The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345) REPORT NO.: RES60505 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SUPPORTING EFFECTIVE UNIVERSAL HEALTH COVERAGE IN ARGENTINA APPROVED ON MAY 18, 2018 TO ARGENTINE REPUBLIC HEALTH, NUTRITION & POPULATION LATIN AMERICA AND CARIBBEAN Regional Vice President: Carlos Felipe Jaramillo Country Director: Marianne Fay Regional Director: Jaime Saavedra Practice Manager/Manager: Tania Dmytraczenko Task Team Leader(s): Vanina Camporeale, Marvin Ploetz The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345) I. BASIC DATA Product Information Project ID Financing Instrument P163345 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 18-May-2018 30-Nov-2024 Organizations Borrower Responsible Agency Argentine Republic National Ministry of Health Project Development Objective (PDO) Original PDO The Development Objective of the proposed Project would be to: (i) increase effective and equitable coverage of key health services provided to the eligible population; and (ii) increase the institutional capacity of the MSN and MSPs to implement mechanisms for an integrated delivery system. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-92220 30-Mar-2021 21-Jul-2021 26-Aug-2021 30-Nov-2024 250.00 250.00 0 IBRD-88530 18-May-2018 17-Dec-2018 17-Dec-2018 30-Nov-2024 300.00 254.97 45.03 The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Project Status 1. Progress towards achievement of the Project’s Development Objectives (PDO) is Satisfactory. As recorded in the last Implementation Status Report (ISR) archived in February 2024, the Project is on track to achieve or surpass all three PDO indicators by the current closing date. The second PDO indicator (Percentage of eligible adults with hypertension that are diagnosed in the regions with the poorest health outcomes) reached 21.5 percent in August 2023 (last measurement), surpassing the end target of 18 percent. Similarly, the third PDO indicator (Percentage of the eligible population enrolled and assigned to a health facility for continuous care) reached 12 percent (December 2023), thereby achieving its End-of-Project target. The first PDO indicator (Percentage of eligible population with effective health coverage) stood at 33.0 percent (December 2003), corresponding to 94.3 percent of the End-of- Project target. 2. Implementation Progress is Moderately Satisfactory. There has been partial progress in the Project's implementation, with six of the 10 end-targets for the Project’s intermediate results indicators having either been achieved or surpassed. Progress under Component 1 (financing results-based capitation payments to improve equitable coverage to quality healthcare services) has been satisfactory. Overall health service coverage has rebounded after the negative repercussions of the COVID-19 pandemic. In contrast, the procurement of goods and services under Component 2 (financing activities and trainings aimed at improving coordination and establishing an integrated quality-based model of care within the public health subsystem) have experienced delays, resulting in the prior extension of the Project’s closing date from December 31, 2023 to April 30, 2024. In early April 2024, the newly appointed National Ministry of Health (Ministerio de Salud de la Nación, MSN) authorities reassessed the Project and its activities to ensure alignment with their sectoral strategy and action plan. Based on the assessment, the authorities decided to request an extension of the Project for the implementation of the prioritized IT services and consultancies to i) improve the interoperability of health information systems, ii) reinforce information security for optimal data use, and iii) complete the procurement and delivery of goods needed to increase the population’s access to health services. 3. Disbursements. As of April 2024, the Project has disbursed 92 percent (US$ 505 million) of the loan proceeds (US$550 million). The US$45 million undisbursed amount is assigned to the procurement of goods and services under Component 2 and 15 percent of that amount remains undisbursed. The Additional Financing (Loan 9222-AR) only financed Component 1 and has been fully advanced. 4. Project Management. Project Management performance is Moderately Satisfactory, considering the delays in the planning and execution of activities under Component 2 that caused the prior Project’s extension (from December 2023 to April 2024). The Project Implementation Unit is fully staffed with the requisite personnel and the Project remains in compliance with the legal covenants. Procurement performance is rated Moderately Unsatisfactory due to delays in the execution of procurement processes. Safeguards performance is considered Satisfactory and Financial The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345) Management performance is rated Moderately Satisfactory. The 2022 audit report was submitted to the Bank on September 11, 2023 and received an unqualified opinion. The Project has no overdue audits nor ones that are not satisfactory to the Bank. B. Rationale for Restructuring 5. The proposed extension is necessary to ensure the completion of critical activities prioritized by the new government. These activities relate to the interoperability of health information systems, information security for optimal data use, and the delivery of goods needed to increase the population’s access to health services. The proposed extension would also contribute to the transition of World Bank support from investment financing to the new Program for Results (PforR) operation (P179595), approved by the Board on June 27, 2023 and declared effective on September 20, 2023. This PforR will support the Ministry of Health in implementing results-based capitation payments using country systems and does not include a technical assistance. The goods and services to be procured under Component 2 are needed for a smooth transition towards the new PforR. Finally, the proposed extension would allow for capitation payments for the first two trimesters of 2024 under Category 1 (Capitation payments under Subcomponent 1.1.) and Category 2 (Capitation payments under Subcomponent 1.2.). Due to the requisite auditing reviews, the documentation of these capitation payments would be completed during the last three months of the extended Project. DESCRIPTION OF PROPOSED CHANGES 6. The proposed Level-II Restructuring will: (a) extend the closing date under both legal agreements by 7 months, from April 30, 2024 to November 30, 2024; (b) reallocate funds among disbursement categories; and (c) change the domestic and external co-financing shares for capitation payments for the General Health Services (GHSs) and High- Complexity Disease Interventions (HCDIs). The changes in the co-financing shares of capitation payments are proposed to apply retroactively to capitation payments covering the period since January 1, 2024. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Dec-2023, 30-Apr- IBRD-88530 Effective 31-Dec-2022 30-Nov-2024 31-Mar-2025 2024, 30-Nov-2024 30-Apr-2024, 30-Nov- IBRD-92220 Effective 31-Dec-2023 30-Nov-2024 31-Mar-2025 2024 The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345) REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IBRD- DISB - GOODS 27,437,200.00 9,971,599.34 30,737,200.00 100.00 100.00 88530-001 Currency: USD CS, NON-CS, TR 61,460,849.00 18,089,333.91 31,460,849.00 100.00 100.00 Capitation Pymts under 184,795,493.00 188,194,511.77 212,495,493.00 85.00 100 Part 1.1 Capitation Pymts under 21,100,000.00 22,104,024.83 24,400,000.00 65.00 100 Part 1.2 OP 4,456,458.00 84,512.25 156,458.00 100.00 100.00 PREMIUM FOR 0.00 0.00 0.00 CAPS/COLLARS FRONT END FEE 750,000.00 750,000.00 750,000.00 Total 300,000,000.00 239,193,982.10 300,000,000.00 IBRD- Capitation 92220-001 Payments-Part 215,375,000.00 166,894,285.87 215,375,000.00 70.00 100 Currency: 1.1 USD Capitation Payments-Part 34,000,000.00 35,740,224.49 34,000,000.00 65.00 100 1.2 PREMIUM FOR 0.00 0.00 0.00 CAPS/COLLARS FRONT END FEE 625,000.00 625,000.00 625,000.00 Total 250,000,000.00 203,259,510.36 250,000,000.00 The World Bank Supporting Effective Universal Health Coverage in Argentina (P163345)