Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 35390

IMPLEMENTATION COMPLETION REPORT(IDA-31490)

ON A

CREDIT

IN THE AMOUNT OF SDR97.9 MILLION

TO

INDIA

FOR THE

MAHARASHTRA HEALTH SYSTEMS DEVELOPMENT PROJECT

May 26, 2006

Human Development Sector UnitSouth Asia Region

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

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 15, 2006)

Currency Unit = Rupees Rs. 1.00 = US$ 0.02

US$ 1.0 = Rupees 45.07

FISCAL YEARApril 1 - March 31

ABBREVIATIONS AND ACRONYMS

ALOS Average Length of Stay MCCD Medical Certification of Cause of DeathBOR Bed Occupancy Rate MHSDP Maharashtra Health Systems Develop Project

CAS Country Assistance Strategy MTR Mid-Term ReviewCHC Community Health Center NGO Non-government organizationCTDF Common Treatment & Disposal Facility OPD Out-patient departmentDH District Hospital PAD Project Appraisal DocumentDHS Directorate of Health Services PGB Project Governing Board DMC District Management Committee PM Project ManagerDO Development Objective PMC Project Management CommitteeFMS Financial management system PIP Project Implementation PlanGOM Government of Maharashtra PSR Project Status ReportGOI Government of India RRI Rapid Results InitiativeGR Government Resolution QA Quality AssuranceGT Gokuldas Tejpal SC Scheduled CastesHCWMP Health Care Waste Management Plan SCD Survey of Cause of DeathHEMR Health Equipment Mgt. & Repair Unit SDH Sub-Divisional HospitalHMIS Health Management Information System SHSP State Health Systems ProjectsHVC Hospital Visiting Committee SPC Strategic Planning CellIDA International Development Association ST Scheduled TribesIDSP Integrated Disease Surveillance ProjectIEC Information, education and communicationKPI Key Performance Indicators

Vice President: Praful C. PatelCountry Director: Michael F. CarterSector Manager: Anabela Abreu

Task Team Leader/Task Manager: Jagmohan S. Kang

INDIAMAHARASHTRA HEALTH SYSTEM DEVELOPMENT PROJECT

CONTENTS

Page No.1. Project Data 12. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 24. Achievement of Objective and Outputs 45. Major Factors Affecting Implementation and Outcome 136. Sustainability 157. Bank and Borrower Performance 158. Lessons Learned 189. Partner Comments 2010. Additional Information 20Annex 1. Key Performance Indicators/Log Frame Matrix 21Annex 2. Project Costs and Financing 24Annex 3. Economic Costs and Benefits 27Annex 4. Bank Inputs 28Annex 5. Ratings for Achievement of Objectives/Outputs of Components 31Annex 6. Ratings of Bank and Borrower Performance 32Annex 7. List of Supporting Documents 33Annex 8. Borrower's Implementation Completion ReportAnnex 9. Additional Analysis of Health Sector Allocations

3550

Project ID: P050651 Project Name: MAHARASH HEALTH SYSTeam Leader: Jagmohan S. Kang TL Unit: SASHDICR Type: Core ICR Report Date: May 30, 2006

1. Project DataName: MAHARASH HEALTH SYS L/C/TF Number: IDA-31490

Country/Department: INDIA Region: South Asia Regional Office

Sector/subsector: Health (92%); Sub-national government administration (8%)Theme: Health system performance (P); Other communicable diseases (P); Indigenous peoples (S);

Gender (S)

KEY DATES Original Revised/ActualPCD: 02/24/1997 Effective: 02/24/1999

Appraisal: 10/26/1998 MTR: 06/30/2002 11/13/2002Approval: 12/08/1998 Closing: 03/31/2005 11/30/2005

Borrower/Implementing Agency: GOVERNMENT OF INDIA/GOVERNMENT OF MAHARASHTRAOther Partners:

STAFF Current At AppraisalVice President: Praful C. Patel Heinz VerginCountry Director: Michael F. Carter Edwin LimSector Manager: Anabela Abreu Richard L. SkolnikTeam Leader at ICR: Jagmohan S. Khan Tawhid NawazICR Primary Author: Shreelata Rao Seshadri

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: SU

Bank Performance: S

Borrower Performance: S

QAG (if available) ICRQuality at Entry: S S

Project at Risk at Any Time: YesThe ICR team has used the new six point rating scale and rated the outcome Moderately Satisfactory.

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

3.1 Original Objective:Maharashtra Health Systems Development Project (MHSDP) was the third State Health Systems project financed by the International Development Association (IDA), strengthening health systems at the secondary/first referral level of care. Its Development Objectives (DOs) were to assist the Government of Maharashtra (GOM) to: (i) improve efficiency in the allocation and use of health resources through policy and institutional development; and (ii) improve the performance of the health care system through systematic enhancements in the quality, effectiveness and coverage of health services at the first referral level and selective coverage at the community level. The DOs were justified based on the fiscal situation in the state and the priority needs of the health sector identified in the Project Appraisal Document (PAD). The state was facing a rising fiscal deficit, leading to reductions in allocations to the social sectors, including health. Within the health sector, resources were largely absorbed by salary and administrative costs. Further, allocations were skewed towards tertiary care relative to the needs of the primary and secondary levels. Through MHSDP, assurances were obtained from GOM that it would undertake reforms to increase financing and improve resource allocation for the health sector. Again, the Ninth Plan (1997-2002) as well as the Central Council of Health and Family Welfare had pointed to the need for strengthening capacity to provide curative care, along with the longstanding commitment to preventive and promotive care. Many states, including Maharashtra, were facing an epidemiological transition, and therefore a double disease burden with an unfinished agenda in communicable disease control and a rising challenge of non-communicable diseases. Strengthening the secondary or first referral care was necessary to meet this challenge.

The project was in line with the Country Assistance Strategy (CAS; Report No. 17241-IN; December 19, 1997) of supporting states that were undertaking economic restructuring programs, supporting sectoral policy reform, strengthening institutional capacity, upgrading quality and effectiveness of services and enhancing community participation in service delivery. The value-added of Bank support for this project was that it (i) reinforced the importance of the state as the unit of account for health programs, since under the Indian Constitution, health is a state subject; and (ii) provided an opportunity to focus on health financing and human resource issues. Finally, the required investment for enhancing service quality and coverage of the secondary level of care was of a scale that could only be provided by the Bank.

The project was complex, as it combined a large component focused on upgrading infrastructure with an ambitious package of policy reform. The Bank had previous experience with such projects, but none of them had been systematically evaluated at the time of preparation of MHSDP, to test which interventions were likely to be most effective. The issues that the project chose to address required a fundamental shift in the way the Health Department did business, towards quality and accountability.

A Quality Enhancement Review (QER) of all State Health Systems projects was undertaken on July 31, 2002. While concluding that “that there was no doubt that the projects had generally been prepared and implemented appropriately”, the QER pointed to problems inherent to all State Health Systems Projects and the MHSDP is no exception: (i) The DOs did not explicitly identify improvements in health status as a monitorable project outcome; (ii) The project did not focus sufficiently on the poor. The project was designed at a time when a strong pro-poor focus was not the norm, and did include activities targeted at improving access to health services amongst tribals; and (iii) Although the private sector played a dominant role in health care provision, the project did not seek to expand its partnership with the private sector beyond contracting for the “hotel” functions in hospitals. The notion of the public and private sectors working together to meet the health needs of the poor was not an important consideration.

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3.2 Revised Objective:Not Applicable.

3.3 Original Components:The project financed civil works, goods and equipment, consultants and services, and operations and maintenance costs, through the following three components:

Component I: Management Development and Institutional Strengthening (US$12.4 million; 9% of total cost): (a) improving the institutional framework for policy development; (b) strengthening the management and implementation capacity at the state, divisional, district and facility levels; and (c) developing surveillance capacity for major communicable diseases and strengthening health management information systems (HMIS).

Component II: Improving Service Quality and Effectiveness at 25 District Hospitals (DH), 23 100-bedded and 53 50-bedded Sub-Divisional Hospitals (SDH) (US$99.8 million; 74% of total cost): (a) renovating/extending DH and upgrading selected Community Health Centers (CHCs) to SDH and constructing training centers at 4 remaining DH; and (b) upgrading effectiveness of clinical, managerial and support services at all DH and SDH.

Component III: Improving Access and Innovative Schemes (US$21.8 million; 17% of total cost): (a) renovating/extending and upgrading clinical effectiveness at 35 CHCs and enhancing their outreach functions; (b) improving referral mechanisms between primary and tertiary levels and with private health care; (c) promoting health services in tribal areas and for disadvantaged groups; and (d) developing a super-specialty hospital as an innovative scheme for closer cooperation between the public and private sectors through the adoption of modern management practices.

Key policy reforms were agreed with GOM, as outlined in a formal Letter of Health Sector Development Policy furnished to the Bank at Negotiations; it included: (i) increasing financing and improving resource allocation for the health sector, including increased allocations to the health sector, increased allocations to the primary and secondary levels of care, provision of adequate resources for drugs and essential supplies, and raising supplementary funds through selective application of user charges; (ii) strengthening capacity for management, planning and coordination; (iii) enhancing the role of the private and voluntary sector; (iv) providing incentives for the workforce and resolving the skill-mix imbalance; and (v) redressing regional and other imbalances..

3.4 Revised Components:Component III (d) was to develop the Gokuldas Tejpal (GT) Hospital building, an incomplete structure in Mumbai City, as a super-specialty hospital in a joint venture between the government and a private partner. Despite some early progress, including completion of the necessary studies and policy decisions, implementation of this activity was delayed. At the mid-term review (MTR), a decision was taken to drop this activity and cancel the unused allocated funds. 3.4.1 Assessment: A large proportion of the project investment was directed at enhancing physical infrastructure at public secondary level facilities. The proportion allocated to achieving the first DO, improved efficiency in resource allocation and utilization within the health sector, was small; and not backed by well-defined activities for institutional and sectoral reform (including the private sector). Interventions aimed at addressing health needs of the poor, as presented in Component III, were also largely focused on upgrading infrastructure at public facilities located in tribal areas. However, although absorbing only a small proportion of project funds, activities to improve access to services and health outcomes for the poor were included in the design.

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3.5 Quality at Entry:Quality at Entry is rated Satisfactorythough, because of weaknesses in the monitoring framework, especially in the outcome indicators, this would be rated Moderately Satisfactory under a six point assessment rating. GOM finalized a Project Implementation Plan (PIP) covering the following issues:

Policy Reform: The overall financial status of the state was identified as a critical risk, with implications for overall allocations to the health sector. To address this risk, GOM undertook to implement policy reform in health sector financing and management. An analysis of state-level public expenditures and of health expenditure was undertaken for this purpose.

Institutional Strengthening: Critical institutional risks identified during preparation included inadequate flow of funds; procurement delays; and delays in recruitment of key staff, particularly for the Project Management Cell (PMC). Institutional arrangements were agreed with GOM to mitigate these risks:

• GOM provided assurances in the Development Credit Agreement to (i) constitute an empowered Steering Committee (SC) to facilitate routine implementation, including availability of funds; (ii) set up a smooth funds flow mechanism, and a computer-based financial management system (FMS) to enable the PMC to monitor sources and uses of funds;

• The procurement plan and schedule for civil works, goods and services for the first two years was prepared and cleared with the Bank; as well as bidding documents for prior review packages for the first year; and

• Government Resolutions (GRs) establishing the PMC, Strategic Planning Cell (SPC), Project Governing Board (PGB), SC and District Management Committees (DMCs) were issued prior to Negotiations. The Health Secretary was designated as the Project Manager (PM); and heads of the Health Systems, Communicable Diseases, and Finance and Accounts cells were also designated.

Technical Issues: A Social Assessment was completed, and its findings were used to develop the Tribal Strategy. A Disease Burden study was completed and based on its findings, GOM was able to define service norms, including equipment and staffing norms, for different levels of hospitals as well as training modules for different types of staff.. Based on the staffing norms, GOM developed a Manpower Plan, identifying the additional staff required under different categories. Site and equipment surveys were substantially completed for the civil works program; equipment lists and technical specifications were finalized as also an essential drugs list for all facilities. An Environmental Action Plan was prepared and cleared with the Bank; and a plan for the surveillance of major communicable diseases was developed.

The monitoring framework (see Annex 1) for the project, however, could have been designed to measure outcomes better. For example, measures for several indicators were phrased in an imprecise manner (“increased share”, “adequate expenditure”), and did not specify that figures reported should be (i) net of project inputs, and (ii) in real terms. This was also true of indicators to measure improved quality and effectiveness: the indicator on admissions due to high-risk pregnancies was inappropriate for a large proportion of project hospitals since these hospitals did not have the support services to conduct high-risk deliveries. Finally, measuring increased access for tribals was not possible since data on tribal status was not recorded; and no survey was planned to collect tribal utilization data.

4. Achievement of Objective and Outputs

4.1 Outcome/achievement of objective:Achievement of Development Objectives is rated Satisfactory. However, this achievement needs to be

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qualified; while the project succeeded in bringing about sustainable improvements in service delivery, it did not do well in systems development. Under a six point assessment rating, the achievement of DOs would be rated Moderately Satisfactory. The overall rating is based on progress on starred (*) key performance indicators (KPI) in Annex 1 of the Project Appraisal Document (PAD) (for additional analysis, see Annex 9).

DO 1: Improve efficiency in the allocation and use of health resources through policy and institutional development through:

(i) Increased share of resources for the primary and secondary levels of health care in the total resources (plan and non-plan) allocated to the health sector: Achievement is unsatisfactory. The share of primary and secondary care in health resources varied during the project. Allocations to the health sector (Plan and Non-Plan) increased from Rs. 12,966.1 million in 1999-00 to Rs. 20,138.7 million in 2005-06: this represents a 53% increase in real terms (table in Annex 1 presents figures in both nominal and real terms). Of this, the share of primary and secondary care rose marginally from 79.8% in 1999-00 to 81.3% in 2001-02; it then declined to 72.7% in 2005-06. However, if the share of primary and secondary levels of care is calculated net of MHSDP contribution in real terms, the picture is different. Funding provided through MHSDP contributed about 10% of primary and secondary resources on average, rising to a high of about 14% in 2003-04. If such funding were to be excluded from the total Health Budget and from the allocation to primary and secondary levels, the allocation to primary and secondary levels rose from about 79% in 1999-00 to 86.9%, 88.5%, 86.9% and 84.2% in the subsequent four years. It declined a little further to 80.3% in 2004-05 and was at 76.9% at the project end. This seems to indicate that MHSDP funds were additional, although there may have been some substitution for government funding towards the end. It also indicates that at the end of the project in 2004-05, the share of resources for the primary and secondary levels of care was less than in the beginning in 1999-00.

(ii) Maintaining adequate expenditures for drugs at least at the current estimated level of Rs. 8,800 per bed per year for drug: Achievement is unsatisfactory even though the drug budget appears to be in line with the KPI. The drug budget appears to be in line with the KPI. Drug expenditure per bed per year increased from Rs. 8,800 in 1999-00 to Rs. 9,445 in 2004-05, which represents a marginal decline of about 2% in real terms. This also covers the 3,175 new beds added under the project. MHSDP’s contribution to the drug budget at project hospitals increased gradually until in 2003-04, Rs. 8,810 per bed per year out of Rs. 9,300 was contributed by the project. This later tapered off, and in 2005-06, the project contributed about 8% of the total budget. This indicates that MHSDP funds substituted for state funds in the provision of drugs; however, the KPI specified only total expenditures on drugs, but not the source of funding. Increased availability of medicines is reflected in reduced out-of-pocket expenses for the purchase of medicines at project hospitals: Patient Satisfaction Surveys have found that average patient expenditure on medicine per illness episode reduced from Rs. 79.0 to Rs. 53.0 between 2003 and 2005. These surveys were conducted by the Gokhale Institute of Politics and Economics, Pune in 2003 and 2005.

Overall availability of funds for non-salary expenditures appears to have increased between 1999-00 and 2005-06. Due to compliance with the recommendations of the 5th Pay Commission in 1997, salaries as a proportion of the total budget had increased to 65.7% in 1999-00. Subsequently, with an increase in total allocations to the health sector, and no further increase in salaries, this proportion began to decline and amounted to 45.4% in 2005-06. The budget for contingencies, including maintenance of buildings and equipment and operation cost of vehicles (including ambulances), rose from 11.6% of the health budget in 1999 to a high of 15.8% in 2002; then it declined to 11.7% in 2006. In nominal terms, there was a 57% increase in the budget for contingencies over the project period.

