The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) Program Information Document (PID) Concept Stage | Date Prepared/Updated: 02-Nov-2022 | Report No: PIDC270880 Oct 19, 2022 Page 1 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) BASIC INFORMATION A. Basic Program Data OPS TABLE Country Project ID Parent Project ID (if any) Program Name Argentina P179595 Program for Effective Universal Health Coverage and National Health System Integration Does this operation Region Estimated Appraisal Date Estimated Board Date have an IPF component? LATIN AMERICA AND 19-Apr-2023 16-Jun-2023 No CARIBBEAN Financing Instrument Borrower(s) Implementing Agency Practice Area (Lead) Program-for-Results Argentine Republic National Ministry of Health Health, Nutrition & Financing Population Proposed Program Development Objective(s) To support improvements in: (i) the effective and equitable access to public health services, and (ii) the efficiency of the health system. COST & FINANCING FIN_SRC_TABLE1 SUMMARY (USD Millions) Government program Cost 2,600.00 Total Operation Cost 300.00 Total Program Cost 299.25 Other Cost 0.75 Total Financing 300.00 Financing Gap 0.00 FINANCING (USD Millions) Total World Bank Group Financing 300.00 World Bank Lending 300.00 Oct 19, 2022 Page 2 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) Concept Review Decision The review did authorize the preparation to continue B. Introduction and Context Country Context 1. Argentina, with a gross domestic product (GDP) of US$491 billion, was the third-largest economy in Latin America in 2021. The country has a large territory of 2.8 million square kilometers, and its population of about 45 million inhabitants is highly urbanized with 89 percent of the total population living in cities. The Buenos Aires Metropolitan Area (AMBA) alone constitutes 33 percent of the national population and generates more than 40 percent of Argentina’s GDP. 2. The middle class has historically been large and strong, with social indicators generally above the regional average; however, persistent social inequalities, economic volatility, and underinvestment have limited the country’s development. The rate of urban poverty reached 37.3 percent in the second semester of 2021, and 8.2 percent of Argentines live in extreme poverty. Childhood poverty, for those under 15 years old, is at 51.4 percent. The high frequency of economic crises in recent decades—the economy has been in recessions during 21 of the past 50 years—has resulted in an average annual growth rate of 1.8 percent, well below the world average of 3.6 percent and the region’s average of 3.2 percent. 3. Bolstered by favorable external conditions, the economy recovered from the COVID-19 crisis at a fast pace, reaching pre-pandemic activity levels by mid-2021. Argentina’s economy grew by 10.3 percent in 2021. Higher commodity prices and trading partners’ growth, notably Brazil’s, combined with public investment led to a robust growth recovery. However, since end-2021, increasing macro imbalances and a more turbulent global context, started to slow down the pace of GDP growth. The Government of Argentina has concluded the process of restructuring its debt in foreign currency (both local and external) with private creditors, significantly improving the maturity profile for the next five to eight years. However, debt service obligations as of 2028 are projected to be equivalent to those that triggered the debt swap in 2020-2021. 4. By March-2022, Argentine authorities have reached an agreement with the International Monetary Fund, on an Extended Fund Facility (EFF) program for a period of 30 months and an amount of US$45 billion, to address the economy’s macroeconomic imbalances and set the basis for sustainable growth. This amount will cover the remaining obligations under the 2018 Stand-By Arrangement (US$40.5 billion) and already provided a small net financing support for reserves accumulation (US$4.5 billion). According to the memorandum of economic and financial policies, the EFF will support the government’s objectives of (i) improving public finances in a gradual and sustainable manner to ensure debt sustainability without jeopardizing the economic recover; (ii) durably reduce persistent high inflation, through a multi-pronged strategy; (iii) strengthening the balance of payments, and (iv) improving the sustainability and resilience of growth. Accordingly, the memorandum sets a gradual fiscal consolidation path toward a zero primary deficit in 2025 (2.5 percent of GDP in 2022, 1.9 percent in 2023, and 0.9 percent in 2024), a reduction of monetary financing of the deficit (eliminated by 2024), and the framework for monetary policy involving positive real interest rates, as part of a strategy to fight inflation. 