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Republic of Armenia
Ministry of Health

OPERATIONAL MANUAL
HEALTH SYSTEM MODERNIZATION PROJECT-2

Jan 10, 2010

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INTRODUCTION
The Health Systems Modernization Project is a two phased Adaptable Lending
Program
(APL) to be implemented over a period of approximately eight years. The
rationale behind the Health System Modernization Project is support the
reform of the health sector in Armenia in the three main areas:
development of primary health care, hospital optimization and
strengthening of the government institutional capacities.
The first phase (APL1)
—the ongoing Health System Modernization Project (Credit
Agreement # 3920 and PHRD Grant Agreement # 05436 TF) started in December
2004 and is expected to end in December 2008. The second phase (APL2) of
the project-- the Health System Modernization Project 2 (Credit Agreement
# 4267 AM) is expected to start in June 2007and end in June 2012.

The project development objectives of the second phase are: (i) scaling up
family medicine based primary health care reform by expanding the
renovation of PHC facilities and upgrading of the medical equipment in the
remaining marzes, (ii) optimizing and upgrading hospital networks in the
marzes, (iii) strengthening Government capacity to develop and monitor
effective health sector policies in the area of health financing, resource
allocation and provider payments; and (iv) expanding investing in human
resources to include formal and continuous education in health.

The project is classified under the Environmental Category B (as well as
the on-going first phase of the Health System Modernization Project) in
accordance with World Bank operational policies. Potential adverse
environmental impacts on environment are restricted and are summarized
below:
·Dust and noise due to demolition and construction;
·Encroachment into private property;
·Risk of damage to unknown historical and archaeological sites;
·Dumping of demolition and construction wastes and accidental spillage of
machine oil, lubricants, etc; and
·Risk for inadequate handling of hazardous wastewater, waste gases and
spillages of hazardous material during operation of the hospitals; and
·Risk from inadequate handling of medical waste.

These risks were reviewed during project preparation and an Environmental
Management Plan (EMP) was prepared with appropriate measures of their
mitigation envisioned in the design, planning and construction process as
well as during the operation of the facilities.
The total cost of the project is US$29,623,333.3 of which Credit funds are
US$ 22,000,000.0 and the contribution of the Armenian side is about
US$7,623,333.3 (Government of Armenia-- US$ 7,171,649.8, Yerevan State
Medical University— US$300,000.0 and communities-- US$ 151,683.6).
The project budget includes the following expenditure categories:
·Consultant Services: US$ 2.744,337.3
·Training: US$1.380,000.0
·Goods: US$4,912,099.1
·Works: US$19,333,671.6
·Operating costs: US$1,263,255.2

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Background
Family Medicine Development
The Government of Armenia approved the first strategy for PHC development
in 1997 and reoriented the PHC system toward the introduction of Family
Medicine. Armenia was one of the first countries among the Commonwealth of
Independent States (CIS) to establish Chairs of Family Medicine at the
State Medical University (SMU), National Institute of Health and
Basic Medical College (BMC) in 1997.