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(iii) Implementation of a user charge policy in all project facilities: Achievement is satisfactory. Implementation of the user charge policy is in compliance with the project covenant. Retention of funds collected through user charges at the point of collection was instituted in September 1999, and rates for different procedures were revised in July 2001. Currently, all project and non-project secondary hospitals are collecting user charges. Collections increased dramatically from Rs. 14.9 million in 1999-00 to Rs. 281.9 million in 2004-05. DHs continue to collect the bulk of user fees; however, the share of Other Hospitals (OH), SDHs and CHCs has increased from 19% of the total in 1999-00 to 31% in 2004-05. This could imply that the spread of patients across different levels of hospitals has improved, increasing the appropriate utilization of lower level hospitals and reducing the pressure on DHs, an important project objective. Patients below the poverty line, the elderly and disabled have been exempted from user charges. Special counters have been set up at the Registration area of the hospitals for patients in these categories.

Data indicates that the user charges revenue has clearly increased non-salary recurrent expenditures (External Evaluation of hospital data; Tata Institute of Social Sciences; 2005). For example, prior to 2001, average monthly collections and expenditures at DHs amounted to about Rs. 1.12 million and Rs. 0.4 million respectively; with the rate increase in 2001, collections and expenditures rose to Rs. 3.19 million and Rs. 0.8 million respectively. The increased expenditures were applied towards maintenance and repair of buildings and equipment and transportation of poor patients.

The levying of user charges does not appear to have had a negative impact on use of services. The monthly use by paying patients increased from 0.17 million to 0.21 million (22.5% increase) after the rate increase in 2001; and monthly use by exempted patients increased from 33,377 to 47,570 (42.5% increase). In the case of tribals, the increase among paying patients was much greater (73.6%) than among exempted patients (11.8%). This could partly be due to poor health seeking behavior among the poorer and more marginalized tribal groups who would be eligible for exemption from user charges. The proportion of exempted patients availing of services increased at all types of facilities except SDH-100, and overall there was a small increase in use by exempted patients from 16% to 18%.

Overall, despite some positive results, the achievement of this DO is unsatisfactory as, by the end of the project, (i) the share of resources for the primary and secondary levels of health care in the total budget did not increase; and (ii) there was an actual decline, in real terms, in expenditure on drugs.

DO 2: Improve the performance of the health care system at the first referral level and selectively at the community level through:

(i) Increase in percentage of institutions staffed in accordance with agreed norms from 25 % at baseline; to 35 % at midterm; and 90% at end of project: Progress has been satisfactory. Service norms had been agreed for different levels of hospitals; and the skills required to deliver the specified services had been determined. Five essential skills were identified and these specialists had to be made available: surgeon, general physician, obstetrician/gynecologist, pediatrician and anesthetist. In addition, if over 75% of the required skills were provided at a facility, it was deemed that norms had been met. The PMC monitored the status of skill mix regularly; an inventory of available staff and vacancies was undertaken prior to the MTR to determine additional requirement to comply with the agreed skill mix. A GR establishing service norms was issued in December 2002 and monitoring and recruitment was decentralized to Regional Deputy Directors, who were authorized to contract doctors for one year to fill vacancies. In addition, in-service training in critical skills such as anesthesia and pediatrics was undertaken in collaboration with the Department of Medical Education. Several additional strategies were also adopted

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to ensure appropriate skill mix at project facilities, including: (i) counseling of new recruits; (ii) decentralized recruitment by DMCs; (iii) making specialists from the DH available on a fixed day to SDHs within their district; and(iv) providing honoraria for hiring private doctors, particularly dentists and psychiatrists. As a result, 42% of facilities were staffed according to norms at the MTR, and 85% at the project end against a target of 90%. There appears to be an overall equitable distribution of institutions staffed according to norms among tribal and non-tribal populations, with staffing in tribal areas being marginally lower. However, maintaining the skill mix after project closing will continue to be a challenge and will require close monitoring.

(ii) Increase in number of admissions to institutions under the project due to high-risk pregnancies by 5% points at midterm and 15% points at end of project: Achievement of this KPI is mixed. The project end target of 15% of all admissions due to pregnancy related complications has been achieved only at DH and OH; other categories of hospitals have lagged behind for several reasons: (i) the service norms at SDH-50 and CHC did not provide for delivery of high-risk pregnancies, and necessary facilities such as blood banks were not available. Setting a target for these hospitals was therefore inappropriate; (ii) many of the cases from the SDH and CHC level were referred to higher-level facilities. Routine monitoring data indicates that about 20% of all cases referred to the DH were obstetric/gynecological cases. Part of the reason for this was the delay in re-commissioning facilities and in positioning the appropriate specialists, as a result of which the credibility of the lower level facilities was compromised, and referral to the district level continued to be high.

Admissions due to pregnancy related complications increased substantially in aggregate, from 20,287 across all hospitals in 1999 to 33,981 in 2004 (a 70% increase); and all categories of hospital have reported large increases over the baseline.

In 2004, 33,981 of 118,066 deliveries at project hospitals were of high-risk pregnancies – about 30%. It is estimated that about 15% of all pregnancies are high risk; hence, a disproportionate number of women with high-risk pregnancies appear to be delivering at project hospitals. Overall, about 300,000 high-risk pregnancies could be expected in Maharashtra in 2004. Of these, about 10% were admitted at project hospitals (33,981). In addition, the increase over the project period in the number of high-risk pregnancies admitted to project hospitals has been much greater than that in total deliveries: 296% versus 138%.

(iii) Increase in total outpatient department (OPD) attendance and increase in the proportion in the total outpatient attendance of women and Scheduled Tribes (ST) from 30% and 10% at baseline, to 35% and 12 % at midterm and 50% and 15% at end of project: Progress on this KPI is satisfactory. Total OPD attendance increased substantially despite disruption of services at all hospitals for various periods due to on-going construction and renovation. Total attendance increased from 5.13 million in 1999 to 8.43 million in 2005 – a 64% increase. This means an increase in project hospitals from 5.2 OPD visits per 100 persons in 1999 to about 8 OPD visits per 100 persons in 2005; available data indicates that in the US, 30.4 OPD visits occurred per 100 persons in 2000, but this included all facilities conducting OPD (Ly N, McCaig LF. National Hospital Ambulatory Medical Care Survey: 2000 Outpatient Department Summary. Adv Data.2002, June 4).

Women already constituted about 50% of all outpatients at the baseline, which was the goal for the end of the project. This has declined marginally to about 49%, except at OH, where women constituted 58% of the OPD. Tribals constitute about 9% of the total population of the state. According to hospital activity information, OPD attendance of tribals has risen from 1.7% at baseline to 4.9% by December 2003, but these figures should be interpreted with caution due to difficulty in elicitation of caste, misclassification of tribes and upward social mobility resulting in change of status. Since tribal populations are clustered in 5

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districts of Thane, Nashik, Nandurbar, Amravati and Gadchiroli, an analysis was attempted of OPD attendance in project hospitals located in the tribal areas. The data indicates that, overall, there has been a 24% increase in OPD attendance at these facilities, with greater increases registered at SDH and CHC, due to their location closer to tribal habitations. This increased OPD includes utilization by non-tribals living in the area as well, and is a positive outcome, since these areas are geographically difficult and remote, inhibiting health-seeking behavior. Of the increased OPD, about 18% is of tribal populations, which is greater than the end of project goal of 15%. While utilization of services by women/ST has been used as a proxy for utilization of services by the poor, it is unfortunate that neither the indicator nor the monitoring mechanism attempted to directly measure utilization by the poor. A special community-based survey could have been planned for this purpose.

The achievement of this DO is satisfactory as (i) the percentage of institutions staffed as per the agreed norms increased from 25% to 90%; (ii) the number of admissions to institutions due to high risk pregnancies increased by 15 percentage points; and (iii) attendance at outpatient department increased, and the proportion of such attendance by women and scheduled tribes increased from 30% and 10% to 50% and 15% respectively.

4.2 Outputs by components:Overall implementation progress (IP) is rated Satisfactory. The most recent IP rating (Implementation Status and Results; Archived January 24, 2006) upgraded the “moderately satisfactory” rating of the previous mission, since project management was able to satisfactorily address the main issues: completion of civil works and procurement, and installation and re-commissioning of equipment procured under the project. Additional claims have been submitted and processed, improving the disbursement profile.

Component I: Management Development and Institutional Strengthening: Overall implementation of this component was Satisfactory. Progress on specific sub-components is as follows:

(a) Improving the institutional framework for policy development: Effective management of resources in the health sector was identified as a critical risk, and MHSDP was to set up a Strategic Planning Cell (SPC) to address this risk, tasked with undertaking studies and analyses necessary to develop and assess health policies and programs in Maharashtra. The project did not set up such a cell. Instead, the functions of the SPC were carried out by the PMC under the direction of the PM. Institutions were contracted, both within and outside the state, to conduct 19 studies and evaluations on various aspects of the project; the findings were analyzed and disseminated at 115 workshops and meetings; and appropriate action was taken based on the recommendations. However, several of these studies focused on operational issues, and did not focus on the objective of the SPC – to provide strategic guidance to the future development of the health sector in Maharashtra. For example, the studies could have been a means to better understanding and coordinating with the private sector in areas such as regulation and accreditation, or to better targeting services to the poor. By the end of the project, there was no particular improvement in the institutional framework for policy development. A list of studies managed by the PMC is in Annex 7.

(b) Strengthening the management and implementation capacity at the state, divisional, district and facility levels: Several of the interventions were intended specifically to improve project implementation. At the state level, a PGB and SC were set up to provide autonomy in decision-making as well as for better flow of funds for project activities. The PMC was set up with the intention that it would implement all aspects of the project, in close consultation with the Directorate of Health Services (DHS). At the MTR, many of the functions of the PMC were transferred to the DHS to strengthen this collaboration; and the DHS took over management of several project components. Drug purchase was centralized, and a system of indenting for required drugs at the facility level was instituted; this streamlined the procurement of drugs

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and consumables, and made the system more transparent. At the regional level, Engineering Wings were set up to facilitate the implementation of civil works; and Health Equipment Maintenance and Repair (HEMR) workshops were set up to assist with the timely installation and commissioning of equipment provided under the project. At the district level, District Management Committees (DMC) were formed under the chairmanship of the District Collector, and were given primary responsibility for tracking and filling vacancies of key staff, and addressing issues of skill mix. At each facility, a Hospital Visiting Committee (HVC) was formed to monitor quality of care and provider behavior. The computerized financial management system (FMS) has been made operational, and the Bank has recommended that it could be utilized in other government departments as well. Several of these initiatives will be maintained after project closing, including the HEMR workshops, the DMCs and HVCs.

(c) Developing surveillance capacity for major communicable diseases and strengthening HMIS: With the delay in preparation of the IDA-funded Integrated Disease Surveillance Program (IDSP), the disease surveillance component of the project was substantially expanded following the MTR. Standard reporting formats were developed, and the DHS is regularly receiving information based on these formats from all districts. Feedback arrangements and training modules were developed, and are compatible with the National Surveillance Program for Communicable Diseases. The project developed a Geographic Information System to map important health and demographic data, as well as disease patterns. District Disease Surveillance Teams and Rapid Response Units were established and trained. With the implementation of IDSP, continued support for the disease surveillance program is assured. In addition, the project provided support to the State Bureau of Health Intelligence and Vital Statistics to improve the quality of the Medical Certification of Cause of Death (MCCD) and Survey of Cause of Death (SCD). Training modules were prepared for both, and training of relevant personnel is almost complete.

Progress with the HMIS was exemplary. All 143 project facilities were using the HMIS by the MTR. A total of 174 data elements are being monitored at DHs, and 61 data elements at all other hospitals. Several rounds of external validation were conducted of the data, and statistical officers of MHSDP were trained in validation techniques. The data is analyzed by the PMC and feedback provided regularly to all hospitals. The data is used for: (i) grading of hospitals, and recognition of consistently high performers; (ii) performance-linked budgeting; (iii) identifying the top five issues for immediate action at each hospital; and (iv) identifying issues for further research and study. For example, the data showed that the earmarked Ear, Nose and Throat (ENT) department beds were largely under-utilized; they were reallocated as ophthalmic beds, for which there was a greater demand due to the National Cataract Blindness Control Program. A web-based system has now been implemented, and the updating and maintenance of the HMIS has been transferred to the DHS. Non-project hospitals have also been included in the HMIS.

Component II: Improving Service Quality and Effectiveness at District and Sub-Divisional Hospitals: Progress on this component was Satisfactory. The rating is based on the following achievements:

(a) Renovating/extending DHs and upgrading selected CHCs to sub-divisional hospitals and constructing training centers at 4 remaining DHs: An ambitious civil works program was undertaken by the project; and the project has renovated/upgraded a large number of facilities including all 21 DH, 7 OH, 24 SDH – 100 bedded, and 52 SDHs – 50 bedded. In addition, the project has constructed an office complex in Mumbai – the Arogya Bhavan, an Information, Education and Communication (IEC) Bureau in Pune, 6 HEMR workshops, 1 state level and 16 district level Public Health Laboratories, 4 Blood Bank buildings, 12 Hospital Training Centers, 366 deep burial pits at project and non-project facilities, 33 dharmashalas (guest houses), and 30 Trauma Care centers. A total of 3,175 new beds were created. Detailed preparatory activities were undertaken, such as facility surveys to determine the status of existing buildings; assessment of availability of additional space for expansion based on space norms for different

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hospitals; selection of appropriate alternative sites, if the old site was insufficient; preparing architectural designs, to be cleared by the Bank architect; and obtaining requisite clearances. Partly due to this, substantial delay was experienced in getting the civil works grounded; this resulted in large lags in disbursement, and only 30% of the works were completed by the MTR. Such delays had an impact on many other components: for example, procurement of equipment was delayed since it was dovetailed with completion of civil works. This resulted in delays in re-commissioning the facilities, and disruption in services. Subsequently, with stringent monitoring from both the PMC and the Bank, all works, including the Arogya Bhavan, were completed. (b) Upgrading effectiveness of clinical, managerial and support services at all district and sub-divisional hospitals: Service norms were determined in consultation with appropriate stakeholders for each level of facility during project preparation; and equipment norms, skill mix and staffing norms, and training needs were finalized based on this. An equipment survey was undertaken to ascertain the facility specific equipment requirement. A one-time repair program for existing equipment was undertaken, whereby 1,800 pieces of equipment worth Rs. 160 million were repaired and re-commissioned for a cost of Rs. 14.8 million. The project procured new equipment of the value of Rs. 1,399.4 million, including furniture, major and minor medical equipment, surgical equipment, vehicles, medicines and supplies. A long-term strategy for repairing and maintaining existing and new equipment was implemented: (i) 8 regional HEMR workshops were established, with a full complement of bio-medical engineers, technicians and support staff. A building was provided for these workshops, as well as tools, equipment and necessary machinery. The PMC also prepared an “Operations Manual” with descriptions of the services to be provided, job descriptions of staff, and reporting systems. A GR was passed in May 2004, sanctioning the posts in the workshops, indicating the government’s commitment to maintain these workshops after project closing; and (ii) annual maintenance contracts were purchased for high value equipment, to be renewed as required.

The project also enhanced service quality through clinical and management training of all personnel. A Training Plan was prepared based on a training needs analysis. Training curricula and manuals for a range of specializations were developed. A total of 10,151 personnel received management training; 8,792 received clinical training; 42,738 received subject-related training; 4,979 in Quality Assurance; and 11,425 in health care waste management. The number trained at a particular facility is a function of the size of the hospital and associated numbers of staff; hence DHs have the largest numbers trained. A total of 63 international fellowships were also awarded. Two external evaluations were conducted of the training: one of the management training module, and the other of the nursing training. The recommendations of the evaluations were incorporated into subsequent training programs. Hospital Training Teams have been established and the project has constructed several Training Centers. The DHS needs to develop an annual training program to fully utilize the training capacity of these centers.

A comprehensive Quality Assurance (QA) program was implemented , including: (i) collection of reliable HMIS data; (ii) annual rounds of Patient and Staff Satisfaction Surveys; (iii) development of clinical quality indicators, protocols and monitoring formats; (iv) institution of prescription and medical audit; and (v) hospital inspections through a panel of experts. All project hospitals were conducting medical audits by the end of the project; and all project hospitals passed inspection by a panel of experts. These tools helped to instill a culture of concern for quality service delivery.