5. On October 7th 2022, the Second Review of the EFF program has been approved by the IMF Executive Board, Oct 19, 2022 Page 3 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) allowing for an immediate disbursement of US$3.8bn. All quantitative program targets of the second quarter 2022 (end-June) were met, except for the floor on net international reserves. According to the IMF statement, decisive actions by the new economic team have been critical to stabilizing markets and to begin rebuilding confidence. In addition, the IMF pointed out that relevant end-September targets were met, too (including floor for net international reserves mentioned above as well as ceiling on monetary financing of the fiscal deficit). The program key targets remain unchanged over the period 2022 and 2023, although near-term quarterly targets are slightly modified to adjust for high than projected inflation. The IMF Board also approved waivers of non- observance for the continuous performance criteria relating to exchange restrictions and multiple currency practices, as the soy differential FX rate contravenes the Fund´s policy on Multiple Currency Practices. However, downside risks are elevated. Despite increasing terms of trade, capital controls and deficit monetization cause a large gap between the official and parallel exchange rate and limit foreign reserve accumulation. Inflation accelerated to historically high levels (82 percent yoy, as of September), denting purchasing power. While the gradual fiscal consolidation targets set by the IMF program were met, a still sizable fiscal deficit crowds out private investment and puts pressure on monetary policy. Moreover, potential global effects caused by a protracted war in Ukraine -which increases the cost of imported energy- could hamper the fiscal consolidation program. Sectoral (or multi-sectoral) and Institutional Context of the Program 6. Argentina’s health outcomes have improved significantly during the past decades, especially for maternal and child health indicators and to a more limited extent for non-communicable diseases (NCDs). Improvements in life expectancy also reflect better access to healthcare services: between 2005 and 2018, the percentage of women aged 25-65 years receiving cervical cancer screening rose from 60.6% to 70.3%, and the percentage of adults having a high blood pressure control test rose from 78.7% to 84.3%.1 In addition, some health outcomes have become more equal: the gap between the average infant mortality rate (IMR) between the poorer Northern provinces and other provinces narrowed from 4.5 in 2010 live births to 3.0 in 2020. 7. Despite improvements, health outcomes in Argentina are poorer than in comparator countries with similar or lower income and health spending levels, pointing to the low overall efficiency of health spending. According to the World Health Organization (WHO) Global Health Expenditure Data, in 2018 the total expenditure on health in Argentina represented ten percent of GDP, being the second largest health expenditure in the Latin America and Caribbean Region (by far exceeding the average share among upper middle-income countries of 6.8 percent.2 Countries such as Costa Rica and Uruguay also fare better in terms of key health outcomes, including those that are good indicators of health system effectiveness such as IMR and age-standardized mortality rate related to NCDs. 8. The health system’s lower efficiency and remaining inequality are partially the result of its highly fragmented and decentralized nature. The country has three health subsystems: non-contributory public, social security, and private, and as a result, the access to effective and quality health care services depends on an individual’s income level, type of health coverage and place of residence. The non-contributory subsystem offers services to all Argentines, but it is mainly used by people without formal employment and thus without social security or private insurance coverage. The social security subsystem covers the population in the formal employment sector. This subsystem is composed of about 300 national Obras Sociales (OS) linked to different unions; 24 provincial OS, which insure provincial and municipal public employees; an OS that ensures retirees and 1 Data source: National Risk Factor Surveys from 2005 and 2018 (the latest available edition). 2 https://www.who.int/publications/i/item/9789240017788 Oct 19, 2022 Page 4 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) pensioners (National Institute of Social Services for Retirees and Pensioners, INSSJyP, also known as PAMI), and other smaller OS. In addition, there is a private insurance market covering about 14 percent of the population. Furthermore, service delivery networks are also fragmented across and within subsystems: public service delivery is decentralized to the provincial level and in some cases (the provinces of Buenos Aires, Santa Fe and Córdoba for instance) to the municipal level. Since there are limited coordination and redistribution mechanisms, the system’s structure also results in large inequalities; for instance, with respect to coverage for preventive and chronic care. Finally, there are significant inequities across geographical regions, with the provinces in the Northeast and Northwest regions having the poorest health outcomes and the lowest rates of effective coverage for key services. 