Under the World Bank supported first health project
eighty-one community micro projects have been implemented which was a
considerable input in reforming and modernizing the rural primary health
care system of Armenia. Particularly, ambulatories were renovated or newly
constructed, provided with ambulance cars, equipped with necessary and up-
to-date devices. By 2003, 221 physicians received a qualification of
family doctor, and 178 nurses were trained as family nurses. This was
about
11 percent of the needs for family doctors and 5 percent of family nursing
staff. Armenia has also developed, published, and distributed practice
guidelines for family doctors (127 guidelines) and family medicine nurses
(56 guidelines). The reimbursement of newly qualified family doctors by
health care financing agency is consisted of capitation-based payment and
fee for service financing for delivery of certain narrow specialist
activities included in their scope of work. The overall information
received during evaluation of the first health project (1998-2003)
supported by the World Bank certifies that the Project played
significant role in health care reforms and developments.
In 2003 the Government approved the follow-up PHC development strategy to
scale up and complete the PHC reforms. Its general objective is to secure
access to quality basic health services, in particular for the poor and in
rural areas, and reiterates the basic principles of the PHC reforms in
Armenia. The strategy consists of: (i) integrating separate streams of
primary health care functions (children, adults, and women consultancies)
within an institution of family doctor; (ii) strengthening the
qualifications and skills of the PHC providers through retraining and
training family physicians and nurses and developing practice guidelines;
(iii) improving infrastructure for essential health services in rural
areas; (iv) putting in place appropriate financing mechanisms; (v)
increasing community ownership and responsibility of PHC services; (vi)
increasing share of public expenditures going for PHC; and (vii) achieving
favorable results in population’s health status by focusing on preventive
care. The reform of the PHC is well progressing.
In 2004 Health System Modernization Project (HSMP) as the first phase of
APL (APL1) was launched. Within second health project the capacity of
training institutions have been enhanced: family physicians’ and nurses’
training centers were established and equipped in Lori, Shirak and Syunik
marzes. NIH, SMU, BMC were provided with training furniture, equipment,
supplies, IT equipment, and skill labs. Renovation of the Yerevan second
clinical training has been started and will be completed in summer 2007.
TOT courses were organized for 60 family physicians and 15 nurse trainers.
In years 2005-2006 18 practical guidelines for family physicians were
developed and published. TOT courses to core staff of
FM/FN chairs have been provided by international expert. 412 family
physicians and 390 family nurses have already been retrained, and at
present 280 physicians are under family medicine retraining and will
complete their retraining accordingly in September 2007 and
January 2008. At present, 145 family nurses are under the retraining and
will complete it in July, 2007. Civil works have been completed in 20
community ambulatories and another 150 community ambulatories and health
centers were provided with standard sets of medical equipment, medical
furniture, supplies and IT equipment. In April 2006 the Government
adopted the decree on population open enrollment (OE). Starting from the
second half of the year 2007 it is projected to start countrywide
population free enrollment and introduce
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independent family medicine group practices. At the same time according to
the recently approved regional health systems optimization programs almost
all rural ambulatories, which at present are merged with polyclinics will
be separated in 2007 and have autonomous legal status and independent
contracts with SHA. It is anticipated to introduce performance based
reimbursement for primary care providers. PHC share of public expenditures
on health care increased from 11.3 to 41 percent between 1997 and 2006.
The advanced second phase of the project
–Health System Modernization Project 2 (APL2)
will allow training of additional 600 family doctors and 720 nurses,
improvement of infrastructure of 50 PHC centers thus resulting in major
gains in terms of time required to complete the transformation of the PHC
network to Family Medicine based primary health care system.

Hospital Network Optimization
The Government of Armenia has been shown to be effective in the
implementation of the optimization program as well. Following the adoption
of the National Concept of Health System Optimization, the first round of
marz health care delivery systems optimization plans were implemented in
2001. On

December 5, 2002, the Government adopted another
resolution approving a hospital masterplan for the city of Yerevan with a
long term aim to achieve a sustainable capacity of six-eight hospitals
through mergers of the current 44 hospitals. Hospital optimization in
Yerevan is politically difficult process; nevertheless, the
gains from consolidation would also be highest in the capital city where
the bulk of excess capacity lies. And, on November 21, 2003, the
Government adopted a decree that
consolidated twenty-four public hospitals and thirteen outpatient health
care institutions into ten1networks in Yerevan. This was a significant
step towards the optimization and modernization of health services network
by the Government. The three of the ten hospital networks in Yerevan,
namely the State Medical University Hospitals, Surb Grigor Lusavorich
and Saint Marie Medical Centers were included in the on-going Health
System Modernization Project (APL1) subcomponents B1-B3. Within the
project the three hospital mergers receive support for civil works related
to consolidation of services, are provided with essential medical
equipment to improve quality and safety of care and IT equipment to
improve management systems. They also receive technical assistance within
the subcomponent B6 of the project to modernize management structures and
improve management capacity, develop strategic development plans, and
introduce quality assurance systems. The activities supporting improvement
of handling medical waste are part of the environmental management plan
linked to the project. The project hospitals received technical assistance
to develop their individual waste management plans based on national
guidelines developed under component C of the project, and trained a
network of staff representatives. Essential waste management supplies and
equipment will also be provided within the project funds.
By January 2007 the project hospital mergers have resulted in improvement
of indicators of utilization of hospital in-patient and outpatient
services, efficiency and productivity against the project targets. It is
expected that after the completion of consolidation of services,
introduction of improved management systems and provision with new
biomedical equipment the indicators will be reaching the target levels.
In 2005, following the described positive experience of optimization in
Yerevan, and in the scope of the subcomponent B5 of the on-going first
phase of HSMP, regional (marz) optimization initiatives were undertaken
through development of general masterplans of 1. The merger of the “Nork”
infectious diseases hospital, the Republican Center of AIDS Prevention and
the Scientific Center of Dermatology and STDs was afterwards unbundled due
to several technical, medical and political complications.
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marz health care delivery systems. On November 2, 2006 the Government
approved the master-plans of optimization. This has been a politically
sensitive and technically challenging process, requiring therefore a
follow-up with major investment in the marz hospital networks.
It has to be noted that even before the approval of the plans intensive
discussions were generated around the preferred schedule of investments to
follow the implementation of the marz master plans. It was suggested that
the program has to be carried out rather intensively, within a period of
two years and covering concurrently principal hospital networks of all
marzes of the republic. It is anticipated that by strengthening the
principal hospital networks and turning them into a high quality health
care providers patient flows would be reoriented to those hospitals,
prevent referrals to the capital city Yerevan and result in increased
accessibility of services. Although the marz investment program will be
carried out simultaneously in all marzes, the hospital networks of the two
marzes, will be covered under the on-going project (APL1) funds. The
second phase (APL2) of Health System Modernization Project will support
optimization and upgrading of the hospital infrastructure
in the rest of the marzes of the republic.
On December 2008 the Government approved the revision of the Shirak marz
hospital system optimization plan envisioning a merger of three existing
hospitals in Gyumri city of Shirak marz—Samariter hospital of therapeutic
profile, Gyulbenkyan Surgical Hospital and multi-profile Shirak marz
hospital into one 200-bed new Gyumri Medical Center to be newly
constructed in the premises of Austrian Children’s’ hospital of Gyumri
with subsequent closure of the above three existing hospitals.