Overall, the benefit of these inputs – improved skill mix, equipment, training and QA – is reflected in improved quality and effectiveness of services (See Annex 8 for detailed analysis of quality and effectiveness indicators). There has been a substantial increase in investigations overall: laboratory investigations and X-rays had increased by 39% and 9% over the baseline respectively at the mid-term and

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by 68% and 48% respectively by the end of the project – this far exceeds the KPI on laboratory investigations. The number of major surgeries conducted at project facilities increased from 66,894 in 1999 to 197,081 in 2005 – a three-fold increase. The increase has been consistent across all levels of hospitals; and is an indication of the increased access to such specialist services even at lower level facilities. Bed occupancy rates have increased from an average of 51% at baseline to about 77% at the end of project. Occupancy varies between levels of facilities due to: (i) increase in number of beds, particularly at SDH-100 and SDH-50; and (ii) variable case mix, with lower level hospitals having a greater number of same day or short stay patients. Average length of stay (ALOS) has declined from 12 days at baseline to 3.46 days at the end of the project – this compares well with experience in Israel and elsewhere, with ALOS of about 4.5 days (Benbassat J, Haklai Z, Glick S, Friedman N. Determinants of hospital utilization: the situation in Israel and selected countries. Isr Med Assoc J. 2000 Nov; 2(11):833-7).

However, there are variations in performance between different levels of facilities: the quarterly grading undertaken of all project hospitals based on a core set of indicators shows that DHs are the best performers, with over 50% in the A grade, and the rest in B grade. OH and SDH-100 follow, with about two thirds of those facilities functioning in the A and B grades. The SDH-50 fared the worst with less than 40% of the facilities functioning at acceptable levels. The PMC has been actively monitoring these indicators, and trying to address the issues underlying poor performance; it will now be critical for the DHS to continue this practice to ensure good utilization of project investments. A comparison on selected variables between project and non-project sites was attempted at project end; a baseline should have been established for this, and a more systematic evaluation conducted to better understand the impact of project inputs.

Finally, in compliance with the Bio-Medical Waste Handling and Management Rule (1998), the project implemented a Health Care Waste Management Plan (HCWMP). Working in collaboration with the Maharashtra Pollution Control Board, a plan was developed for segregation and containment of waste at the facility level. This included construction of deep burial pits at hospitals located in townships with population of less than 500,000, and setting up contracts with Common Treatment and Disposal Facility (CTDF) in townships with population greater than 500,000. Supplies of waste bins, puncture proof containers, plastic bags, pneumatic hand spray, electric needle and syringe destroyers and protective attire for waste handlers were provided by the project. 284 project sites (72%) and 62% of all hospitals under the DHS (project and non-project) had introduced HCWMP practices by project closing, which is above the KPI target. Apart from this, autoclave with shredder was supplied at 17 DH and 24 SDH-100. The implementation of the HCWMP leaves much room for improvement, and needs to be monitored closely by the DHS since to be effective, it involves behavior change of all levels of staff.

Component III: Improving Access and Innovative Schemes: Progress on this component is Satisfactory. The rating is based on the following:

(a) Renovating/extending and upgrading clinical effectiveness at 35 CHCs and enhancing their outreach functions: All CHCs were completed; and software inputs were provided to enhance quality and effectiveness of services. The performance grading indicated that about 15% of all facilities were in grade A, and a third of them were in grade B: that is, about half of the CHCs were functioning at an acceptable level. (b) Improving referral mechanisms between primary and tertiary levels and with private health care: The project was only modestly successful in implementing a referral mechanism between different levels of hospitals, a key element of enhancing the cost-effectiveness of service delivery. The project introduced referral protocols and feedback cards, referral guidelines, incentives for referred patients, transportation

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when required, and training for medical officers in appropriate referral. Logistical support in the form of referral registers, chits and reporting formats were also provided. The mechanism was first piloted in 2 districts, and based on lessons learned it was scaled up to all districts. The largest proportion of referrals was to the DH, due to the availability of a range of specialist services. Out-patients referred in to the DH increased from 0.5% of total out-patients in 2002-03 to about 1.2% in 2003-04 and thereafter. Referrals were from all levels of hospitals, including Primary Health Centers, and also included sizeable numbers of referrals from the private sector. More cases are referred out of the DH to specialty hospitals or teaching hospitals, although this is declining. Referrals to private hospitals have declined from 18% in 2002-03 to 5% in 2003-04. About 25% of all referrals were transported in government vehicles, and about 70% of those referred were women and children.

(c) Promoting health services in tribal areas and for disadvantaged groups: Several schemes were piloted to test service delivery mechanisms in tribal areas; however, poorly designed monitoring strategies did not allow any useful lessons to be drawn from them. Thus an important opportunity for better understanding the challenges of increasing access to services in remote areas was lost. There were several interventions. (i) Health check-ups were organized at tribal sub-centers, and about 1.5 million tribals availed of diagnostic and curative services at these camps. Government functionaries organized 9,043 camps and non-government organizations (NGOs) 121 camps. 75% of those who attended were women and children, and 1.8% were referred to project hospitals for further investigation. While no rigorous evaluation was conducted of the impact of such camps on health outcomes of tribals, it is likely to have been small since only one camp was held annually at each sub-center. (ii) An Action Research Project was initiated at Dhadgaon in District Nandurbar to reduce neonatal mortality. However, impact evaluation was not possible since baseline data was not comparable to end-line data. (iii) To reduce the mental distance between health care providers and tribal populations, all health personnel in the five tribal districts were trained in tribal culture and language. The impact of this effort was also not evaluated. (iv) Traditional medical practitioners were provided training in primary care, since they are the first source of health care for most tribals. Training was provided in the management of diarrhea, immunization and referral of critical cases. No evaluation was conducted; however, experience in Orissa indicates that this could be effective in providing basic curative care in remote areas. In addition, the project implemented the following: (i) Due to a nutritional crisis in tribal districts, District Nandurbar was chosen as a pilot district for the Rapid Results Initiative (RRI). Choosing reduction in childhood malnutrition as the area of focus, block-level teams implemented an intensive strategy for 100 days. This exercise was largely successful in achieving the limited objectives of the RRI; however, to sustain that level of activity, or to obtain the resources necessary to scale it up to other tribal districts, is going to be difficult; and (ii) In 2002, GOM took a policy decision to provide monetary incentives to staff in tribal areas, including higher non-practicing allowance and pay scale. It is the perception of field staff that this has improved the availability of doctors in tribal facilities.

Utilization of services in tribal areas improved significantly as a result of improved physical amenities, and increased provision of equipment and trained staff: in-patient admissions increased by almost 75%, with the greatest increases in SDH-100 and SDH-50, indicating that the project strategy of strengthening facilities geographically closer to the communities they serve was an effective one. Major surgeries increased by 92% overall, and by 182% at SDH-100, and utilization of maternity services increased by 54%. However, available data does not allow an assessment of whether (i) such services were utilized largely by the poor, although tribal populations in these areas are typically poor; and (ii) there was a net increase in service utilization by tribals, since they may have previously been availing services in the private sector.

An IEC strategy was to be implemented to increase awareness of, demand for and satisfaction with services at project facilities and to improve provider behavior. The KPI on increased awareness was not met with

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the end-line Patient Satisfaction Survey indicating only 25% of women and 15% of STs being aware of services offered at DH and SDH. This is well below the target of 60% awareness at project closing. Also, while evaluating user fees it was found that 65% of the users and 36% of the households in tribal areas were unaware that certain services are available free of charge at government facilities (TISS, 2005). This is largely because a broad-based public campaign was never implemented. A decision was made at the MTR that the IEC Bureau in Pune would take primary responsibility for IEC activities under the project. The Bureau functions as a design and production unit for IEC campaigns of all health programs in the state. However, it was not the appropriate body for developing the project’s IEC strategy. The Bank did makde suggestions on developing a Departmental identity and enhancing signage at project facilities but these were not taken forward. The centerpiece of the IEC component was the “Sevabhav” and “Seva Sankalp” training aimed at improving provider behavior; this was piloted first in District Ahmednagar, and later extended to 17 additional districts. While the initial impact has been positive, there needs to be regular reinforcement through monitoring and re-training to ensure that the benefits are sustained.

(d) Developing a super-specialty hospital as an innovative scheme for closer cooperation between the public and private sectors through the adoption of modern management practices: Preparatory activities towards developing the GT Super Specialty hospital in Mumbai into a public-private partnership were completed early in the project, albeit with some delays, leading to non-compliance with legal covenants. The building was handed over to the Department of Medical Education in May 2000, with the understanding that an agreement would shortly be signed with an appropriate private partner. Despite approval of the Joint Venture Corporation set up with M/s Wockhardt Life Sciences Ltd. by GOM’s Revenue, Law and Judiciary departments in November 2001, the Bank was informed in June 2002 that GOM was considering re-opening negotiations with the private partner. The Department of Economic Affairs also followed up with the Bank and GOM, since they were interested in the outcome of this innovative proposal. However, no further progress had taken place by the MTR in November 2002, and the decision was taken by the Bank to cancel this component.

4.3 Net Present Value/Economic rate of return:Not Applicable.

4.4 Financial rate of return:Not Applicable.

4.5 Institutional development impact:The institutional development impact of the project was Substantial. There were two important institutional development interventions. The first was the decentralized drug purchase mechanism, which has now been institutionalized. This resulted in greater transparency in procurement and a more cost efficient system, capable of procuring large volumes of drugs in a timely manner. The second intervention was the HMIS which regularly provided monitoring data that was effectively used to manage hospital performance. HMIS data was used to grade hospitals and conduct comparative analysis of performance to identify and correct problems on time. In addition, the disease surveillance system was streamlined, and a health care waste management system was introduced in compliance with the Supreme Court ruling on waste management at health care facilities.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outside the control of government or implementing agency:The deluge of June 2005: The project was able to obtain three additional months – from August 31, 2005 to November 31, 2005 – due to severe rainfall across the state in June/July 2005. With the fear of epidemics looming large, all personnel were diverted to containing the situation. As a result there was

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disruption in project activities; however, the additional three months helped to get it back on track.

Tsunami relief: While requesting the initial extension to the project closing date, DEA also requested a re-allocation of about US$12 million towards Tsunami relief efforts. This reduced the total amount available to the project. This did not impact project activities significantly; however, it did ensure that the remaining amount was fully disbursed at closing.

Lack of availability of specific skills: Despite GOM’s best efforts, it was not possible to fulfill the staffing norms particularly in the case of anesthetists, gynecologists and pediatricians, due to an absolute shortage of personnel with these skills in the state. Even the option of contracting in these services from the private sector for a fee was not successful for this reason.

5.2 Factors generally subject to government control:Political commitment: GOM had been very committed to the project during the preparation phase, and compared to several other states that were simultaneously preparing State Health Systems Projects (SHSPs), Maharashtra performed better. Despite elections being held early in the project, and subsequent change in government, GOM was proactive in implementing several policy measures, particularly user charges. However, there were several instances when political commitment was wanting, leading to delays in obtaining necessary clearances and guidance, as in the case of the GT Hospital proposal or management problems between DHS and the PMC.

Overall fiscal situation of the state: The project suffered constant under-funding due to the overall fiscal situation in the state.

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5.3 Factors generally subject to implementing agency control:Utilizing existing capacity: The DHS and PMC were able to utilize existing capacity to their advantage, particularly in the case of the disease surveillance program. The state and district level units were strengthened under the project, and this activity was one of the successes of the project. A similar effort with respect to the IEC component was not so successful, however.

Implementing the civil works program: Delays in grounding and completing the civil works resulted mainly from lack of capacity in the PMC to execute such an ambitious program. The necessary additional staff was not recruited for more than a year after the project became effective. There were delays in choosing sites for new construction as also in obtaining the clearances required for the Arogya Bhavan.

Procurement: Although the procurement function was taken on by an external agency, procurement was delayed substantially. The reason given was that procurement of equipment was to be dovetailed with completion of civil works. However, finally, procurement was so delayed that it would not have been completed if the project had not been extended, and re-commissioning of hospitals became a problem.

5.4 Costs and financing:The original Credit Amount was SDR97.9 (US$134 million). There were subsequently two rounds of cancellations: (i) during the MTR, US$9.1 million for the GT Super Specialty Hospital project was cancelled and US$8 million was cancelled from Category IV (Operations and Maintenance Costs); and (ii) while requesting an Extension of the Closing Date, the Department of Economic Affairs (DEA) also requested a re-allocation of SDR11.938 million towards the India Tsunami Rehabilitation Project. The funds available to the project finally amounted to SDR73.76 million (US$109.85 million equivalent). Disbursements were consistently low throughout the project period; and stood at just 60% at the end of six years of implementation, despite the cancellations. However, with activities coming to completion during

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the 9-month Extension period, particularly the civil works and equipment procurement programs that represented a large proportion of the Credit, at the project closing, the revised allocation of SDR73.76 million was fully disbursed.

6. Sustainability

6.1 Rationale for sustainability rating:Project sustainability is rated as Likely. The government’s commitment to sustaining project benefits is reflected in the following:

Financial sustainability. As noted earlier, allocations to the health sector have increased over the project period (page 8). The share of salaries in the budget dropped from about 60% in the 1990s and has remained constant at about 45% during the project period, implying that allocations to drugs, operations and maintenance have been protected. Revenue collected from user fees has increased, thereby increasing availability of funds for non-salary recurrent costs at the facility level. It was estimated by the Bank team that about Rs. 350 million would be required to continue project activities, including the services of additional staff for posts created under the project, maintenance of facilities and equipment, HMIS and health care waste management system. GOM has approved the request for additional funding. The public expenditure review undertaken during project preparation concluded that project related incremental expenditure would not constitute a significant burden to the state’s health budget, based on past rates of growth (Project Appraisal Document, Annex 5). Given the trends in health financing in Maharashtra, it appears that financial sustainability would not be a problem.

Institutional sustainability. More than 75% of project costs went towards upgrading physical infrastructure such as buildings and equipment, which will be long-term assets to the health sector. The rationalization of service delivery through the creation of a standardized and multi-tiered secondary level of care, with associated service norms, will be maintained. Several decisions have been taken to ensure continuity of policy reforms undertaken under the project: (i) the largest increase has been in allocations to grants-in-aid (GIA), from 0.95% of the health budget in FY00 to 23.9% in FY06; since GIA is applied towards contracting private providers for the delivery of selected services, this reflects the government’s increasing commitment to partnering with the private sector, including NGOs; (ii) the centralized drug purchase system established by the project will be maintained; (iii) contracting out of non-clinical services, including cleaning, laundry, diet and out-patient registration has been established; and (iv) availability of specialist services is being addressed. The DHS had already taken over the implementation and management of most software activities soon after the MTR.

6.2 Transition arrangement to regular operations:The re-distribution of responsibilities between the PMC and the DHS following the MTR resulted in many software components being transferred to the Bureau Chiefs at the DHS. These included the referral system, health care waste management, training, disease surveillance, and the tribal strategy. The DHS also took over management of the cadre to ensure the maintenance of the required skill mix at project hospitals and collection and management of user charges. A separate IEC Bureau was given the responsibility for implementing the IEC component. This meant that the DHS took ownership of these components quite early in the project, and familiarized its personnel with them.

7. Bank and Borrower Performance

Bank7.1 Lending:The Bank’s lending performance is rated Satisfactory though, under a six point assessment rating, it would

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be rated Moderately Satisfactory. It was the Bank’s view at the time that maintaining a steady pipeline of SHSPs was central to its Lending Program in India. A review was undertaken of states preparing such projects, which concluded that the Maharashtra Project was one of those most likely to be taken to the Board by January/February 1998; in fact, MHSDP was taken to the Board in December 1998. The Bank team facilitated project preparation with technical and financial assistance: since states reported lack of resources to meet the expenses involved in project preparation, funds were made available from the IDA-funded National AIDS Control Project for undertaking studies and surveys. The objectives of MHSDP were similar to other SHSPs; since about 9% of the state’s population is tribal, an additional objective to address their specific health needs was included.

Clear guidelines were provided to GOM on various preparatory activities that needed to be completed in order to finalize the PIP, and missions included technical specialists to provide necessary assistance on economic, financial and technical aspects of the project. An economic analysis was completed, based on which the recurrent costs of the project and its implications for sustainability were estimated. Based on experience from previous SHSPs, the service mix to be provided at secondary level facilities was developed, as well as an essential drug list. The site surveys undertaken to estimate civil works costs were reviewed, and inputs provided to improve their accuracy. Assistance was provided in developing both the Tribal Strategy and the Environmental Action Plan; these were then reviewed and cleared in a timely manner. Critical risks to implementation were identified, and mitigating measures were included either in project design or in the policy reform package. Lessons learned from other SHSPs were incorporated, such as empowering project management in day-to-day implementation, putting in place a strong HMIS and implementing measures to ensure availability of funds for non-salary recurrent costs.