9. The fragmentation results in poor quality of care, inefficient use of resources (e.g., duplication of tests, drugs, supplies), limited access to care, and inequality in service provision. Quality health services require a high degree of coordination across and within levels of care; particularly services for the control of NCDs. Often providers belong to different jurisdictions or institutions which makes this coordination challenging. Even within the same level of government or governance structure, coordination among providers is often difficult in many health systems as a result of weaknesses in information systems; lack of clear roles and responsibilities; and mismatched laws, funding, regulations and training.3 10. At the same time, Argentina is facing a rapid demographic and epidemiological transition, exacerbating the pressure on the health system to adjust its service delivery model. NCDs have become the main causes of death and disability. According to the Global Burden of Disease Study for 2019, the main causes of Disability-adjusted Life Years (DALYs) lost in Argentina were ischemic heart disease, lower respiratory infection, stoke, other musculoskeletal disorders, and diabetes (IHME, 2019). The health system still needs to fully adjust to this reality and the need for continuous follow-up care. For example, only 21 percent of patients with public health coverage and at general cardiovascular risk had at least one control visit during the last year.4 11. The combined effects of the COVID-19 pandemic and the economic recession have put an additional burden on Argentina's public health system due to the growing uninsured population. The population relying exclusively on the public subsystem, including almost 60 percent of the poor and about three�fourths of the extreme poor, accounted for 42 percent of the population in July 2022,5 compared to 35 percent in 2019. At the same time, the COVID-19 pandemic and needed response measures (i.e., lockdowns and the minimization of social contacts) disrupted the provision of essential health services. For instance, colon cancer screening rates in 2020 decreased 47 percent compared to 2019 and general outpatient consultations dropped 26 percent during the first quarter of 2020.6 12. Despite its limited stewardship in a fragmented system, the National Ministry of Health (MSN) has managed to promote Universal Health Coverage (UHC) in this complex context and has led initiatives to address the fragmentation and organizational problems of the health system, but significant challenges remain. On the one hand, the number of people with effective health coverage under the Sumar program increased by about 20 percent, from around five million people before the pandemic to six million people in mid-2022. Given the increased demand for services in the public health system, additional effective and equitable coverage of key quality health services and continuous NCD-related care is still crucially needed. In addition, emerging and re- 3 http://www.metaballcreative.com/INT001/pdf/HCPolicySupplement.pdf#page=14; https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2653966/ 4 Information provided by Redes Program. 5 Based on the registry of beneficiaries of the Sumar program and preliminary results from the 2022 census [INDEC]. 6 Information provided by Sumar and Proteger Programs. Oct 19, 2022 Page 5 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) emerging challenges and needs (in particular, after the COVID-19 pandemic) related to mental health, Gender- based Violence (GBV), and a better consideration of gender and diversity aspects in public health care provision have become prevalent. Also, the described inequities in access and quality of services delivered, the lack of an integrated health care and people-centered delivery system (for NCDs and mental healthcare), and the need for a consolidated integrated benefit package across subsystems require deeper reforms of the health system. 13. In response to these challenges and building on its successful experiences, the MSN has adopted the National Integrated Health Plan (NIHP) for 2023-2027.7 Its objectives are: (i) to increase effective and equitable coverage of prioritized quality health services in the public subsystem; (ii) to improve the integration and continuity of healthcare by strengthening health service networks; (iii) to support the integration and coordination between the public, private and social security subsystems (for instance, through the progressive harmonization of the health services packages) and; (iv) to promote a more efficient procurement of drugs and health technologies. 14. To support the NIHP, the Government has requested World Bank (WB) financing for a Program for Results (PforR), building on successful ongoing Bank-supported initiatives such as the Sumar program. The use of financial incentives to strengthen the MSN’s stewardship role in the healthcare system – building upon mechanisms already being implemented under ongoing WB-supported programs8 – would be key under the PforR as well and other ongoing programs9 would also build a complementary basis for the NIHP’s implementation. Relationship to CAS/CPF 15. The Program contributes to the WB’s Twin Goals of reducing poverty and promoting shared prosperity by improving access and quality of health services to the population not covered by social health insurance; the population more likely to be poor. It also contributes to equity by ensuring the harmonization/coordination of the health system. 16. The proposed Program is aligned with WB FY19-22 Country Partnership Framework (CPF)10 for the Argentine Republic discussed by the Executive Directors on April 25, 2019 and revised by the Performance and Learning Review (PLR)11 on May 24, 2022. It supports the CPF focus area 2 “Strengthening Service Delivery to Protect the Poor and Vulnerable�. Specifically, it would contribute to Objective 4 “improving access to basic service delivery in vulnerable areas�, by expanding access to a basic package of health services and to a package of high complexity and high-cost services. Additionally, the Program contributes to objective 5, “improving human capital of vulnerable populations�, by not only strengthening access to services, but also improving the quality of the services provided. Finally, the Program is also well aligned with Objective 6 of this focus area, “improving governance and transparency�, by contributing to a better coordination/harmonization across levels of care and across the different health subsystems (i.e., social security, public, and private); and by supporting activities aimed at institutionalizing performance-based financing mechanisms to the provinces and health providers that have 7 Plan Nacional Integrado de Salud 2023 - 2027. 