Institutional Strengthening
The Government approved a decree in September 2004 that sets out the
implementation plan to improve financial management and accountability in
public hospitals. The decree calls for introduction of uniform set of
accounts and a set of standard forms, training of accountants in
hospitals, introduction of hospital governance board in a pilot public
hospital, requirement of independent financial audits and introducing new
reporting mechanisms to Ministry of Finance and Economy. A time-bound
action plan of improved supervisory and oversight arrangements of
hospitals was developed by MOH and approved by Governmental decree in
Sept 2004 to improve governance arrangements that is based on three
pillars: introduction of Hospital Supervisory Committees; improved SHA
contracting; reporting arrangements for public and private hospitals; and,
strengthened regulatory functions of the MOH for public
and private hospitals. SHA has developed case-based reimbursement
instruments for hospital care (within a capped budget) and capitation-
based financing of PHC and capacity to develop and monitor contracts.
On May 19 2005 the Government approved the decree # 1187 on establishment
of supervisory committees and regulation of their activities in joint
stock companies with public shares of 50% and more. The decree stipulates
the establishment of supervisory committees (supervisors) and sets forth
rules of their functioning, incl. selection of committee members,
their functions, obligations and rights, the order of committee sessions
and check-ups, writing of a check-up certificate and conclusion of
supervisory committee. Independent audit of public hospitals is performed
by public hospitals upon written instruction of the founder and submitted
to the latter. For the first time in the RA the 2004 National Health
Accounts (NHA) report was developed with comprehensive, consistent and
internationally comparable analysis on how health resources are spent on
what types of services, and who pays which will improve transparency of
health sector financing and offer a better base for policy decisions. The
National Health Sector Performance Assessment (NHSPA) report is in the
preparation stage. In future it is planned to institutionalize the process
of NHA and NHSPA reports
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development on regular basis in order to provide evidence-based
information to the government for health policy formulation, analysis, and
management. The MOH and SHA continue to develop with more focus and
attention to the issues of appropriateness and quality of care,
improvement of the health legislation, updating of information base, fine-
tuning of the state order programs and introduction of performance-
based reimbursement systems both for PHC and hospital levels. APL2 would
support the further strengthening of institutional base for effective
system governance, including formulation of national health care policy,
health care human resources strategy and planning
framework.
The second phase of the project will also provide resources for further
control and prevention of non-communicable diseases aimed at reduction of
public health risks and improvement of health status indicators.
Improvement of the Undergraduate and Continuous Medical Education
The system of higher education of the Republic of Armenia gradually
integrates in European higher educational zone and Bologna procedure,
which assumes the following: (i) create a system of understandable and
comparative stages of qualification, including the unification of
diploma (ii) passes on to the double-stage system of higher education
(iii) establish the universal European system of credit accumulation and
transfers, (iv) assure the mobility of students, lecturers, researchers
and educational administration in European zone, (v) promote
the application of European standards in sphere of higher education. The
APL 2 funds will support the revision of professional education standards,
the skills and competencies assessment system and improve the technical
supply of teaching capacities of medical educational facilities.

This operational manual describes the overall implementation arrangements
and institutional schemes of the second phase of Health System
Modernization Project-2 (APL2) as well as implementation arrangements of
activities by each project component as listed and described
in the Project Implementation Plan.

IMPLEMENTATION ARRANGEMENTS
The overall responsibility for project implementation rests with the
Ministry of Health. The Ministry has designated the First Deputy Minister
as focal point for overall project implementation. The Ministry will be
supported by its Health Project Implementation Unit (HPIU), which oversees
the implementation of the ongoing APL1 and will continue to do so
for APL 2. The HPIU will be responsible for the fiduciary aspects of the
project and provide administration and coordination support to MOH
departments and agencies that are responsible for project activities. The
Project Steering Committee oversees the project implementation with
overall fiduciary oversight responsibility. Component-specific
Coordination Committees will be established to guide and monitor
implementation of individual project components or subcomponents (see
below under description of implementation arrangements for each
component).