Project management arrangements were agreed prior to Negotiations; as also arrangement for financial management and audit. The appointment of key staff and establishment of an adequate funds flow mechanism were Conditions of Negotiations. A detailed set of performance indicators was prepared and agreed with GOM; and baseline data on these indicators was provided during Negotiations. However, Bank team paid insufficient attention to monitoring indicators as some of these were imprecise and/or inappropriate (Section 3.5 above).

7.2 Supervision:The Bank’s supervision performance is rated Unsatisfactory; again under a six point assessment rating, it would be rated Moderately Unsatisfactory. Supervision missions were held, mostly regularly and with a good mix of expertise, and follow up was undertaken of the policy matrix, DOs and implementation. The Bank team also facilitated bi-annual SHSP workshops, where various states shared their experiences in implementation, problem solving and innovation. Technical assistance was provided as necessary, with appropriate experts making independent trips to Maharashtra to solve specific problems. The MTR was used as an opportunity to re-program the project and the Bank took the necessary steps to cancel components that were clearly not progressing according to the agreed schedule. The team regularly updated the KPI matrix in an exemplary manner, re-validating the information through consultation with the project team. Project Status Reports (PSRs) were filed regularly. Manager’s comments in the PSRs were thoughtful, and provided the Task Team Leader with timely input on follow-up action.

However, despite consistently poor implementation performance, the project was rated as “Satisfactory” until July 2004 (well after the MTR) when implementation progress was rated Unsatisfactory but was upgraded to Moderately Satisfactory during the very next four-day mission in June 2005. Since ratings are an important management tool available to the Bank, it appears that an opportunity was lost to communicate strongly to GOM that project implementation needed attention. One of the main reasons for this – frequent turnover of PMs – was not adequately highlighted, and therefore has never been recognized

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as a problem by GOM. The MTR was delayed by about six months; this caused delays in the canceling of components that were clearly stalled, such as the GT Hospital proposal. Again the team needed to pay greater attention to monitoring; if particular indicators were not precise enough for proper measurement of outcomes, these should have been modified or other ways found to measure results or lack thereof. The MTR could have taken on board some of the recommendations of the QER, such as measuring project impacts on the poor, particularly tribals. In response to the malnutrition crisis in tribal areas, the project team did respond with the RRI, but again without an arrangement, such as a periodic health survey, to track health outcomes in key areas. Finally, in the period following the MTR, when it was clear that the project was facing difficulties, only one mission visited Maharashtra in each of 2003 and 2004. However, the arrangement of having a back-up Task Team Leader based in Delhi to provide on-going supervision support partially offset this lapse..

7.3 Overall Bank performance:Given the satisfactory achievement of project DOs and Bank performance in lending and in supervision, overall Bank performance is rated Satisfactory; under a six point assessment rating, it would be rated Moderately Satisfactory.

Borrower7.4 Preparation:The Borrower’s project preparation is rated Satisfactory. A PIP was completed and furnished to the Bank during the Appraisal Mission. GOM demonstrated its commitment to the objectives of the project with the Letter of Health Sector Development Policy, which called for improved resource allocation to the health sector and new initiatives such as public-private partnerships in health care delivery and implementation of a user charge policy. A dedicated project preparation team was put together. Activities necessary to fulfill the Bank’s requirements were completed timely, such as the Tribal Strategy and Environmental Action Plan. Stakeholders were consulted in preparing these and in finalizing technical aspects of the project. Project management arrangements were cleared by GOM for early implementation during the project. There was some delay in processing the project due to GOI’s reservations on supporting Maharashtra for an SHSP because it was relatively a better off state, which also impacted project preparation briefly.

7.5 Government implementation performance:Government implementation performance is rated Unsatisfactory. The project was characterized by implementation delays and at the MTR, only 16% of the Credit had been disbursed. These delays resulted from several factors: (i) project management was not sufficiently empowered early in the project; this seriously delayed key decisions; (ii) soon after Effectiveness, there was a hiatus in all procurement activities due to the “model code of conduct” imposed due to national and state elections; (iii) the civil works program was delayed partly due to the PMC’s unfamiliarity with Bank procedures and partly due to the nature of the civil works program, which involved more renovation than new construction: this not only delayed disbursements, but also delayed associated procurement of goods and equipment; (iv) cumbersome clearance procedures led to delays in flow of funds for key activities; and (v) lack of cooperation, at least for the first two years, between the DHS and the PMC constrained implementation; the authority to make changes lay with the DHS and the responsibility for project implementation with the PMC. Delay in completing activities associated with the GT Super Specialty Hospital led to legal covenants being in non-compliance for months; finally, it led to cancellation of the sub-component. Similar delays in implementation caused the cancellation of a further US$8 million equivalent from Category IV (Operations and Maintenance). Frequent turnover of key staff was a major impediment: the project had seven Project Commissioners, several of them for just a few months. Adequate supervision and support from GOM could have addressed most of these issues.

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GOM did take steps to address some of the observations of the MTR mission. Since the allocation of functional responsibilities between the PMC and the DHS had become confusing, GOM passed a GR revamping the management structure and clearly allocating responsibility for specific project activities to the PMC and DHS. Bottlenecks in the civil works program were cleared up and the procurement of goods and equipment was accelerated. Overall, this support came late.

7.6 Implementing Agency:Implementing agency performance is rated Satisfactory; again under a six point assessment rating, it would be rated Moderately Satisfactory. Despite delays due to factors beyond their control, the PMC was able to substantially complete all activities under the project. The civil works program, including the Arogya Bhavan office complex in Mumbai, was completed; and a large volume of procurement of goods, equipment, medicines and medical consumables, works and services was undertaken and completed by project closing. The MHSDP team managed the HMIS in an exemplary manner and used it effectively as a management tool. The PMC initiated quality improvement measures such as the MCCD and the SCD in project facilities. The scope of the Tribal Strategy was expanded to respond to the nutritional crisis in consultation with the Departments of Tribal Welfare and Women and Child Development. The MTR was used effectively to re-program some areas such as training, disease surveillance, and the Tribal Strategy. The PMC managed a number of independent studies, and excellent status reports were prepared for all missions, including a Project Closing Status Report, providing an overview of all project achievements. Finally, a comprehensive Borrower’s Implementation Completion Report was provided timely. A key issue was coordination with the DHS. Some of the key officers in the PMC were shared with the DHS, and not able to devote their time exclusively to project activities. This partly contributed to delays in re-commissioning the facilities, installation of equipment and provision of appropriate staff.

7.7 Overall Borrower performance:Overall Borrower performance is rated Satisfactory. SHSPs are complex operations, involving a range of hardware and software components. They involve a complete revamping of “business as usual” in the health sector at the state level. Despite this, all activities were largely completed; some activities, particularly software activities, were done relatively well; and several innovative approaches were introduced under the project.

8. Lessons Learned

Institutional

• External funding is inevitably used as a substitute for government funding, despite assurances provided to the contrary. Given this, project funding needs to be a share of the incremental cost over baseline cost, and this should be stringently monitored. This also holds good for sector-wide approaches.

• Project management arrangements need to coordinate with DHS operations as early as possible. In the case of MHSDP, it is likely that an even earlier transfer of functional areas to the DHS could have resulted in fewer delays in implementation. Key areas such as civil works and procurement could be left to a dedicated PMC. The advantage is that project-related areas requiring quick decision-making are then entrusted to an empowered body while long-term activities are developed with/by the personnel who will be the end-users and will thus have increased ownership.

• User fees do contribute vital resources towards non-salary recurrent costs that can make a substantial

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difference to the quality of care at hospitals. Hospitals need to be given clear guidelines on who is exempt from such charges, and the purposes for which such funds can be used.

Technical and Social

• Rationalizing service delivery through uniformity in the size and service mix at each type of hospital can be done, and it contributes to better management of the health system. For example, training programs can then be standardized, QA programs can be established, and a uniform reporting system can be put in place – all measures that would increase the clinical effectiveness of the hospital.

• The implications of the rationalization of services need to be fully understood prior introducing such rationalization. Policy makers need to think about the increased requirements of specialists, medical and para-medical staff that will emerge, and realistically assess whether this increased requirement can be sourced. If such skills are not likely to be available, then it may be wiser to re-think the service mix and pare it down to what is feasible.

• Establishing a strong monitoring mechanism is critical for good management. The system needs to be simple and user friendly, focusing on a few meaningful indicators. Ensuring that baseline data is made available prior to Project Effectiveness and following up systematically on the agreed indicators will provide a basis for measuring results and help in learning lessons. Also a feedback mechanism is necessary whereby all functionaries get regular comparative evaluations of their performance.

• Implementing a HCWMP is a requirement of GOI. Constant re-training and re-sensitization are required since it involves basic behavior change on the part of all hospital staff. A long-term strategy for such re-training needs to be part of the HCWMP.

Operational

• Phasing in of civil works needs to be built into project design, and delays in implementing any phase should be dealt with decisively through cancellation of works. If not, the construction program drags on and the hospitals are barely commissioned at project closing. Thus many of the hospitals have to forego the opportunity of benefiting from software inputs and quality improvement measures. As a result, predicted project outcomes are not fully realized.

• Synchronizing civil works and equipment procurement, particularly large equipment, is necessary, since often the physical premises for the location of the equipment need to be created. Having a dedicated team to manage this would facilitate the process. However, software activities such as IEC and QA should be initiated even when hospitals are not quite complete; else there is a risk that these will not take off at all due to delays in putting the hardware in place.

• The project should allow for the piloting of innovative schemes, particularly to enhance service delivery. Care should be taken to develop a robust data collection plan so that useful lessons can be drawn from the pilot; otherwise it will be a lost opportunity. In addition, the pilot should be initiated and completed early enough in the project cycle to allow for scaling up within the project period. The project should provide the initial resources required for the scale-up, which can then be sustained from government resources after project closing.

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9. Partner Comments

(a) Borrower/implementing agency:Government of Maharashtra’s Evaluation

The draft ICR was shared with GOM and its comments received and incorporated. GOM’s implementation completion report is in Annex 8.

(b) Cofinanciers:

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

10. Additional Information

A. The Bank's ICR Team consisted of the following members:

Jaghoman S. Kang Task Team LeaderLaura M. Kiang Operations OfficerShreelata Rao Seshadri ConsultantNina Anand Program AssistantElfreda Vincent Program Assistant

Peer reviewers:David PetersPaolo Belli

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Annex 1. Key Performance Indicators/Log Frame Matrix

Project Development Objectives

KeyIndicators

Sources of Data Baseline Level Mid Term End-Project Achievement

DO 1: Improve efficiency in the allocation and use of health resources through

Increased share of resources for the primary and secondary levels of health care in the total resources (plan and non-plan) allocated to the health sector, until year 2004

Budget Documents

Total Total Total Total MHSDP MHSDP Pr.+Sec. MHSDP T. Health

Pr+Sec as % of

Health Health Pr.+Sec. Pr.+Sec. as % of as % of without T. HealthT.

HealthPr.+Sec. MHSD

Pwithout

Nominal Real Nominal Real Nominal Real Real Real Real MHSDP

1999-00 12966.1 10342.5 670.02000-01 14805.5 14762.7 11767.9 11806.7 1176.0 1179.9 80.0 10.0 13582.8 86.92001-02 15947.9 15905.1 13023.5 12938.4 1293.0 1284.5 81.3 9.9 14620.6 88.52002-03 17182.4 16543.2 14132.9 13384.4 1210.0 1145.9 80.9 8.6 15397.3 86.92003-04 18575.2 18321.1 14858.7 13815.6 2047.0 1903.3 75.4 13.8 16417.8 84.22004-05 17504.9 17246.9 13838.5 12632.8 1665.0 1519.9 73.2 12.0 15726.9 80.32005-06 20138.7 19874.2 16116.7 14444.6 1224.2 1097.2 72.7 7.6 18777.0 76.9

Maintain an adequate expenditure for drugs at least the current estimated level of Rs. 8,800 per bed per year for drugs and ensure that this is maintained for new beds

Annual Report Rs. 8800 per bed per year

Rs. 9250 per bed per year (2002-03)

Rs. 9445 per bed per year (2005-06) Year Allocation

(Rs. per bed per year): Nominal

Allocation (Rs. per bed per year):Real Terms

1999-00 8800

2000-01 8975 9005.02001-02 9125 9065.02002-03 9250 8760.02003-04 9300 8647.02004-05 9445 8622.0

Implementation of a user charge policy, including the introduction of user charges at CHC, SDH and revision of charges at DH

Project Implementation Plan

Minimal Retention at the point of collection was instituted in Sept. 1999Rates revised in July 2001. Scheme expanded to non-project hospitals in Dec. 2002.

The user fee revenue has reached to Rs. 281 million.

Year Collection (Rs.)1998-99 -1999-00 149645352000-01 313086652002-02 548241752002-03 837550702003-04 878356792004-05 281000000

DO 2: Improved quality, effectiveness and coverage of health services

a.Improvedquality

Increase in number of institutions staffed in accordance with agreed norms (25% at baseline)

Information of JDHS NPCB

25% of all institutions

35% of all institutions

90% of all institutions

Year-wise progress

Year % Staffing at project hospitals.

1999-00 252000-01 302002-02 322002-03 352003-04 652004-05 90

b. Improved effectivenessIncrease in number of admissions to institutions under the project due to high risk pregnancies by 5

Hospital Activity Information

35.1% 72% Latest figure available for 2004: 80.8% Pregnancy

related Admissions

High-risk Pregnancy Admissions

% High Risk of Total

1999 91487 32140 35.12000 112600 76646 68.0

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percentage points at mid-term and 15 percentage points at end of project

2001 112737 78992 70.02002 111734 80478 72.02003 116227 85101 73.22004 118066 95383 80.82005 126838

Increase in the number of institutional deliveries in institutions under the project from 15% at baseline

Hospital Activity Information

15% (estimate) Not Available 6.3% (estimate)

Year No. of Cases1997-98 -1998-99 -1999-00 914872000-01 1126002001-02 1127372002-03 1117342003-04 1162772004-05 1180662005-06 126838

c. Improved access:Increase outpatient attendance in total, among women and STs, from 30% for women and 10% for SC/ST at baseline

Hospital Activity Information

5131002

Women

7297493

3721721 (51%)

8426734

4055687(49%)

No. OP Treated MTR End

Total OP 7297493 8426734Women 3721721 4055687

Data on ST utilization not available.

Project Components Indicators Sources of Data Baseline Level Mid Term Project-end AchievementImprove the institutional framework for policy development and strengthening management and implementation capacity

Increase number of institutions under project utilizing management information systems from 0 at baseline

HMIS Data Baseline surveys, project progress, annual report.

None 136 143 project hospitals

Year No. of Hospitals

% of 143 hospitals

1997-98 -1998-99 -1999-00 134 992000-01 134 99

2001-02 136 1002002-03 136 1002003-04 136 1002004-05 143 1002005-06 143 100

Improve service quality and effectiveness at district, sub-divisional and community hospitals including drug management training, Quality Assurance, monitoring and evaluation and management of hospital waste

Percentage of inpatients and outpatients in institutions under the project receiving diagnostic tests

Hospital Activity Information

44.9% 44.3% 46.4% In-patients and outpatients who received diagnostic tests

Total OPD+IP

Lab Tests % lab tests to total OPD/IP

1999 5778812 2597225 44.92000 7514756 4329490 57.62001 7056313 4720737 66.92002 8160677 3615383 44.32003 8501022 3876502 45.62004 9225935 4254043 46.12005 9415111 4365361 46.4

Increase number of medical staff trained (clinical, management, IEC, MIS, maintenance, referral. waste management) and number of training courses held under the project according to plan from 0%

Project Baseline Survey 0 50% 89898 (95%)

Category of Hospitals TotalManagerial Training 10151Clinical Training 8792Subject Related Training 42738Quality Training 4979Healthcare Waste Management

11425

Ist round of refresher training in Waste Management

5601

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at baseline IInd round of refresher training in Waste Management

6212

Total 89898

Increase number of institutions under project to introduce waste management practices based on agreed plan from 0 at baseline

Reports 0 50 (13%) 284 (72%)

Year No. % 1997-98 - -1998-99 - -1999-00 16 42000-01 31 82001-02 45 122002-03 50 132003-04 64 172004-05 284 72

Total number of civil works grounded according to plan

Reports 0 47 (31.1% ) completed

150 (99.3% ) completed

Phase-wise completion of civil worksYear No. % of 143

hospitals1997-98 -1998-99 0 01999-00 0 02000-01 1 0.72001-02 12 7.92002-03 47 31.12003-04 111 73.52004-05 149 98.72005-06 150 99.3

Improve access to basic health services, including upgrading community health centers, promoting health services for tribal and disadvantaged groups, IEC and improving referral system

Increase awareness of services offered at district and sub-divisional hospitals among total community, women and STs from 20% for women and 10% among STs at baseline

Increase in awareness of services offered at district and sub-divisional hospitals among total community, women and STs from 20% among women and 10% among STs at baseline, to 30% at mid term, and to 60% at end of the project.

