguard policy or due to multiple project component.
N/A
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II.D.lc Describe any potential long term impacts due to anticipated future
activities in the project area.
N/A
II.D.2. In light of 1, describe the proposed treatment of alternatives (if
required)
N/A
II.D.3. Describe arrangement for the borrower to address safeguard issues
N/A
N/A
II.D.4. Identify the key stakeholders and describe the mechanisms for
consultation and disclosure on safeguard policies, with an emphasis on
potentially affected people.
E. Safeguards Classification. Category is determined by the highest impact
in any policy. Or on basis of cumulative impacts from multiple safeguards.
Whenever an individual safeguard policy is triggered the provisions of
that policy apply.
I S1. - Significant, cumulative and/or irreversible impacts; or
significant technical and institutional risks in management of one or more
safeguard areas
I S2. - One or more safeguard policies are triggered, but effects are
limited in their impact and are technically and institutionally manageable
[XI S3. - No safeguard issues
I SF. - Financial intermediary projects, social development funds,
community driven development or similar projects which require a safeguard
framework or programmatic approach to address safeguard issues.
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F. Disclosure Requirements Environmental Assessment/Analysis/Management
Plan:   Expected         Actual
Date of receipt by the Bank      Not Applicable  Not Applicable
Date of "in-country" disclosure Not Applicable   Not Applicable
Date of submission to InfoShop   Not Applicable  Not Applicable
Date of distributing the Exec. Summary of the EA to the ED
(For category A projects)       Not Applicable   Not Applicable
Resettlement Action Plan/Framework:      Expected         Actual
Date of receipt by the Bank      Not Applicable  Not Applicable
Date of "in-country" disclosure Not Applicable   Not Applicable
Date of submission to InfoShop   Not Applicable  Not Applicable
Indigenous Peoples Development Plan/Framework:   Expected         Actual
Date of receipt by the Bank      Not Applicable  Not Applicable
Date of "in-country" disclosure Not Applicable   Not Applicable
Date of submission to InfoShop   Not Applicable  Not Applicable
Pest Management Plan:    Expected        Actual
Date of receipt by the Bank      Not Applicable  Not Applicable
Date of "in-country" disclosure Not Applicable   Not Applicable
Date of submission to InfoShop   Not Applicable  Not Applicable
Dam Safety Management Plan:      Expected        Actual
Date of receipt by the Bank      Not Applicable  Not Applicable
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Date of "in-country" disclosure Not Applicable Not Applicable
Date of submission to InfoShop Not Applicable Not Applicable
If in-country disclosure of any of the above documents is not expected,
please explain why.
Signed and submitted by          Name    Date
Task Team Leader:        Daniel Dulitzky
Project Safeguards Specialists 1:
Project Safeguards Specialists 2:
Project Safeguards Specialists 3:
Approved by:     Name    Date
Regional Safeguards Coordinator:         Juan David Quintero      3-21-02
Sector Manager/Director:         Evangeline Javier        4-12-02
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