Project Steering Committee
The Project Steering committee was established to guide and supervise the
implementation of the project. The committee is chaired by the Minister of
Health. The Minister of Health appoints the committee. Its members are:
·Minister of Health (chairman)
·First Deputy Minister of Health
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·First Deputy Minister of Finance and Economy
·First Deputy Minister of Justice
·Deputy Minister of Territorial Affairs
·Deputy Minister of Health responsible for economic and financial Issues
·Head of Credit and Humanitarian Assistance Programs Department of the
Staff of Government
·Head of Health Economics and Accounting Department of the Staff of the
Ministry of Health
·Head of the Medical Care Provision Department of the Ministry of Health
·Head of the State Hygienic and Anti-Epidemic Inspectorate of the Ministry
of Health
·Director of the HPIU
The TOR for the Steering Committee are the following: (i) review and
approve the reallocations of the projects’ budgets when necessary and
submitting these amendments to the Government for approval with the prior
agreement of the WB; (ii) supervise the operation of
the HPIU; (iii) supervise the expenditures made under PPF or grants during
the preparation period of the projects, and credits during implementation;
(iv) review and approve the project annual time schedules and the budgets
after approval of Credit/Grant Agreements; (v) review and approve progress
and financial reports of the projects components; (vi) review and approve
the final results of tenders for procurement of works,
services and goods costing more than of USD 50,000; (vii) approve the
amendments to the contracts, when the amount in the cost of the contact is
changed by more then USD 50,000; (viii) present suggestions to the
Government on the use of any savings during the implementation of the
projects funds, as well as their reallocation with the prior agreement of
the Bank; (ix) adopt decisions on actions eliminating the breaches and
deficiencies revealed during implementation of the projects and supervise
the implementation of those decisions; (x) convene an out of term meeting
during Bank missions and discuss the progress made on the project
implementation with the Bank team and present a report to the Government
on the outcomes of the Bank missions.

Regular meetings of the Steering Committee shall be held every month;
extraordinary meetings can be called by request of the chairman, director
of HPIU or of the 1/3 of members of the Committee. Any decision of the
Steering Committee will be considered valid by a simple majority of vote
of the members present. In case of equal division of voices, ties
will be solved by the quantifying vote of the Chairman.

The Health Project Implementation Unit
has a core group of professional staff for the entire
duration of the project including Project Director, Procurement Officer,
Financial Manager, Accountant, Community Mobilization Specialist, PHC
Component Coordinator, Hospital Optimization Component Coordinator and
Institutional Strengthening Component Coordinator, as well as three
additional professionals—Civil Engineer/Environmental Specialist, Legal
Specialist, and Monitoring and Evaluation Specialist.
The Director of the HPIU is responsible for the general management and
coordination of the project activities, including overseeing the
implementation of the project components. The HPIU component coordinators
work closely with the relevant Ministerial Departments as well as other
stakeholders of the project (Yerevan Municipality, Marz Government Health
Departments, National Institute of Health and Yerevan State Medical
University, hospital and
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other health facility administrations, etc.) and coordinate implementation
of all component related activities. They prepare yearly and quarterly
implementation plans, assure regular implementation monitoring,
preparation of progress reports, as well as development of TOR
of consultants within each project component. Implementation plans and
progress reports are reviewed by the component specific Coordination
Committees and approved by Steering Committee and the Ministry of Health.
The project component coordinators are assisted by the rest of the
professional staff members of the HPIU and consultants of the project
(assistants to the coordinator, biomedical engineer, etc).
The legal specialist provides legal advisory services to HPIU, and also
assists the MOH with the development of the necessary legislative and
regulatory framework pertaining to hospitals, independent family medicine
practices, etc. The M&E specialist helps to set up the overall M&E system
for the project and prepares the framework for various impact evaluation
studies, which will be carried out at specific times during project
implementation. The Civil Works Engineer/ Environmental specialist
appraises the physical condition of existing buildings of project
hospitals, PHC and training centers, assures technical inputs to
procurement of A&E and construction services by preparation of the
technical documentation for conducting tenders, assures adequacy of
planning, designs, bills of quantities, conducts periodic site visits to
review progress and prepares supervision reports on behalf of the MOH.
He is also responsible for implementation of the environmental management
plans for the FMD and hospital components. He coordinates environmental
training for staff, designers and local contractors; as well as and
implementation of mitigation measures and environmental reviews within
the project activities. The functions of Financial Manager, Procurement
Specialist and Accountant are detailed in Financial Management Manual.
FAMILY MEDICINE DEVELOPMENT (FMD) COMPONENT
Component Institutional Set up Implementation of FMD component will be
carried through the coordinated activities of three
institutions:
The FMD component Coordination Committee,
The FMD component in the PIU,
The Management Boards at the PHC facilities.
The FMD Component Coordination Committee
Tasks
The FMD component Coordination Committee guides and supervises the
implementation of
the FMD component activities in accordance with the FMD operational manual
(OM).
Members
The Minister of Health appoints the FMD component Coordination Committee.
Its members
are:
·First Deputy Minister of Health responsible for PHC (Chairman)
·Legal adviser of MOH
·Director of the State Health Agency ( SHA),
·Head of Health Care Provision Department of MOH
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·Head of Education and Science Department of MOH
·Head of PHC unit of Health Care Provision Department of MOH
·Head of Family Medicine Chair at NIH
·Head of Family Medicine Chair at SMU
·Head of Family Nursing Chair at BMC
·Director of HPIU
·Coordinator of the FMD component.
Meetings
Regular meetings of the Coordination Committee shall be held at least once
every three months; extraordinary meetings can be called by request of any
member of the Coordination Committee. There is quorum when at least 51% of
the members are present. Any decision of the Committee is considered valid
by a simple majority of votes of the members present. In case of equal
division of voices, ties are solved by the qualifying vote of the
Chairman. Terms of Reference for the FMD Coordination Committee
The following are the terms of reference (TOR) for the FMD component
Coordination
Committee:
·approve family medicine implementation policies;
·ensure the harmonization between FMD sub-
components’ activities;
·approve annual plans for the FMD component and any modification thereof;
·make decisions on major problems emerging in the process of the project’s
implementation;
·guide and supervise the implementation of the FMD in accordance with the
OM;
·approve annual report on the FMD component implementation to be submitted
to the Minister of Health;
·ensure the coordination of the FMD activities with the projects
implemented by other
donors involved in the field of PHC.
FMD Component
The FMD component is implemented by FMD Coordinator in cooperation with
Community Mobilization Specialist, Procurement Specialist Civil Engineer/
environmental Specialist, Legal Specialist and Monitoring-Evaluation
Specialist. Local technical assistance will as well beused for day-to-day
supervision of civil works, facilitation of community mobilization,
supervision of training process. The component coordinator reports
directly to the director of
HPIU.