Not Available Not Available 60% for women and STs

25% female and 15% STs were found aware of the service mix offered at district and sub DHs. (Source: a corollary finding of patient staff satisfaction survey - 2005). 48% female and 37% STs were found aware of the service mix offered at district and sub DHs. (Source: a corollary finding of patient staff satisfaction survey – 2005). While evaluating user fee, TISS (2005) revealed that 65% users and 36% households in tribal area are unaware of availability of certain services as free of charge at public hospitals.

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Annex 2. Project Costs and Financing

Project Cost by Component (in US$ million equivalent)AppraisalEstimate

Actual/Latest Estimate

Percentage of Appraisal

Component US$ million US$ million1. Management Development and Institutional Strengthening

12.40 13.00 105

2. Improving Service Quality and Effectiveness 99.70 104.37 1053. Improving Access and Innovative Schemes 21.90 13.55 62

Total Baseline Cost 134.00 130.92 Physical Contingencies 12.30 0.00 0 Price Contingencies 11.80 0.00 0

Total Project Costs 158.10 130.92Total Financing Required 158.10 130.92

Note:(1) The Actual/Latest Estimate were based on the data from the Project Management Cell, MHSDP, Public Health Department, Government of Maharashtra. (2) Amount converted to dollars at an exchange rate equal to the average (1998-2005) rate of Rupee 45.6355=USD1.00.

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Annex 2. Project Costs and Financing

Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent)

Expenditure Category ICBProcurement

NCB Method

1

Other2 N.B.F. Total Cost

1. Works 0.00 63.30 7.10 0.00 70.40(0.00) (57.00) (6.30) (0.00) (63.30)

2. Goods 13.00 13.00 6.40 0.00 32.40(11.60) (11.60) (6.00) (0.00) (29.20)

3. Services 0.00 0.00 21.10 0.00 21.10(0.00) (0.00) (21.10) (0.00) (21.10)

4. Incremental Operating Costs

0.00 0.00 34.20 0.00 34.20

(0.00) (0.00) (20.40) (0.00) (20.40) Total 13.00 76.30 68.80 0.00 158.10

(11.60) (68.60) (53.80) (0.00) (134.00)

Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent)

Expenditure Category ICBProcurement

NCB Method

1

Other2 N.B.F. Total Cost

1. Works 0.00 63.30 10.16 0.00 73.46(0.00) (57.00) (8.77) (0.00) (65.77)

2. Goods 7.24 15.58 7.25 0.00 30.07(7.24) (13.70) (6.00) (0.00) (26.94)

3. Services 0.00 0.00 11.60 0.00 11.60(0.00) (0.00) (11.60) (0.00) (11.60)

4. Incremental Operating Costs

0.00 0.00 15.79 0.00 15.79

(0.00) (0.00) (5.54) (0.00) (5.54) Total 7.24 78.88 44.80 0.00 130.92

(7.24) (70.70) (31.91) (0.00) (109.85)Note:

(1) An amount of SDR 24.1 million was cancelled from the original Credit of SDR 97.9 million (SDR 12.2 million cancelled on July 21, 2003 and SDR 11.938 million cancelled on April 29, 2005). The revised amount of SDR 71.8 million has been fully disbursed at the end of the project.

1/ Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies.2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff

of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units.

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Project Financing by Disbursement Category (in US$ million equivalent)

Disbursement Category Appraisal Estimate Actual/Latest EstimatePercentage of Appraisal

IDA Govt. CoF. IDA Govt. CoF. IDA Govt. CoF.Civil Work - Part ABC 63.30 7.10 66.77 7.70 105.5 108.5Equipment - Part ABC 29.20 3.20 26.94 3.13 92.3 97.8Consultants/Training 21.10 0.00 11.60 0.00 55.0 0.0Operating Costs - Part ABC

20.40 13.80 5.54 10.24 27.2 74.2

Total 134.00 24.10 109.85 21.07 82.0 87.4

Note: (1) The IDA disbursements were gathered from the World Bank Client Connection database (dated May 18, 2006). The Government disbursements were derived from the expenditure data provided by the Project Management Cell, MHSDP.

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Annex 3. Economic Costs and Benefits

Not applicable.

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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/Preparation07/23/1997 - 07/26/1997

8 Team Leader (1); Publ Health Specialist (1); Hospital Management Specialist (1);Public Health Specialist (1);Sr. Economist (1); Social Development Specialist (1); Financial Analysts (1); Procurement Specialist (1)

05/24/1998 - 05/28/1998

8 Team Leader/Economist (1); Public Health Specialist (1); Bio-Medical Engineer (1);Institutional Development Consultant (1); Architect Consultant (1); Financial Management Specialist (1) Operation Analysts (2)

Appraisal/NegotiationAppraisal 07/19/1998 - 07/27/1998

10 Team Leader (Sr. Economists) (1); Public Health Specialist (2); Architect Consultant (1) Bio-Medical Engineer (1); Institutional Development Consultant (1); Social Development Specialist (1); Operations Analyst (1); Procurement Specialist (1); Program Assistant (1)

Negotiation10/26/1998 - 10/29/1998

5 Team Leader (Sr. Economists) (1); Economist (1); Social Development Specialist (1); Sr. Disbursement Officer (1); Sr. Counsel (1)

Supervision

06/06/1999 - 06/09/1999

6 Team Leader (1); Public Health Specialist (2); Biomedical Engineer (1); Hospital Management Specialist (1); Communication Specialist (1)

S S

11/11/1999 - 11/14/1999

4 Team Leader (1); Equipment Specialist (1); Hospital Management Specialist (1); Architect (1)

S S

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05/16/2000 - 05/21/2000

7 Team Leader (1); Public Health Specialist (1); Biomedical Engineer (1); Hospital Management Specialist (1); Architect (1) Financial Management Specialist (1); Team Assistant (1)

S S

11/09/2000 - 11/13/2000

8 Team Leader (1); Public Health Specialist (2); Biomedical Engineer (1); Hospital Management Specialist (1); Architect (1) Financial Management Specialist (1); Procurement Specialist (1)

S S

05/23/2001 - 05/26/2001

7 Team Leader (1); Public Health Specialist (2); Biomedical Engineer (1); Architect (1) Financial Management Specialist (1); Procurement Specialist (1)

S S

11/11/2001 - 11/23/2001

6 Team Leader (1); Public Health Spec (2); Procurement Specialist (1); Biomedical Engineer (1); Architect (1)

S S

06/02/2002 - 06/05/2002

4 Team Leader (1); Public Health Specialists (2); Procurement Specialist (1); IEC Consultant (1)

S S

11/06/2002 - 11/13/2002 (Mid-Term Review)

7 Team Leader (1); Public Health Specialist (1); Biomedical Engineer (1); Social Development Specialist (1); Architect (1) IEC Consultant (1); Program Assistant (1)

S S

November, 2003 10 Team Leader/Public Health Specialist (1); Public Health Specialist (2);Financial Management Specialist (1); Procurement Specialist (1); Health Care Waste Mqanatement specialist (2); Biomedical Engineer (1); Architect Consultant (1); Implementation Specialist (1); HMIS specialist (1)

S S

07/13/2004 - 07/17/2004

7 Team Leader/Public Health Specialist (1); Public Health Specialist (2);Financial Management Specialist (1); Procurement Specialist (1); Biomedical Engineer (1); Implementation Specialist (1); Implementation Specialist (1); HMIS specialist (1)

U S

06/04/2005 - 8 Public Health Specialists (2) S S

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06/08/2005 Procurement Specialist (1)Financial Management Specialist (1) Architect Consultant (1)Bio-Medical Engineer (1)IEC Consultant (1)Junior Professional (1)

11/07/2005 - 11/14/2005

3 Public Health Specialists (2)Junior Professional (1)

S S

ICR11/07/2005-11/14/2005

3 Task Team Leader (1); Primary Author (1)Operations Officer (1)

S S

(b) Staff:

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

Identification/Preparation 22.4 100.8Appraisal/Negotiation 41.7 187.7Supervision 165.8 829.1ICR 10.1 50.5Total 240.0 1,168.1

The Actual/Latest estimates for the identification/preparation and Appraisal/Negotiation were recorded in the PAD; and the Supervision/ICR was based on Project System Module in the SAP.

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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

Report No. 15753-IN; New Directions in Health Sector Development; Washington DC; 1997.1.India: Maharashtra Health Systems Development Project: Summary of Negotiations, Oct. 29, 1998.2.India: Maharashtra Health Systems Development Project: Development Credit Agreement, Jan. 14, 3.1999.India: Maharashtra Health Systems Development Project: Project Agreement, Jan. 14, 1999.4.

5. Aide Memoire Supervision Mission, November 2005.6. Aide Memoire Supervision Mission, June 20057. Aide Memoire Supervision Mission, July 2004.8. Aide Memoire Supervision Mission, November 2003.9. Aide Memoire Supervision Mission, November 2002 (Mid-Term Review).10. Aide Memoire Supervision Mission, June 2002.11. Aide Memoire Supervision Mission, November 2001.12. Aide Memoire Supervision Mission, May 2001.13. Aide Memoire Supervision Mission, November 2000.14. Aide Memoire Supervision Mission, May 2000.15. Aide Memoire Supervision Mission, November 1999.16. Aide Memoire Supervision Mission, June 1999.17. Aide Memoire Appraisal Mission, July 1998.18. Aide Memoire Preparation Mission, May 1998.19. Aide Memoire Preparation Mission, July 1997.

Evaluations conducted in-house by MHSDP:

20. Maharashtra Health Systems Development Project: Status Report 200321. Maharashtra Health Systems Development Project: Project Implementation Plan; 199822. Maharashtra Health Systems Development Project: Status Report 200523. Maharashtra Health Systems Development Project: Status Report 200024. Maharashtra Health Systems Development Project: Status Report 199925. Maharashtra Health Systems Development Project: Midterm Review Savings Utilization Plan; 200226. Maharashtra Health Systems Development Project: Hospital Activity Information of Project Facilities; 200027. Maharashtra Health Systems Development Project: Status Report for Midterm Review; 200228. Maharashtra Health Systems Development Project: Referrals Guidelines and Protocols.29. Analysis of Referral Reports from District and Sub-DHs.30. Maharashtra Health Systems Development Project: User Charges Analysis of Income and Expenditure Statements; 2001.31. Maharashtra Health Systems Development Project: State IEC Bureau Report; 2005.32. Maharashtra Health Systems Development Project: Hospital Activity Information of Project Hospitals – 1999-2004.33. Maharashtra Health Systems Development Project: Disease Surveillance Report; 2002.34. Mid-term Review Proposal of Additional Requirements for Disease Surveillance; 2002.35. Maharashtra Health Systems Development Project: Project Launch Report; 1999.36. Rapid Results Initiative Pilot Program, District Nandurbar; November 2004.37. Maharashtra Health Systems Development Project: Report and Recommendations of Workshop on Biomedical Waste Management; 2004.

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38. Maharashtra Health Systems Development Project: Hospital Inspection Booklet for Sub-DHs.39. Maharashtra Health Systems Development Project: Booklet on Evaluation of DHs Through Panel of Experts; 2002.40. Maharashtra Health Systems Development Project: Status of Skill Mix; 2000.41. Maharashtra Health Systems Development Project: Manual for Recommissioning of Project Hospitals; 2003.42. Maharashtra Health Systems Development Project: Implementation of Civil Works; 2003.

Other studies commissioned by MHSDP:

43. External Evaluation of the User Fee Scheme in First Referral Hospitals in Maharashtra. TISS, Mumbai; 2005.44. Evaluation of Nursing Training Program. Faith Health Care Pvt. Ltd. and Consulting Engineering Services India Pvt. Ltd., New Delhi; 200345. Maharashtra Health Systems Development Project: Report on Medical Waste Management Study. Medicon Management Services Pvt. Ltd., Bangalore; 200046. Manual of Medical Certification of Cause of Death. State Bureau of Health Intelligence and Vital Statistics Maharashtra; 200247. IEC Report. State Health Information, Education, and Communication Bureau, Maharashtra.48. Project Report for the New GT Super Specialty Hospital Mumbai. HOSMAC India Pvt. Ltd., Mumbai; 1998.49. Patient and Staff Satisfaction in Public Hospitals of Maharashtra. TALEEM Research Institute, Ahmedabad; 2002.50. Patient and Staff Satisfaction in Public Hospitals of Maharashtra. Gokhale Institute of Politics and Economics, Pune; 2003.51. Cost of Care at Selected Project Hospitals. Gokhale Institute of Politics and Economics, Pune; 2001.

Additional References:

Benbassat J, Haklai Z, Glick S, Friedman N. Determinants of hospital utilization: the situation in Israel and selected countries. Isr Med Assoc J. 2000 Nov; 2(11).Duckett SJ. PMID: 11974959. Australian Health Rev. 2002;25(1).Khoo, L. International Comparison of Key Healthcare Utilization Trends. MOH Information Paper 2004/04; Government of Singapore.Reza Khatami S. M., S.K. Kamrava, B. Ghalehbaghi and M. Mirzazadeh. National university hospital discharge survey in the Islamic Republic of Iran. Eastern Mediterranean Health Journal; Volume 6, Issue 2/3, 2000.

Websites accessed:

www.emro.who.intwww.mohfw.nic.inwww.whosea.orgwww.worldbank.org

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Additional Annex 8. Borrower's Implementation Completion Report

MAHARASHTRA HEALTH SYSTEMS DEVELOPMENT PROJECT, CREDIT NO - 3149 IN

9.1 Details Original Revised

Key Project Data

Board Approval by Board of Directors 8 Dec. 1998Project & DCA Agreement 14 January 1999Project Effectiveness 24 February 1999Project Period 6 Years 9 MonthsProject Closing 30 November 2005Credit Closing 30 November 2005Borrower/Implementing Agency Govt. Of India / Govt. Of Maharashtra

Assessment of Development Objective and Design, and Quality at Entry

9.2 Original Objective: (i) To improve efficiency in the allocation and use of health resources through policy and institutional

development. (ii) To improve the performance of health care system through systemic enhancements in the quality and

effectiveness of health services at the first referral level and selective coverage at the community level to better serve the most needy sections of society.

9.3. Project Components: The initial SDR Credit allocation to the Project of 97.9 million was revised to XDR 73.762 to million (US $ 106.63 million equivalent), consisting of three major components 1. Management Development and Institutional Strengthening (9.79% of base cost)2. Improve Service Quality, Access and Effectiveness at Secondary Level Hospital (77.78% of base

cost) and 3. Improve access and equity to disadvantaged areas (12.43% of base cost). The Project financed for renovation and expansion of hospital buildings, medical equipment, vehicles, medicines, medical lab supplies, MIS/IEC materials, furniture, professional services and consultants, training, workshops, fellowship, studies conducted, salaries and operating cost and maintenance of building and equipments.

9.4. Achievement by Developmental Objective:Progress towards the achievement of the Development Objectives of the Project, including policy, quality, access and effectiveness, and activity indicators, is satisfactory. The Objective wise achievement is elaborated below:

9.4.1. Developmental Objective 1: Policy Indicators to improve efficiency: • The overall budget for the primary and secondary health sector, including external assistance,

has increased from Rs. 12966.1 million in FY99-00 to Rs 16116.7 million in FY 05-06; in pursuant with the specific commitment made by the State Govt. in Development Policy Matrix.

• The share of health (including externally aided projects) in the state budget increased from 3.2% in FY99 to about 3.5% in FY00, and increased further to 4% in FY00-01. In FY01-02 it was 3.6%

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but decreased to 3.16% in FY02-03 and further to 3.14% in FY 03-04, 2.6% in 04-05 with slight recovery of 3.38% in 05-06.

• The share of resources to primary and secondary health was 79.77% at the baseline and 80.03% at current year (FY 05-06). It is worth noting that the decline in allocation in primary care is not associated with concomitant rise in tertiary care allocation, which remains hovering during 1998-2006.

• The overall object-wise allocation shows continuous decline in salary since 2001-2002; 44.97% in 2001-02, 38.47% in 2002-2003; 39.28% in 2003-04 45.46% in 2004-05 and 45.42% in 2005-06. This appears to be laudable achievement.