8 Supported first by the WB Plan Nacer I (USD135 million) and Plan Nacer II (USD300 million), Provincial Public Health Insurance Development Project, The Sumar I Program (P106735 - USD600 million) –all already closed– and then Effective UHC Project (P163345 – USD550 million) now under implementation, supporting the Sumar II Program, closing on December 31, 2023. 9 Including: (i) the Protecting Vulnerable People against NCDs or “Proteger� Project (USD350 million – P133193), supported by the WB, closing on November 30,2022, and (ii) other national programs such as Redes and REMEDIAR. 10 Report No. 131971-AR, World Bank. 11 Report No. 170668-AR, World Bank. Oct 19, 2022 Page 6 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) been previously supported by WB financed projects. Rationale for Bank Engagement and Choice of Financing Instrument 17. The proposed Program directly contributes to Argentina’s health sector goals and the Government’s NIHP. Accordingly, the PforR instrument is appropriate for the proposed operation, since it will support a broader Government’s program. In addition Argentina has sound institutions and procedures (recently a PforR was approved in the water sector12 and there is another under implementation in the education sector in Argentina13) and the PforR would (i) effectively support the MSN’s plan to institutionalize functions developed under WB Projects and improve its stewardship in the health sector by linking disbursements to achievement of results that are tangible, transparent, and verifiable, and (ii) allow for improvements in the implementation of the MSN’s own technical, fiduciary, and safeguard systems. 18. The proposed PforR builds on the extensive engagement of the WB in the health sector in Argentina over the last 17 years, comprising both lending and technical assistance. In particular, the Program would build on the design and lessons learned from the implementation of the Sumar Program (and it predecessors) and the Proteger Project. Both Projects implemented result-based financing from the MSN to the provinces and health providers. While the Sumar program implemented result-based financing mechanisms at the provincial and health care provider levels to improve effective access and quality for a package of prioritized health services for the eligible population through; the Proteger Project implemented transfer-linked indicators from the MSN to Provincial Ministries of Health (MPS) for improving the readiness of public health facilities to deliver higher quality NCD-services for vulnerable population groups and expanding the scope of selected services. The financial management of transfers from the MSN to provinces based on achieved results as well as the calculation and verification of these results has been so far implemented based on WB procedures under different WB projects, and now the Government’s program will institutionalize these processes. Based on the experience of having supported Project implementation, the WB team will be able to support the MSN in this important step. In addition, the support of the WB will help ensure that important lessons about the implementation of the results- based financing scheme will be reflected in the design and implementation of the Program that fully relies on national systems. C. Program Development Objective(s) (PDO) and PDO Level Results Indicators Program Development Objective(s) To support improvements in: (i) the effective and equitable access to public health services, and (ii) the efficiency of the health system. PDO Level Results Indicators The proposed PDO indicators are directly associated with the Program’s development objectives: (i) For effective and equitable access: Percentage of eligible population with effective health coverage. (ii) For quality: Percentage of health care facilities evaluated and certified to provide high quality healthcare services. 12 Buenos Aires Water Supply and Sanitation with a Focus on Vulnerable Areas Program (P172689). 13 Improving Inclusion in Secondary and Higher Education (P168911). Oct 19, 2022 Page 7 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) (iii) For quality (in its integration dimension): Percentage of patients under network management (for a selected line of care) or reference and counter-reference indicator or patient/family satisfaction indicator (survey) (iv) For efficiency: Percentage of cost savings through centralized purchasing of medicines. (v) For efficiency: Percentage of public health facilities billing social security institutions. D. Program Description PforR Program Boundary 19. The proposed PforR would support four out of five domains of the Government’s NIHP 2023-2027 over the three-year period of 2023-2025. The NIHP’s objectives are organized around five domains: (D1) equitable access, (D2) quality of care, (D3) efficiency, (D4) integration of health subsystems and service delivery