The FMD component has the following responsibilities:
·coordination support to the relevant MOH departments responsible for
implementation of the activities and policies stipulated by component;
·development of the final version of the operational manual (OM) and
subsequent amendments when necessary;
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·development of the evaluation criteria for micro-project approval, and
subsequent
amendments during implementation, if deemed necessary;
·dissemination of information and program promotion at the community and
marz levels;
·supporting the creation and effective operation of PHC facility
Management Boards;
·preliminary screening of micro-projects (pre-appraisal);
·provision of technical assistance to Health Facility Management Boards
for the production of a Family Medicine Development Plan (FMD plan) and
other required documents;
·signing of Contracts on Cooperation between HPIU and Heads of Communities
for micro-project implementation;
·maintaining a filing system for proper record keeping of project related
documents (contracts on cooperation signed between the HPIU and the
Facility Management Board,
acceptance certificates of civil works completions, etc);
·monitoring of program implementation and ensuring the compliance with
established norms and standards;
·health facility FM team performance monitoring and evaluation;
·liaise and work in close collaboration with regional health departments,
local governments, and international agencies collaborating under the
Project;
·coordination of family physicians and nurses training / re-training
program;
·continues monitoring and evaluation of training / re- training process;
·make recommendations to the FMD component Coordination Committee on the
approval or rejection of appraised micro-projects.
The Facility Management Board
The Facility Management Board is the main instrument of community
participation and facility governance at the community level. It has been
designed as a simple tool of social
control aimed at generating local participation in financing and
management of the rehabilitated facility. As such, it is considered an
important element for project sustainability
once the project is finished.
The Management Board consists of six members, some appointed and some
elected. The appointed members include:
·Head of community (chairman)
·Head of the Marz health department, or his/her representative
·Head of the PHC facility

Elected members are:
·Three representatives of communities elected during the General Community
Meeting and representing the users of facility services.

In the case of projects presented by a PHC network of facilities in rural
areas (one ambulatory and one or more health posts), the network will have
a single Management Board. The Page 11
11members representing the health professionals and the community members
may be selected from any of the participating villages.
The roles and responsibilities of the Facility Management Board are the
following:
·Collaboration with FMD component and HPIU for the overall period of
micro-project
implementation;
·signing of contracts between HPIU Director and Heads of Communities;
·health needs assessment at the community level;
·submission of Proposal and other required necessary documents to be
attached to the
Proposal;
·submission of the Letter of Intent;
·development of the family medicine development plan with the assistance
of the FMD component Community Mobilization Specialist;
·participation in overseeing the implementation of the project at the
local level;
·mobilization of the resources required for the community contribution.
·submission of all technical conditions for starting facility design
process (if micro-project
is adopted)
Heads of communities and heads of facilities participate in signing of
acceptance certificates
Of civil works completions. Supervision of the civil works implementation.
is the responsibility of

HPIU.