• The project sub - objectives related to drugs entails – "Maintain an adequate expenditure for drugs at least at the current estimated level of Rs. 8800 per bed per year for drugs and ensure that it is also maintained for new beds." The actual Expenditures for drugs per bed per year is incremental during the project period as given below:

99-00 00-01 01-02 02-03 03-04 04-05 8800 8975 9125 9250 9300 9445

• Another area of achievement under the Project is related to user charges. Government introduced

user charges at all levels of health institutions, revised the rates and also issued relevant orders for its retention and use at the point of collection itself. The year 1999 witnessed a collection of Rs. 15 million from the user fee at the project hospitals and now the same revenue has reached to Rs 281 million in 2005. District Hospitals happen to be the primary revenue generators from user fee. The revenue centers identified are OPD registration, diagnostic services, and indoor charges. The Government has extended the implementation of user charge policy at the non-project hospitals in a manner consistent with its exemption policy for those below the poverty line.

9.4.2. Developmental Objectives 2: Quality, Effectiveness and Coverage Indicators: a) Improved quality:• Increase in percentage of institutions staffed in accordance with agreed norms.

Institutions staffed according to norms were 42% against the target of 35% set for the mid-term and 85% against the target of 90% set for the end of project.

• Increase in laboratory equipment and investigations.The laboratory investigations per 100 out and inpatients have increased at SDH100 and OH; while that at DH SDH-50 and CHC are hovering.

• Increase in supply of critical drugs and equipmentThe critical drugs and consumable have been supplied annually to the project hospitals. The supply of space occupying equipment is synchronized with the completion of civil works. However, the supply of minor equipment, surgical packs, waste logistics, office equipment etc., has been executed as per approved norms.

• Increase in patient satisfaction (based on client survey for total, women and STs)Four rounds of Patient Staff satisfaction surveys were conducted for the sake of concurrent evaluation of project effectiveness. In particular, the Patient Staff satisfaction surveys in 2003 and 2005 reveal that the satisfaction level of outpatient particularly at Other hospitals (Sub District Hospitals and CHC-PI) has increased tangibly; which is largely attributable to supply of adequate project inputs like critical drugs and equipment as well as the physical structure. None of the rounds of patient satisfaction surveys revealed any discrimination towards females and ST patients at project hospitals; which is laudable achievement. The hospital evaluation through consumer/NGO representatives (2005) could examine the gender sensitiveness and

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poor friendliness of the project hospitals and the results are positive. b) Improved effectiveness:• Increase in number of admissions to institutions under the project due to high-risk

pregnancies by 5 percentage points at mid-term, and 15 percentage points at end of projectOverall admissions due to pregnancy related complications at all Project Hospitals have increased from 7% at the baseline to 12% by December 2004. Lesser admission due to pregnancy related complications at SDH-100, SDH-50 and CHC PI is probably attributable to compromised availability of obstetrician, referral system and partly to delay in re-commissioning.

• Increase in the percentage of institutional deliveries in institutions under the project from 15% at baseline to 20% at mid-term and to 30% at end of project.The proportion of deliveries in the total inpatients appears to hover around 14%, meaning thereby that the project has provided only modest contribution to this output. The tangible rise in institutional deliveries is witnessed only at SDH-100 indicating probably the effect of synchronized project inputs (material and human).

• Increase in number of major surgeriesThe number of major surgeries at various levels of project facilities is showing continuous rise. This is probably attributed to the tangible advancement in the technological paradigm through the following project inputs:i. State of the art OT complexes, equipment package like endoscopes, OT & anesthetic equipment ii. Skill enhancement of Doctors and Nurses.

• Increase in treatment and referral of patients with selected diseases and conditions (ARI, childhood diarrhea, malaria, TB and pregnancy related conditions)The ups and down in case of both selected pediatric and obstetric cases probably indicates that there is a scope for the State to improve the synchronization of human and material resources as well as the institute demand management initiatives for optimizing the use of NICU and Labor suits.

c) Improved access• Increase total outpatient attendance, and the attendance of women and STs.

There is a substantial rise in the outpatient attendance at the project hospitals; in spite of the fact that Outpatient registration fee is almost mandatory for all users and the hike in user fee rates in 2001. In particular, females constitute almost half of the outpatient attendees by the mid-term as against 46% at the baseline as per HAI 1999.

• Increase the proportion in total outpatient attendance of women & STs, from 30% for women and 10% for STs at baseline, to 35% & 12% respectively at mid-term, and to 50% and 15% respectively at end of project.The proportion of females in the OPD attendees has been almost achieved, but the same is not true in case of proportion of STs. This meager increase with respect to STs may be because of difficulty in elicitation of the caste, misclassification of tribes and upward social mobility. While evaluating the user fee scheme, TISS (2005) has revealed a tangible rise in curative patient care in the tribal project hospitals, with better targeting of exemption mechanism..

• Increase the proportion of facilities providing the defined service norms (disaggregated bylevel of facility).Service norm entails diagnostic, therapeutic and ancillary services for various categories of the hospitals, which the Project could evolve in view of the existing disease burden. Based on the service mix; Project Management could finalize the space norms, skill and staffing norms, equipment norms, training needs etc. The hospital evaluation through panel of experts could ascertain that 83 % of project hospitals could conform to the clinical services in the project

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hospitals. Even in absence of appropriate skill mix, most of the clinical services defined in the PIP are made available at the project hospitals either through availing the services of specialist doctors from neighbouring hospitals or honorary/ hiring the skills.

• Increase in referrals from PHCs to CHCs, area, sub-district and district hospitalsA marginal rise in the proportion of referred in outpatients has been witnessed from 1% at baseline to 2.5% by December 2003. The proportion of referred in inpatient admissions have increased from 4% to 7%. Female comprise 46 to 50 % of referred in cases and 41 % to 50 % of referred out cases. The dominant feeders of referred in cases for CHC and DH are PHC and CHC respectively. The referred out cases of CHC and DH go to DH and teaching Hospital respectively. The external evaluation of user fee also reveals that Sub District Hospitals & Rural Hospitals have started sharing the caseload of District Hospitals; which is laudable development (Allocative efficiency).

In tune with the objectives, the project was planned, implemented, monitored, supervised and took corrective actions for optimal utilization of all the health care facilities. The studies and survey carried out by external agencies regarding cost of care, utilization of facilities, evaluation of user fees has revealed that the project could contribute significantly to improving the health status of the communities. The successful execution of pilot of Rapid Result Initiative at 6 blocks of District Nandurbar speaks of the State's commitment towards tribal welfare. The services provided by the hospitals continue to be definitely pro-poor. Although, this might be just on account of ‘free’ services, the fact remains that it is not only due to free service but also ‘good past experience of the hospital’, as reported reasons for getting admitted to the hospital (45% response). Thus one can conclude that the project inputs could improve substantially the quality, effectiveness and efficiency. The access indicators also point to the fact that the project hospitals are poor friendly and in particular mother friendly.

9.5. Achievement by Component:

9.5.1. Project Component I: Improve the institutional framework for policy development and strengthening management and implementation capacity (Allocation- Rs. 586.81 Million; Investment – Rs. 609.06 million)

• Increase number of institutions under project utilizing management information systems from 0 at baseline by 25 District Hospitals at mid-term. and 331 project institutions at end of project.All (143) project facilities are using health management information systems by mid-term and all (143) project facilities as well as 279 non Project hospitals are using health management information systems by the end of project as against 0 at baseline. The information being collected through the MIS system is utilized for decision making at many levels. At the hospital level this includes hospital management (service use, resource management, user fee collection) and patient management (quality of care, continuity of care, disease patterns) and at the state level it includes performance management and performance linked budgeting.

• Number of studies, workshops and seminars conducted.So far, 19 studies have been accomplished. 115 workshops and seminars have been organized to streamline the operational aspects of the project components. The studies could serve policy reforms, system improvement and evaluation of on-going component or scheme.

9.5.2. Project Component II Improve service quality and effectiveness at district, sub-district and community hospitals including drug management training, Quality Assurance, monitoring and

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evaluation and management of hospital waste (Allocation- Rs. 4662.11 million; Investment – Rs. 4638.37 million)

• Percentage of inpatients and outpatients in institutions under the project receiving diagnostic tests from the baseline, to an additional 5% over the baseline at mid-term, and an additional 20% at end of project.The relative proportion of laboratory tests appears to be lesser at lower level of project hospitals, which could be a result of excessive reliance of doctors there on symptomatic treatment. The x-rays per 100 outpatients and in-patients have remained at around 9% as per Revalidated Hospital Activity Information. However, this has to be interpreted in the light of supply of ultrasound under the project. In the era of Evidence based Medicine, the diagnostic services assume greater significance.

• Increase number of medical staff trained (clinical, management, IEC, MIS, maintenance, referral. waste management) and number of training courses held under the project according to plan from 0% at baseline, to 50% at mid-term, and to 100% at end of project.

Disaggregate by type of hospital to determine distribution of trained personnel across hospital typeCategory

of Hospitals

Managerial Training

Clinical Training

Subject Related

Training

Quality Training

Healthcare Waste

Management

Ist round of refresher

training in Waste

IInd round of refre. Training in Waste

DH 4263 857 17950 2091 6125 1365 3865OH 508 40 2137 249 1021 451 789SDH (100) 1015 1948 4274 498 1215 1290 451SDH (50) 2436 3180 10257 1195 2736 2244 654CHC PI 1929 2766 8120 946 328 251 453Total 10151 8792 42738 4979 11425 5601 6212

• Increase number of institutions under project to introduce waste management practices based on agreed plan from 0 at baseline by 30% at mid-term, by 70% by end of project including all DH and SDH with 100 beds.72% of the hospitals under the Directorate of Health services (both project and non-project) have initiated eco-friendly waste management by December 2005. The end treatment engineering option of deep burial pit has been made available at 366 hospitals, while 14 hospitals have tie up with Common Treatment and Disposal Facilities.

• The proportion of civil works grounded would be 70% of plan, 10% completed, 10% equipped and 5% fully operational at mid-term, and 90% completion of all aspects of civil works at end of projectAll 151 works have been grounded and completed (100%) as on 31 December 2005. Re-ommissioning of all project facilities has been accomplished. The initial sensing by Ma Foi (2003) and the patient staff satisfaction (2005) have lauded the adequate space created in the project hospitals which facilitates patient and provider movement in the hospitals. Equipment has been supplied to them.

• Patient turnover rateHospitals 1999 2000 2001 2002 2003 2004 2005DH 63 68 69 70 69 70 73

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OH 63 91 92 86 90 80 82SDH (100) 64 102 98 89 89 62 67SDH (50) 72 77 85 84 82 68 80CHC PI 52 76 80 87 96 81 95

The decline seen in case of SDH 100 and SDH 50 has to be viewed in the light of enhancement in bed capacity through project.

• Bed occupancy rateHospitals 1999 2000 2001 2002 2003 2004 2005DH 85 90 90 87 84 83 88OH 90 121 119 86 79 69 70SDH (100) 84 78 79 72 63 49 55SDH (50) 66 61 63 56 50 46 55CHC PI 55 54 55 53 59 60 53

The decline seen in case of SDH 100 and SDH 50 has to be viewed in the light of enhancement in bed capacity through project.

• Average length of stay in number of daysHospitals 1999 2000 2001 2002 2003 2004 2005DH 4.9 4.7 4.6 4.7 4.44 4.32 4.41OH 3.9 4.9 4.6 3.7 3.17 3.16 3.09SDH (100) 3.2 2.9 2.9 3.0 2.73 2.86 2.97SDH (50) 2.6 2.8 2.6 2.4 2.23 2.25 2.52CHC PI 2.1 2.1 2.0 2.11 1.42 1.88 2.04

The decline seen in ALOS could probably be viewed as an attempt to weed out inefficiency due to preoperative ALOS, timely discharges etc.

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• Number of outpatients per inpatient bed dayHospitals 1999 2000 2001 2002 2003 2004 2005DH 1.0 1.2 1.1 1.0 0.94 1.01 1.09OH 0.8 0.8 0.8 0.67 0.78 0.64 0.64SDH 100 2.8 2.8 2.7 2.17 2.02 1.52 1.63SDH 50 2.3 3.1 2.8 2.53 2.54 2.23 2.33CHC PI 1.9 2.7 2.3 2.19 2.54 2.61 2.287

Except other hospitals, all categories of hospitals are more than unity with respect to outpatients per inpatient bed day..

• Percentage of admissions during a causality period to routine admissions*Hospitals 2000 2001 2002 2003 2004DH 07 06 43 45 47OH 06 58 30 44 53SDH (100) 15 44 48 46 45SDH (50) 20 24 45 51 50CHC PI 15 42 38 40 41

It appears that the availability of round the clock emergency service is increasingly ensured with the help of project inputs. This is expected to enhance coverage of services.* All admissions after regular hospital hours are deemed “casualty” admissions. This indicates the availability of staff at hospitals to admit patients after regular hours.

• Percentage of inpatients acquiring infection during hospital stay: Surgical wound Sepsis Rates

Hospital 2004 2005DH 0.49 2.21OH & SDH (100) 1.53 1.09SDH (50) 2.24 2.3CHC PI 0.22 0.00

The above mentioned clinical indicators information is available for only 2004 and 2005. The data is used only for intra hospitals comparison.

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• Percentage of facilities meeting equipment norms at each facility

The status of installation of 9 critical equipment is as below:1999 2000 2001 2002 2003 2004 2005

DH 0 0 5 10 15 19 27SDH-100 0 0 10 10 19 21 22SDH-50 0 0 15 22 29 42 51CHC PI 0 0 15 25 29 35 39Total 0 0 45 67 92 117 139

• Percentage of facilities without stock out of selected essential drugsNot monitored precisely.

• Percentage of institutions undertaking medical audits1999 2000 2001 2002 2003 2004

DH & OH 30 50 60 60 60 75SDH-100 0 0 0 0 10 25SDH-50 0 0 0 0 10 25CHC PI 10 15 15 15 25 25

• Percentage of secondary hospitals passing inspection by panel of expertsYear No. of DHs

inspected% No. of

SDH/CHC inspected

%

00-01 21 100.00 96 83.4801-02 21 100.00 98 85.2202-03 21 100.00 115 100.0003-04 20 95.24 108 93.9104-05 21 100.00 119 100.00

The State endeavor of hospital evaluation is novel. The Panel of Experts discussed the strengths, weaknesses, opportunities and threats of the hospitals with the local Medical Superintendent and Civil Surgeons as a memo reading on the last day of hospital inspection.

9.5.3. Project Component III Improve access to basic health services, including upgrading community health centers, promoting health services for tribal and disadvantaged groups. IEC and improving the referral system (Allocation- Rs. 745.05 million; Investment- Rs. 424.53 million)

• Increase in awareness of services offered at district and sub-divisional hospitals among total community, women and STs from 20% among women and 10% among STs at baseline, to 30% at mid-term, and to 60% at end of project

25% female and 15% STs were found aware of the service mix offered at district and sub district hospitals, as per the corollary finding of patient staff satisfaction. 48% female and 37% STs were found aware of the service mix offered at district and sub district hospitals as per the corollary finding of patient staff satisfaction – 2005.

• Awareness among doctors and nurses of functioning of referral system.

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70% doctors and nurses were found aware of the functioning of the referral system under MHSDP. This could be attributable to partial coverage of training under MHSDP. (Source: corollary finding of patient staff satisfaction).

9.6. Details of Activities by Project Components:9.6.1. Management Development & Institutional Strengthening:

(i) Improving the Institutional framework for policy development:The 19 studies could aid policy reforms, system improvement and evaluation of on-going component or scheme. Policy interventions after extensive researching in Cost efficiency and Cost recovery, Biomedical waste management, Biomedical Equipment Management, HMIS, Training, Supply side of IEC for Quality Management, Quality of care. Area wise studies are as below: 1) Cost efficiency and Cost recovery

a) Cost of care at selected project hospitalsb) External Evaluation of User Fee

2) Biomedical Equipment Management and usea) Equipment Status Surveyb) Recommissioning review

3) HMISa) Up gradation of HMIS and developing web enabled software b) Revalidation of Hospital Activity Information System

4) Biomedical waste management, a) Waste Audit at selected project hospitals

5) Traininga) Evaluation of 3 Weeks' Training in Hospital Managementb) Evaluation of Nursing Training

6) Supply side of IEC for Quality Managementa) IEC strategy developmentb) Post sevabhav and sankalp survey

7) Quality of care a) Revision of Bombay Nursing Home Registration Act – 1949b) Development of Clinical Indicatorsc) Patient and Staff Satisfaction 2001d) Annual Patient Staff Satisfaction 2003 and 2005e) Prescription audit of outpatient attendees f) Medical audit of inpatient deaths g) Hospital rating through External consultants

The findings and the recommendations were discussed and deliberated in several workshops. Based on the consensus reached, the policy initiatives have been taken under MHSDP and Guidelines were also issued.