networks, and (D5) intelligent data analysis for decision making, each of them defined by strategic lines and activities. To this end, the proposed PforR would be structured around three RA related to equitable access, quality of care, and efficiency through coordination and integration of the health system, contributing to the four domains of the NIHP as follows: Result area 1: Increased effective and equitable access to health services. This RA would seek to increase effective and equitable coverage of key health services with quality and efficiency standards and relates to D1 (equitable access) of the Government’s program. This RA would support the strengthening of MSN and MSPs in their functions of purchasing a package of health services through the consolidation of transfer mechanisms and new payment modalities (including results-based schemes), and improved access to essential medicines, among others. Result area 2: Improvements of the quality of care (and, in particular, the integration dimension) in the public subsector. This RA would support the Government in the implementation of measures aimed at improving the quality and integration of care. It is related to D2 (quality) and D4 (integration). Activities include under this RA are the evaluation and certification of health facilities according to quality standards designed by the MSN, training of health care workers in mental health, GBV and diversity, the adoption and implementation of an integrated pediatric cancer network, and the development and implementation of interoperability standards to share clinical information between health providers. Result area 3: Efficiency enhancements through the coordination and integration of health subsystems . This RA, related to D3 (efficiency) and D4 (integration) of the Government’s program, would support coordination between different health subsystems to enhance efficiency. Among other activities, it would include actions to design and implement an integrated benefit package with protocols and standards of care, promote improvements in the capacity of public health facilities to bill social security entities, and support capacity development for the centralized purchasing of high-price drugs. E. Initial Environmental and Social Screening 20. The WB will carry out an Environment and Social Systems Assessment (ESSA) as per the WB Policy - Program- for-Results Financing (OPS 5.04-POL 107). The ESSA will provide a comprehensive review of relevant government systems and procedures that address environmental and social issues associated with the Program. The ESSA will describe the extent to which the applicable government environmental and social policies, legislation, program procedures and institutional systems are consistent with the core principles of OPS 5.04-POL 107. Finally, the ESSA will include recommendations and Program Action Plans to address the gaps and to enhance performance during Oct 19, 2022 Page 8 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) Program implementation. Based on the preliminary definition of PforR boundaries, the proposed PforR will support four out of five domains of the Government’s NHIP 2023-2027 over the three-year period of 2023 -2025 as defined under the PforR Program Boundary above. The Program is not expected to contain activities that should be excluded from PforR as established in the WB Policy. 21. For the ESSA, the WB team will review the environmental and social systems that are relevant to the Program. The WB team will also address the coordination of public policies with the spatial distribution of the population in the territory associated with natural environments and the capacity of the health establishments that implement the accompaniment route to prepare, face and adapt to the impacts of natural disasters, economic crises, pandemics and Climate Change, gender gaps (if any), and access to health services by vulnerable groups (for example, scattered rural communities, people with various disability conditions, ethnic groups, indigenous peoples, and migrants). Consultations, virtual and telephone interviews will be conducted with key stakeholders or representatives in the preparation of the ESSA. Draft of ESSA will also be available at the Government of Argentina website for public consultation with the Program stakeholders and subsequent review, prior Program’s Appraisal. The final version of the ESSA will be disclosed at WB website after it is published in the MSN website. . CONTACT POINT World Bank Name : Vanina Camporeale Designation : Senior Operations Officer Role : Team Leader(ADM Responsible) Telephone No : 5260+3675 / Email : vcamporeale@worldbank.org Name : Maria Eugenia Bonilla-Chacin Designation : Program Leader Role : Team Leader Telephone No : 5260+3626 / Email : mbonillachacin@worldbank.org Name : Marvin Ploetz Designation : Senior Economist Role : Team Leader Telephone No : 202-458-1705 Email : mploetz@worldbank.org Borrower/Client/Recipient Borrower : Argentine Republic Contact : Title : Telephone No : Email : Implementing Agencies Oct 19, 2022 Page 9 of 10 The World Bank Program for Effective Universal Health Coverage and National Health System Integration (P179595) Implementing National Ministry of Health Agency : Secretary of Administrative Contact : Mr. Mauricio Monsalvo Title : Management Telephone No : 541150161300 Email : mmonsalvo@msal.gov.ar FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects Oct 19, 2022 Page 10 of 10