2. Retraining of Family Physicians and Family Nurses Overall coordination
of the family medicine training program will be assured by MOH Unit
Of Education and Staff Management in collaboration with the HPIU FMD
Component Coordinator. Marz health officials will select trainees to
participate in each round of family medicine retraining from presently
working district therapists, district pediatricians, narrow specialists
(cardiologist, neurologist, endocrinologist, etc) and nurses employed by
urban polyclinics, rural ambulatories, health centers and health posts of
ambulatories included in the project. Lists of participants will be
provided to the FMD component of HPIU for checking and submission to the
MOH for approval by Ministerial Decree. The training of family medicine
physicians and nurses is carried out at the National Institute of Health,
State Medical University and Basic Medical College.
Actual organization and implementation of the training courses will be the
task of the Family Medicine Chairs at Yerevan State Medical University,
the National Institute of Health and Basic Medical College. According to
order # 613 of 2003 of the Minister of Health of RA, family medicine
specialization of district physicians has to be implemented based on the
unified educational curriculum of Family medicine. The Family Medicine
training consists of 12 months courses including 8 months of
academic/clinical education in Yerevan and a total of 4 months practice in
medical facilities without practice interruption of trainees (every
two months of academic training are followed by one month of practical
training). Training process is organized on the ground of modules grouped
in four major blocks and intermitted by practical trainings in trainees’
own working places and marz practical training sites. 6 months retraining
of nurses is organized based on modules grouped in five major blocks.
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Physicians, who are in the process of retraining return to their working
sites for a month and, as envisaged in the training plan, visit pre-
selected family physician trainers to strengthen their skills. During this
one month period core staff from Family Medicine chairs regularly
visits the above-mentioned training sites and makes on-site training
process observations. The responsibilities of the training institutions in
relation to the quality of re-training programs are:
·Ensuring high quality practical and clinical training;
·Ensuring proper organization of the trainings in the regions;
·pre- and post- evaluation of trainee’s competencies jointly with the HPIU
staff as well as on-the-job (practical training part) performance
assessment. The appropriate tools for training courses evaluation, such as
knowledge tests, practical skills observations and satisfaction survey
questionnaires have been developed by the FM Chairs;
·Conduction of appropriate final written and oral examinations including
patient-based case management.
·Development of a system of continues education on Family Medicine for
already practicing Family physicians and nurses.
In Yerevan clinical training will be conducted in second Yerevan clinical
training centre and polyclinic #17, rehabilitated as practical–clinical
centre. In Shirak, Lori and Syunik marzes clinical trainings are conducted
at the newly created training sites. In the rest 7 marzes the
ambulatories renovated and equipped within the first WB supported Health
Project are used as clinical training sites.
Clinical training sites should fulfil the following requirements:
·Good practice and training premises
·Adequate medical equipment readily available for the trainee
·Retrained family physicians and nurses staff passed through “FM TOT “
training courses
·A volume of practice workload which ensures a balance for the trainee
between gaining of clinical experience and other opportunities for
learning
·Well organized practice records, record-keeping and reporting
·Effective practice management
·Teaching materials: books, guidelines, internet access- as an advantage.
Relations between training institutions and practical training sites will
be regulated on contractual basis.
Additional 15 physician and nurse trainers for Yerevan will be trained
through ‘Training of trainers’ courses.
3. Promotion of PHC activities The government supports a public
information campaign at the national level aimed at disseminating general
information about the Armenian health care reforms. This campaign
will have primary health care reforms at its core and FMD as one of its
main components. At community level meetings with health providers and
other interested parties will be held by
FMD component to increase awareness and capacity of communities on
implementation of PHC reforms. PHC Strategy and evaluation reports of
Health Projects are provided to representatives of PHC facilities and
communities (see details in 4.1.1)