(ii) Strengthening management and Implementation Capacity:Network of following Institutions was developed in order to streamline management and decision-making:i. Project Governing Board headed by Chief secretary of Govt. of Maharashtra (8 meetings)ii. Project Steering Committee headed by Secretary Public Health of GOM (39 meetings)iii. Project Management Cell (a.Design and engineering wing; b.Medical Wing;c.Finance wing)iv. Regional Management cell: Asst. Director (Medical), Executive Engineer, Biomedical Engineerv. District Management committee headed by District Collectorvi. Hospital Visiting Committee

At State level, the Project has been implemented and managed by Ex-officio Secretary as Project

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Commissioner, supported by Senior Health Officials, Civil Engineers, Finance & Account officers, Procurement consultant. Officials have been trained in their respective discipline through various training institutions, workshops and seminar both at national and at international level, to build their capacity and equip them to effectively implement the project. The standardization of equipment norms and initial equipment status survey could help arrive at facility specific requirement of equipment, which was useful for preparing procurement packages. The following equipment maintenance modalities are instituted: 1. Annual Maintenance Contract with spare parts or Comprehensive Maintenance Contract (CMC) 2. Adhoc contracts - (AH) 3. In-house (through HEMR workshops with mobile equipment van) – (IH). The computerized Project Financial Management System has been instituted and Project Management Reports are generated for facilitating better control over financial matters. The monitoring and evaluation of all project activities have also been instituted and so is true about the arrangements for feedback.

At Mid Term Review (November 2002), the Government had revamped the management structure and aligned the Project Management Cell (PMC) with the Directorate of Health Services. Following the Government Resolution of January 1, 2002, the implementation of several key components had been transferred to Bureau Chiefs in the Directorate. The Project Management closely coordinates the supervision and monitoring of the technical components of the Project, which have been transferred to the Bureau Chiefs of the Directorate of Health. As recommended during the Mid Term Review (MTR), Project Management has also ensured greater focus on the software activities and skill mix. The Project has established an efficient system to monitor the quality of services, hospital waste management, disease surveillance, equipment maintenance, and financial progress. HMIS cell has been energized for updating performance indicators and improve the referral system. Training on disease surveillance through GIS and computerization of hospital data have been given due priority by HMIS.

At regional level, the Project has established design and engineering wings as well as Health Equipment Maintenance & Repair Workshops with adequate qualified trained staff. This helps to facilitate the timely re-commissioning of the health facility. Health Equipment Maintenance and Repairs (HEMR) workshops have been established in 8 Regional Head Quarters and necessary tools and machinery have been provided. A well-equipped Van with tools and kits have been provided to each HEMR for carrying out repairs on spot, servicing of equipments and users orientation of the hospital staff in the periphery. The Bio-medical engineers have been appointed and trained to service the equipments. This could result in reduced downtime and better usage of the equipments. Regular training and workshops were conducted for maintenance crew and equipment handlers both medical and para-medical.

At District level, the District Management Committees have been formed under the chairmanship of District Collector for regular monitoring of reform initiatives and inter-sectoral issues needing convergence. A system has been adopted to track the manpower position and mismatch, and minimize the gap by appointing persons with the required skills on contract basis.

At facility level, the Hospital Visiting Committee has offered a platform to improve accountability of the hospitals. The training programme for Heads of the hospitals in Hospital and Health Administration as well as the provider behavior change through HR experts helped strengthen the service delivery. In particular the later approach of service orientation and team building through HR experts is absolutely bold and pathfinder.

(iii) Developing surveillance capacity for major communicable diseases:

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The Disease Surveillance envisaged the reporting of 17 outbreak-prone communicable diseases to the Directorate of Health Services on weekly basis. The organizational structures like the State Rapid Response Team and District Rapid Response Teams have been created, which are now fully functional. Members of these teams have been trained in analytical skills related to outbreak investigations as well as control of outbreak. The State has shown pathfinder approach of networking the State, regional and district public health laboratories through the project inputs in order to improve their diagnostic capabilities and monitoring of epidemics. As a result; the State has witnessed improved quality of reporting and epidemic forecasting, quality of diagnoses and rapidity of responses to outbreaks in the form of investigation and prompt control of epidemic. This could reduce the number of morbidity and mortality. Number of institutions using surveillance data has improved significantly and the quality of data, quality of diagnosis and rapidity of response has improved.

(iv) Developing capacity for HMIS:Hospital Activity Information has been streamlined and strengthened under the project. Guidelines have been issued to improve internal validity of hospital activity information. Integration and up gradation of health and hospital MIS, Web enabled software and departmental web portal have been novel. The set up is put to use after providing necessary equipments and training at the District, Regional and State level. The district level data will be transmitted to state level periodically for its consolidation and analysis for effective decision-making.

9.6.2. Improving Service Quality, and Effectiveness at District and Sub District Hospitals: (i) Upgrading Sub-District, District and other Hospitals:

The Project has completed renovation & expansion of all 21 District Hospitals, 7 other Hospitals, 24 Sub District Hospitals 100 bedded, and 52 Sub District Hospitals 50 bedded. In addition to above the project constructed 1 Arogya Bhavan at Mumbai, 1 IEC bureau at Pune, 6 Health Equipment Maintenance & Repairs Workshops buildings, 1 State level and 16 district Public Health laboratory buildings, 4 blood banks buildings, 12 Hospital Training Centers, 366 Deep Burial Pits, Dharamshala and 33 Trauma Care Centers. The hospitals and the project facilities were upgraded by providing latest equipment, supplies, furniture, drugs and vehicles according to the clinical norms. On completion of these buildings, adequate staffs, equipments pictorial signage have been provided.

ii) Upgrading the effectiveness of clinical, Management and support services at Sub-District, District and other Hospitals:

Technical staff have been recruited and trained for effective usage of supplied equipments. The District Management Committees have been empowered to outsource the clinical services in Dentistry and Psychiatry at 50 & 100 bedded sub-district hospital respectively. Major Medical Equipments have been procured and provided to the Project hospitals to enhance the diagnostic and therapeutic capabilities and capacities.

• Drug ManagementDrug budget of the Government has been increasing over the years reflecting increase in per bed drug budget allocation from Rs.8800 in FY 99-00 to Rs.9445 in FY 2004-05. The centralized drug procurement using World Bank procedure could ensure economy, efficiency, transparency and quality assurance.

• Training undertaken under the project The Project has to its credit huge number of staff of various cadres trained in various themes. The initial lessons learnt in case of nearly unstructured in-house clinical skill training at Government Medical Colleges made us to rethink the training strategy. Even the lauded reform with respect to training approach could hardly attract the trainees.

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• Quality AssuranceThe improved quality of health services has been witnessed during annual hospital evaluation through panel of experts, Annual Patient Staff Satisfaction survey & monitoring of core clinical indicators.

• Monitoring and evaluationEnsuring optimal utilization of services at the health care facilities by development of Performance Indicators and their analysis, and thus bringing about regular performance appraisals through grading has resulted in improved effectiveness.

• Biomedical Waste ManagementBio-medical Waste Management mechanism has been adopted in almost all project and non-project hospitals by creating end treatment disposal options like constructing deep burial pit/landfill, tying up with common treatment disposal facility (CTDF).

• Non-clinical servicesNon-clinical services have been outsourced in most of the hospitals and the impact is analyzed in terms of improved patient satisfaction with respect to dimensions like cleanliness, water supply, etc.. The status as on 31 August 2005 is as follows:

Clean Laundry Diet Ambulance Driver Security.90 59 31 42 86

Work force analysis by BAIF, Pune and Annual Patient Staff Satisfaction rounds by M/s. Gokhale Institute of Politics & Economics, Pune have lauded the quality of outsourced cleaning services at project hospitals.

9.6.3. Improve Access and Innovative schemes (US$ 7.18 million)(i) Selective Upgrading of Community Health centers:

The Project has completed need-based renovation of all 39 Community Health centers without addition of beds; which are inclusive of 4 new additions after Mid Term Review. The hospitals were upgraded by providing latest equipment, supplies, furniture, drugs and vehicles according to the service norms. In particular the Labor suit, NICU and OT complex was provided special attention in order to improve access of the essential obstetric care and neonatal care.

(ii) Promoting Health services for Tribal and Disadvantaged groups:Health check-up camps at tribal sub centers have been conducted with an objective of providing health care to the tribal inhabitants. The number of total health check up camps organized from 2001-2005 is 9043. The use of Lady Medical Officer and /or hiring Lady doctor has enhanced the access of camps to female. Action Research Project at Dhadgaon (Nandurbar) was executed with a view to improve the neonatal survival. In order to decrease the mental distance between health care providers and the tribal inhabitants, training was imparted to health workers in tribal dialect and culture. The traditional healers were offered training in primary care through non-governmental organizations and encouraging them for more referrals. The innovative approach of Rapid Result Initiative executed in 6 blocks of district Nandurbar aimed to improve health and nutritional outcome of tribal inhabitants.

(iii) Improving referral mechanism & linkages with primary & tertiary level:Project has implemented effective referral mechanism by providing technical support to primary level hospitals like PHCs / PHUs to CHCs (FRUs) and sub-district hospitals in a phased manner with provision of feedback mechanism to the referring institution. Based on the results of pilot implementation in 2 districts, the Referral mechanism has been strengthened by introducing referral and feedback cards, implementing referral guidelines, incentives for referred patients, improving transport facility and TOT training to medical officers.

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(iv) Information, Education and Communication:In view of ongoing up gradation and hardware inputs, the Project Management preferred to commence with the Supply side IEC aiming to bring desired change in health service provider behavior, rather than the Demand side IEC addressing Health seeking behavior. It is absolutely an innovative, pathfinder and bold initiative. The training workshops through HRD experts called as Sevabhav and sankalp training were implemented in District Ahamednagar on pilot basis and now the endeavour has been replicated in 17 more district hospitals. Besides, the efforts are rolled down further to cover sub district hospitals and CHC-PIs through in-house key trainers. The Project Management wishes to recommend the Sevabhav training with some modifications.

Summary: The Indian state of Maharashtra is having relatively better Human Development Index (55) comprised of literacy (including female literacy), per capita income and Infant survival and also having relatively lesser proportion of people from scheduled caste and tribe in overall national context.

The economic and fiscal analysis reveals the following features:1.a) Project has rationalized service mix based on the burden of diseases and based on it other norms have been standardized.b) The cost recovery through user fee in the year following the end of the project has exceeded the anticipations.

2. The technical analysis reveals the following features:a) The exercise for selection of locations for up gradation is transparent and scientific.b) Project has rationalized service mix based on the burden of diseases and based on it other

norms namely space, skill, staff, equipment, etc. have been standardized. The clinical norms of 14 skills at DH, 8 at SDH 100, 5 at SDH 50 and 3 at CHC will go a long way in improving the health system.

3. Institutional analysis reveals that except SPC all other institutions were created and offered necessary power to run the show. The activation of Hospital Visiting Committees could not yield desired results in view of the change in guard. 4. The social analysis indicates the project has been very methodical and invited participation; the evidence of which could be revealed during the Stakeholders workshop.5. The environmental analysis leads us to believe that the project has been very methodical in putting the biomedical waste management system at both project and non-project hospitals; although further improvement is possible with better interface between polluters and enforcers.

In nutshell, it is reiterated that the showcasing efforts of MHSDP are reform initiatives like user fee and outsourcing, client friendly civil works, standardization of equipment as an element of rationalization of service mix and mechanism to maintain them through HEMR, Comprehensive Quality Management Initiatives, Sevabhav and sankalp training as a supply side IEC endeavor, Biomedical waste management, Disease surveillance and Hospital Activity Information. The areas with honest efforts not yielding desired outputs are skill mix, staffing, referral, system tribal strategy, and public private collaboration. The limited success has been witnessed in training, drug management.

Lessons Learnt:• General belief that project mode could only be possible through a dedicated project management but ownership dilemma could be hard to resolve.• Use of data locally for managerial decisions could be the sign of success of HMIS. Building analytical

skills of local mangers could be beneficial to sustain the information culture in both surveillance and HMIS.

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• Constant interface between end user and engineer could ensure user friendliness of physical structure.Preventive maintenance and routine care by the user is very important to reduce the down time equipment

• Identification of training areas through prescription audits, death audits, hospital audits, referral data, could be a novel approach and so is true about outsourcing of training to private agencies.

• Patient and staff satisfaction should become a regular feature in order to assess and improve responsiveness of public hospitals. Need is felt to change the mindset of doctors working at lower level hospitals to shift from symptomatic approach to evidence based clinical services. To make the health care delivery system client friendly, the treatment and communication are two important dimensions needing attention.

• Employee empowerment and bottom up approach need to be built in for sustaining the endeavor of Continuous Quality Improvement

• Leaving the responsibility of Bio-Medical Waste Management to lower tier employees without supportive supervision may not help to sustain eco-friendly waste management practices.

• The project has provided modest referral support to primary health care. Completion of referral loop is vital and demand for regular interface between various levels of health care providers.

• For improving access to critically ill BPL cases, it is essential to monitor the use of user fee revenue for free transportation.

• Although, the tribal strategy of MHSDP envisioned enhanced service use by vulnerable people, its sustainability and regularization will need attention.

Bank PerformanceBankLending: Satisfactory. The project was well prepared with strong involvement from both the Bank and State Government. The Project Appraisal Document (PAD) is a summary document consistent with both State and Bank priorities. For the most part, preparation teams were fielded with the required expertise and the skill-mix was maintained throughout identification, preparation, and appraisal / negotiation. Important area of expertise, however, was inadequately represented – private sector development. This inadequacy is reflected in a lack of attention to a comprehensive approach toward facilitating engagement and development of the private health sector. Assessment was slightly hindered by the lack of measurability of development objectives and specifications of some performance monitoring indicators (baselines, targets, etc) in the PAD.

Supervision: Satisfactory. Overall project supervision and reporting was adequate, for the most part, as were mission terms of reference, frequency of supervision and time spent in the field. Aide-Memoires and follow-up letters focused on key, specific detected implementation problems, suggested interventions, and follow-up agreed actions for the State. The team was innovative and efficient in its use of resources, and made good use of support from the India Country Office; third parties were involved when needed. The supervision effort also deserves credit for fostering learning exchanges among the states, and in dealing effectively with implementation barriers.

However, the supervision of the Bank Mission was more focused on the implementation efforts of the Project Management Unit; leaving the interaction with the Government (Health Department) and other decision makers limited to only during wrap up meetings. There were many issues requiring active involvement and intervention of other departments of Government. Ideally widening of the scope of supervisory mission and involvement of the Government and key decision makers in regular review and appraisal could speed up the implementation of the time bound projects. The focus of Mission on the conformance to the commitments made by the State Government could have benefited in achieving the

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developmental objectives in its true spirit.

Overall Bank performance: The Bank's overall performance was satisfactory.

9.7 Recommendations to Ensure Sustainability:The Government of Maharashtra is fully committed to the reforms and many policy level decisions that have been already addressed thus paving way for sustaining the various reforms and innovations started under the project.

Optimum collection of user charges, with the exemption of poor people (BPL Patients)1.Internal Autonomy to the Hospitals for usage of revenue levied.2.Ensuring the maintenance of the standards at all the health care facilities by strengthening outsourcing 3.of non-clinical services, with adequate budgetary support.Ensuring continuation of eco-friendly practices in Waste Management and compliance to legal 4.mandate;Sustaining the quality of care through employee empowerment and decentralized decision-making and 5.addressing the issues emerged during annual patients staff satisfactions survey,evaluation of panel of experts. Ensuring right staff at the right place through timely appraisals and appointing specialists on contract 6.basis or sharing the specialist between district and sub-district hospitals to address mismatch.Providing adequate budget for drugs and essential supplies. 7.Exploring and enhancing the scope for private and public partnership.8.Better monitoring of performance of each hospital/facility with timely data analysis using GIS and 9.Web enabled HMIS. Grading and timely action to overcome the shortcomings/deficiency in service deliveryEnsuring better attendance of hospital staff through enforcement of disciplinary action against erring 10.staff.Ensuring appropriate budgetary allocations and its timely utilization by the hospitals.11.Keeping pace with technical advancement, through the regular continuing medical education session 12.and skill enhancing trainings for health care providers.Internalizing the service orientation and team building among the health care providers by replicating 13.the efforts put during the pilot implementation.Ensuring proper equipment maintenance through planed preventive maintenance (PPM) and immediate 14.breakdown repair of critical complex equipment either through CMC or ad-hoc maintenance.Finalizing the modality of maintaining the physical structure created under the project either through 15.regular PWD or by creation of dedicated in-house engineering wing.Enhancing the coverage to disadvantaged people by establishing service delivery linkage on regular 16.basis between sub-district hospitals and PHCs in tribal and hilly area.