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–Project Cycle The project is expected to rehabilitate facilities
approximately for fifty (50)FM teams during the project’s lifespan. During
2008 and 2009 six and seven community ambulatories will be newly
constructed accordingly and 20 community ambulatories will be renovated.
In addition, in 2010 10 community ambulatories will be renovated and 7
community ambulatories will be newly constructed.
4.1 Identification
According to HPIU appraisal, which was carried out during visits to 150
ambulatories and health centers in addition to the 75 community
ambulatories rehabilitated within the WB supported first health project
and 21 community ambulatories included in the WB supported second project
(APL1), also approximately 80 rural ambulatories and health centers need
improvement of physical infrastructure (building conditions). The lists of
above mentioned community health facilities were preliminarily discussed
and agreed with marz health officials. The main criteria for having been
involved in the preliminary lists was the worst or bad building conditions
of facilities(destroyed roof, floor, water, sewage and heating systems,
etc) accompanied by the fact of involvement in FM retraining courses and
medical equipment provision. During February – May 2007 revisits were
done by HPIU FMD coordinator, community mobilization specialist, civil
engineer/environmental specialist together with marz health authorities
from 9 marzes to 76 community health facilities for identification of
urgent needs for improvement of physical infrastructure. After each visit
detailed reports were prepared on facilities’ physical conditions.
Meetings will be organized with officials of marzes to finalize the list
of pre-selected micro projects. Every micro project will pass
standardized implementation cycle as described below.

4.1.1. Community Participation - General Community Meeting
The FMD component promotion aims to provide detailed information at pre-
selected community’s level through participation in community meetings
under the leadership of the authorities of Marz Health Department and head
of community.

During each General Community Meeting the FMD unit will have the
following tasks:
·brief presentation of the PHC reforms’ strategy for years 2003-2008;
·brief presentation of the results of WB supported first and second Health
Projects;
·presentation of the FMD component goals, strategies, and expected
outcomes;
·presentation of the approach proposed for community participation;
·support for selection of non-appointed community members of Management
Board;
·support for submission of Standard Proposal Form and Letter of Intent.
Once the project is at the implementation stage, the Community
mobilization specialist will make periodic visits to the same regions and
villages for assessment, using different tools such as interviews with the
population and health providers. The information received from these
activities will provide the FMD unit with an overview of the conditions,
priorities, and
needs of local communities; this will be used to confirm the consistency
of the real situation with the content of the proposal.
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14

4.2.1. Pre-Appraisal - Eligibility Criteria
Proposals and Letters of Intent that are submitted to the FMD Unit will
pass the process of pre-appraisal, conducted by the Community Mobilization
Specialist. All proposals will be presented using the Standard Proposal
Form. Submitted proposals will be recorded in special files, including the
following information: ·

name
·region and location of PHC facility
·contact person
·date of receipt
·amount of funding requested
·typology of the proposed activities
The PHC facilities eligible for financing include rural ambulatories and
health centers supplied with PHC physicians. In most rural areas, an
ambulatory has a supervisory and reference role in relation to health
posts in nearby villages. The ambulatory is staffed by doctors and nurses,
while the health posts - only by nurses. In any case, only one micro-
project will be considered for one team - either working in one facility
or in the network. The required organizational and managerial conditions
include:
1.The facility has a status of independent legal entity (ambulatory or
health center not included in polyclinic network)
2.The facility has opened and is operating a bank account
3.The Facility Management Board has been appointed and selected
4.Letter of Intent has been signed by Management Board Chairman
5.The staff has demonstrated commitment to be re-trained as family
medicine providers
6.The Facility Management Board has agreed to the future use of the
facility for training purposes
7.The community has demonstrated commitment to make contribution for micro
project implementation.
Along with eligibility criteria proposals will include the information on
PHC facility as well as on social-economic infrastructure of community.
The Proposal is submitted to the HPIU for appraisal. Appraisal implies
both review of documents and site visits. The main criteria used for
prioritizing of proposals are the facility’s building condition, current
inventory of equipment and supplies, the distance of PHC facility from the
nearest regional center (central polyclinic or hospital), population size
of community, involved other donor projects and commitment of staff to be
re-trained. The facilities with poor buildings condition, located far
from regional center and having large served population size will be at
the top of the prioritization list. If the proposal meets the preliminary
criteria but still requires further information, a Letter of
Request for further information is sent to the facility Management Board.
If the proposal is complete and meets the preliminary criteria it is
thoroughly analyzed based on criteria of evaluation. Those Proposals that
are considered possible for approval and are at
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15
the top of priority list are presented to FMD component Coordination
Committee for assessment and approval. In case if the proposal does not
meet the preliminary criteria, for example PHC facility is included in
polyclinic network, has been rehabilitated by other donor organization,
community contribution has not been assured, etc. a Letter of Rejection
will be issued explaining the reasons for rejection.
4.3. Family Medicine Development Plan and Family Medicine Development
Strategy After approval of micro project the FMD community mobilization
specialist will provide technical assistance to Management Board and PHC
staff for development of a FM Development Plan aimed at improvement of
provided services and health indicators of the served population. The FM
Development Plan will provide an organizational vision of the future
success of micro-project implementation. It has been designed as a simple
2-3 years strategic plan in which the Management Board will propose
alternatives for organizational change based on the current situation of
the facility and further development. Within the general plan project-
specific action plans can be developed and produce measurable results.
The FM Development Plan will become an integral component for PHC
performance evaluation by HPIU Monitoring and Evaluation Officer.
The FM Development Plan will include two major components: a
strategy for Family Medicine development and an action plan
.4.3.1 Facility Family Medicine Development Strategy
The components of the strategy are the following:
Vision
:
Amental picture of what the facility should look like and how it will
interact with its stakeholders Mission Statement:
A formal statement describing the facility’s future direction, consistent
with the values, goals, and objectives of stakeholders as a group.
Family Medicine Development Strategy: Given the baseline data collected
during pre-appraisal and with the support provided by the Community
Mobilization Specialist, the Boards will describe the proposed Family
Medicine Development strategy for their facility.
The components of the strategy are the following:
1.What will be the future scope of FM activities and services (inside the
facility and outreach) to be provided at the facility level according to
the local situation and the external and internal forces analyzed;
2.How will quality of care be assured?
3.How will the enrollment of population groups of different ages be
ensured?
4.How will the issues of sustainability assured?
5.How will equal access to health services for vulnerable population be
assured?
6.How will patients be attracted by the facility?
7.How will the maintenance of the facility be organized and ensured?
8.What external factors (risks) may affect implementation of proposed
strategy?
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4.3.2 The Action Plan Once the strategy has been elaborated, an action or
implementation plan must be designed, which main components are the
following:
·Identification of the required/proposed investments for strengthening
primary health care activities and services at the facility level;
·Establishment of the required actions for achieving the desired strategy.
These actions can be performed by the MB, by the PHC team, by other staff
in the facility, or by other social actors (community members, consumers,
etc.). These actions are directed towards the solution of the main health
problems of the community;
·Establishment of micro-project results, that can be of financial,
organizational and health nature. They are realistic, short-term outputs
that can be ascribed to the activities performed as part of the facility’s
strategy;
·Definition of risks;
-Establishment of present and future requirements for sustained success