9.8 Financial Achievement:At appraisal, the total project cost including contingencies was estimated at Rs.7475.8 million (US$ 158.1 million / SDR 97.9 million) of which IDA financing was estimated to be US$ 134 million. However, the World Bank cancelled the credit equivalent to SDR 12.2 million and SDR 11.938 million on July 21, 2003 and April 29, 2005 respectively. Thus the total cancellation amounted to US$ 34.857 million. As of date the available IDA Credit of SDR 73.762 million turned out to be equivalent to US$ 106.52 million rather than US$ 134 million as had been the case at the time of appraisal. As on date, about US $ 105.02 million has been disbursed, this is 98.59 percent of the revised allocation. The claims worth Rs. 339 million (equivalent to US$ 7.53 million) have been submitted to CAAA; for which disbursement is awaited. After reimbursement of these claims, the disbursement would be about US$ 106.52 million i.e. about 100 percent of the revised allocation.

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All the remaining project activities have been completed and the entire available credit has been utilized. The withdrawal applications for the balance credit of US$ 1.5 equivalent by 31 January 2006 will be submitted to the World Bank.

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Additional Annex 9. Additional Analysis of Health Sector Allocations

Additional Analysis of Health Sector Allocations and Quality and Effectiveness IndicatorsIncreased share of resources for the primary and secondary levels of health care in the total resources (plan and non-plan) allocated to the health sector: The share of health (including externally aided projects) in the state budget increased from 3.2% in 1999 to about 3.5% in 2000 and 4% in 2001. There was a subsequent decline to 3.6% in 2002, 3.16% in 2003, and a further decline to 3.14% in 2004 and 2.6% in 2005. In 2005-06, the share of health was about 3.38%. Total allocations to the health sector (Plan and Non-Plan) have increased from Rs. 12,966.1 million in 1999-00 to Rs. 20,138.7 million in 2005-06: this represents an increase of 64% in nominal terms over the project period. Of this, the share of the primary and secondary levels has remained steady at about 80%.

% Primary + Secondary Allocations to total Health Budget

77787980818283

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

Source: Budget at a Glance Document, GOM; relevant years.

Funding provided through MHSDP contributed about 10% of total health sector resources on average during the project period (see Table 1). If such funding were to be excluded from both the total Health Budget and from the allocation to primary and secondary levels, it appears that the total allocation to primary and secondary levels rose from about 79% in 1999-00 to 86.9%, 88.5%, 86.9% and 84.2% in the subsequent four years. It declined a little further to 80.3% in 2004-05 and was at 76.9% at the end of the project. This seems to indicate that MHSDP funds were an additionality, although there may have been some substitution for government funding towards the end of the project .

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Table 1: Contribution of MHSDP to Primary and Secondary Health Budget (in real terms)

Total

Health Total

Health Total

Pr.+Sec. Total

Pr.+Sec. MHSDP MHSDP

Pr.+Sec. as % of

T. Health

MHSDP as % of Pr.+Sec.

T. Health without MHSDP

Pr+Sec as % of

T. Health without

Nominal Real Nominal Real Nominal Real Real Real Real MHSDP

1999-00 12966.1 10342.5 670.0

2000-01 14805.5 14762.7 11767.9 11806.7 1176.0 1179.9 80.0 10.0 13582.8 86.9

2001-02 15947.9 15905.1 13023.5 12938.4 1293.0 1284.5 81.3 9.9 14620.6 88.5

2002-03 17182.4 16543.2 14132.9 13384.4 1210.0 1145.9 80.9 8.6 15397.3 86.9

2003-04 18575.2 18321.1 14858.7 13815.6 2047.0 1903.3 75.4 13.8 16417.8 84.2

2004-05 17504.9 17246.9 13838.5 12632.8 1665.0 1519.9 73.2 12.0 15726.9 80.3

2005-06 20138.7 19874.2 16116.7 14444.6 1224.2 1097.2 72.7 7.6 18777.0 76.9Source: Budget at a Glance Document, GOM; relevant years.

Adequate expenditures for drugs at least at the current estimated level of Rs. 8,800 per bed per year for drugs: Overall drug expenditure per bed per year has increased over the project period from Rs. 8,800 in 1999-00 to Rs. 9,445 in 2004-05. This covers the 3,175 new beds added under the project as well. It represents a nominal increase of about 7% per bed over the project period: as a comparison, the drug expenditure per bed per year in Andhra Pradesh in FY02 was Rs. 8,000, and in Orissa it is currently Rs. 7,974. MHSDP’s contribution to the drug budget increased gradually, until in 2003-04, Rs. 8,810 per bed per year out of Rs. 9,300 was contributed by the project. This later tapered off, and in 2005-06, the project contributed about 8% of the total budget. This covers all beds at the hospitals under the project. This again indicates that MHSDP funds substituted for state funds in the provision of drugs; however, the KPI specified only total expenditures on drugs, but not the source of funding. Increased availability of medicines is reflected in reduced out-of-pocket expenses for the purchase of medicines at project hospitals: Patient Satisfaction Surveys have found that average patient expenditure on medicine per illness episode reduced from Rs. 79.0 to Rs. 53.0 between 2003 and 2005.

8

.

MHSDP Contribution to Drug Allocation

0

2000

4000

6000

8000

10000

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

Drug budget per bed peryear

MHSDP Contribution

Source: MHSDP Status Report for the ICR and Review Mission; November 2005.

Overall availability of funds for non-salary expenditures appears to have increased between 1999-00 and 2005-06. Due to compliance with the recommendations of the 5th Pay Commission in 1997, salaries as a

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proportion of the total budget had increased to 65.7% in 1999-00. Subsequently, with an increase in total allocations to the health sector, and no further increase in salaries, this proportion began to decline and amounted to 45.4% in 2005-06. The budget for contingencies (see Table 2), including maintenance of buildings and equipment, and operation costs of vehicles (including ambulances), rose from 11.6% of the health budget in 1999 to a high of 15.8% in 2002; then declined to 11.7% in 2006. In nominal terms, there was a 57% increase in the budget for contingencies over the project period.v

Table 2: Contingency Budget 1999-2006

Year State Health Budget Budget for

Contingencies %

1999-2000 10342.51 1195.59 11.6

2000-2001 11767.89 1628.60 13.82001-2002 13023.46 2053.95 15.8

2002-2003 14132.92 1896.64 13.42003-2004 14858.65 1959.86 13.2

2004-2005 13838.52 1702.14 12.32005-2006 16116.68 1879.20 11.7

% Increase 155.8 157.2

Source: Budget at a Glance; relevant years. Implementation of a user charge policy in all project facilities: User charge collections have increased dramatically over the project period, from Rs. 14.9 million in 1999-00 to Rs. 281.9 million in 2004-05. District Hospitals (DH) continue to collect the bulk of user fees; however, the share of Other Hospitals (OH), Sub-Divisional Hospitals (SDH) and Community Health Centers (CHC) has increased from 19% of the total in 1999-00 to 31% in 2004-05.

Data indicates that the revenue generated through user charges has clearly increased non-salary recurrent expenditures. For example, prior to 2001, average monthly collections and expenditures at DHs amounted to about Rs. 1.12 million and Rs. 0.4 million respectively; with the rate increase in 2001, collections and expenditures rose to Rs. 3.19 million and Rs. 0.8 million respectively. This should increase substantially when the ban on expenditures is lifted after the completion of the investigation of allegations of misutilization of funds at two DHs.

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Table 3: Proportion of Exempted Patients of Monthly Inflow of Patients

Paying pre2001*

Exempted pre2001

Total % Exempted of total

Paying post-2001**

Exempted post-2001

Total % Exempted of total

District Hosp. 55994 10405 66399 15.7 57817 11700 69517 16.8SDH-100 16209 4322 20531 21 18733 4212 22945 18.3SDH-50 25595 3815 29410 13 21518 5710 27228 21CHC-PIs 80016 15171 95187 16 98069 21623 119692 18Total 176036 33377 209413 16 215751 47570 263321 18

* Period from October 1999-July 2001** Period from August 2001 to December 2004Source: Data generated from various records maintained at the hospital (TISS, 2005).

The levying of user charges appears not to have had a negative impact on utilization of services. Overall, the monthly utilization by paying patients increased from 0.17 million to 0.21 million (22.5% increase) after the rate increase in 2001; and monthly utilization by exempted patients increased from 33,377 to 47,570 (42.5% increase). In the case of tribals, the increase among paying patients was much greater (73.6%) than among exempted patients (11.8%). This could partly be due to poor health seeking behavior among the poorer and more marginalized tribal groups who would be eligible for exemption from user charges. The proportion of exempted patients availing of services increased at all types of facilities except SDH-100; and overall there was an increase in use by exempted patients from 16% to 18%.

Indicators of Increased Quality and Effectiveness of Services

Increase in Diagnostic Tests. Since data on laboratory investigations has not been maintained separately for in-patients and out-patients, calculating the increase specifically for in-patients is not possible. However, there has been a substantial increase in investigations overall: laboratory investigations and X-rays had increased by 39% and 9% over the baseline respectively at the mid-term and by 68% and 48% respectively by the end of the project – this far exceeds the KPI on laboratory investigations.

Table 4: Increase in Diagnostic Tests at Project Hospitals

1999 2000 2001 2002 2003 2004 2005 % Increase at MTR

% Increase at EOP*

Lab Tests 2597225 4329490 4720737 3615383 3876502 4254043 4365361 139.2 168X-rays 291626 293352 362087 319829 312812 355459 431696 109.7 148

Source: Revalidated Hospital Activity Information.*EOP = end of project.

There are variations between levels of hospitals in the use of diagnostic tests; for example, at SDH-50, there has been a steady decline in laboratory investigations due to the increasing use of syndromic management for RTI/STI, malaria etc. Declines in 2002/2003 were largely due to disruption in services during the re-commissioning of hospitals. Utilization of X-ray has also been influenced by the provision of

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ultrasound technology at all hospitals.

Increase in Major Surgeries

Table 5: Increase in Major Surgeries at Project Hospitals

Major Surgeries 1999 2000 2001 2002 2003 2004 2005

% Increase over Baseline

Dist.Hospitals 38364 64883 64440 82941 89873 94652 100410 261.7 Other Hospitals 5978 9537 7504 9196 9986 8759 8788 147 Sub-Dist Hosp.(100 Beds) 3622 7072 6430 14014 21344 19244 23928 660.6 Sub-Dist Hosp.(50 Beds) 13320 13896 15583 24717 23297 26715 39931 299.7 CHC-PI 5610 10892 8486 14943 20272 19753 24024 428.2 Total 66894 106280 102443 145811 164772 169123 197081 294.6

Source: Revalidated Hospital Activity Information.

The number of major surgeries conducted at project facilities has increased from 66,894 in 1999 to 197,081 in 2005 – a three-fold increase. The increase has been consistent across all levels of hospitals; and is an indication of the increased access to such specialist services even at lower level facilities.

Bed occupancy rates (BOR) have increased from an average of 51% at baseline to about 77% at the end of project; with DH and OH averaging greater than 80%. Occupancy varies between levels of facilities due to: (i) increase in number of beds, particularly at SDH-100 and SDH-50; and (ii) variable case mix, with lower level hospitals having a greater number of same day or short stay patients. This compares well with BOR of 85% in Hong Kong (2001), 73% in Singapore (2002); and is higher than in the Netherlands at 65.7% (2000); and Iran at 57.4% (2000).

The project has contributed to the overall availability of beds. In Maharashtra, there were 119,927 beds in 1999, including beds at the primary, secondary and tertiary levels of care in the government sector, and private sector beds. This amounts to about 1.2 beds per 1,000 population. This increased by 20,547 beds to 140,474 beds in 2005 or about 1.4 beds per 1,000 population. As a comparison, Pakistan had 0.64 beds per 1,000 population (2001), Sri Lanka had 2.9 beds (2000) and Nepal had 0.19 (1997). Of this, about 15% are at the first referral/secondary level. The 3,175 beds contributed by the project constitute about 15% of the overall increase in beds. While the number of beds at the tertiary level also increased (by 5,753 additional beds), it cannot be concluded that this constitutes a diversion of government funds from the primary and secondary to the tertiary level, since government allocations to the primary and secondary levels of care initially increased in real terms and thereafter declined only marginally towards the end of the project.

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Table 6: Comparative profile of beds according to health facilities during 1999 and 2006 - Maharashtra

1999 2006 Addition Sector Facilities a bc = (a - b)

PHC 10170 10884 714Primary Dispenseries 1688 1688 0

CHC 8972

SDH 50 0First referral SDH 100 0 14530 5558

Secondary DH 7035 7518 483

Tertiary Medical College 21123 26876 5753

Private Pvt. (Estimated) 70939 78978 8039

Total 119927 140474 20547

Taking data for 2005, with 988,377 in-patients at project hospitals and an average length of stay (ALOS) of about 3.46 days (see below), this amounts to about 3.42 million cumulative in-patient days or 34 in-patient days per 1,000 population. However, project hospitals constitute only about 15% of all beds available in the state; if similar BOR and ALOS were applied to all hospitals beds in the state, it would yield a figure of 226 in-patient days per 1,000 population in 2005. In Iran, the rate was 68.3 in-patients per 1,000 population (2000). Comparative numbers for Australia are 300 in-patient days per 1,000 population, 440 for Singapore; and 998 for Hong Kong. Given that the age profile in Maharashtra, as in the rest of India, is relatively young, lower levels of hospitalization are to be expected. In addition, the epidemiological profile still exhibits a large proportion of communicable diseases and relatively lower incidence of chronic conditions requiring long-term care, resulting in less hospitalization. Finally, socio-cultural factors such as poverty and lower literacy rates act as barriers to health seeking behavior.

ALOS has declined from 12 days at baseline to 3.46 days at the end of the project – this compares well with experience in Israel and elsewhere, with ALOS of about 4.5 days. The monitoring and tracking of ALOS by the MHSDP is an important step towards monitoring the efficiency of the hospital system; further refinement is necessary in terms of looking at the case mix, and reporting separately for each clinical area so as to ensure that quality of care is not being sacrificed in the interests of keeping the ALOS low.

Additional quality and effectiveness indicators have been tracked by the project. Number of out-patients per in-patient bed day, and number of out-patients per physician per year appear to have remained quite steady through the project period, with marginal increases. Admissions during the casualty period went up substantially from 333,517 at baseline to 505,109 in 2005 – a 50% increase. The nosocomial infection rate is low at an average of about 1.5% across all hospitals.

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Table 7: Selected additional Quality and Effectiveness Indicators

• Number of outpatients per inpatient bed day

Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06-

OP per Bed - - 1.73 2.11 2.08 1.70 1.76 1.39 1.85

• Number of outpatients per physician per year.

Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

OP per Phys per year - - 7478 6788 7625 7568 7845 7524

• Admissions during the casuality period Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Admn. during casualty - - 0 333517 355018 366168 408566 446478 505109

• Number of inpatients acquiring infection during hospital stay

Hospital 2004 2005 upto July

DH 0.49 2.21

OH&SDH (100) 1.53 1.09

SDH (50) 2.24 2.3

CHC 0.22 0

Comparison between project and non-project hospitals reveals that project hospitals have performed much better on all performance measures. The difference in mean performance between a small sample of project and non-project hospitals is quite substantial. Table 9 shows that in 2005, on average, project hospitals in the sample had 82% more OPD and 46% more in-patients than non-project hospitals. 31% more deliveries and 68% more surgeries were conducted at project hospitals; and the BOR on average was about 55% at project hospitals as compared to 31% at non-project hospitals, a 56% difference.

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Table 8: Difference in Mean Performance: Project and Non-Project Hospitals*

Project and Non-Project Hospitals

Project Mean

Non-Project Mean

% Difference

OPD 26312.5 21665 82.3IPD 4230 1947.5 46

Deliveries 355.7 110.2 31Major Surgeries 299.7 204.5 68.2

BOR 55 31 56.4

* Analysis is based on data from a comparison of a small sampe of 5 project and non-project hospitals conducted by Dr. Bhale Rao, Panelist; commissioned by MHSDP.

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