in terms of staff, equipment, office equipment, building, and recurrent
expenditures.

4.3.3 FM development plan performance indicators The goal of the FM
development plans, submitted by the physicians of target facilities is to
protect, promote and enhance the health of the community population
through provision of high quality care. Performance indicators will
measure the extent to which the planned activities took place as well as
the objectives stated in the FM development plans are being
met. The level of objectives achievement will indicate the micro project
success in each facility. Some of the performance indicators mentioned in
the FM development plan will be important outcome indicators of the
project implementation. The main performance indicators will measure the
improvement of the quality, utilization, access to health services at the
PHC facility level, patients’ satisfaction with the provided
services and etc.

4.4. Financing of Micro Projects
Renovation or new construction of rural ambulatories will be carried out
under the project. Estimated costs for construction and renovation
calculated according to the tariffs of Ministry of Urban Development
official bulletin of 2007.
·Renovated ambulatory 44,000.0 USD
·New constructed ambulatory 85,700.0 USD.
The above-mentioned estimated costs are subject to adjustment depending on
the fluctuation of prices at the time of project implementation.

4.4.1 Community Contribution
The contribution coming from the local community will be 5 % of micro-
project civil works cost. The World Bank will cover 90% and rest 5 %
Government of RA. Community contribution will be stated in the Cooperation
Contract. The community contributions should
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17beonly monetary. If prices of civil works change during implementation
of the project, the actual contribution size will be adjusted accordingly.
The implementation of micro-project will not begin until the contribution
of the community is made. For community contributions special bank account
will be opened by HPIU.

4.5. Micro Project Approval
The community proposals appraised and considered eligible for funding are
submitted to the FMD Coordination Committee for approval. Proposals should
be delivered to the members of the Committee at least two days prior to
the meeting. Before each meeting the FMD Coordination Committee members
receive the following documents:
·a summary sheet with basic information regarding the proposal (location
of PHC facility, name, type, performance indicators, cost for the entire
proposal, etc.)
·the appraisal report with the recommendation for approval or rejection
In case if the proposal is rejected by the Coordination Committee, then a
Letter of Rejection will be sent to the PHC facility Management Board,
stating the reasons for rejection.
In case if the proposal is accepted without reservations or conditions
then a Letter of Approval will be sent to the PHC facility informing about
the approval.
4.6 Micro Project Implementation
4.6.1 Cooperation Contract
The micro-project implementation begins with the signing of the Contract
on Cooperation. The Contract will be signed between HPIU and the Head of
Community who is at the same the Chairman of the Facility’s Management
Board and define each actor’s responsibilities.
·The HPIU responsibilities include the micro project implementation, and
technical assistance.
·The Community’s responsibilities include the provision of required
contribution, and fulfillment of other requirements necessary for project
completion (see the chapter above on Facility Management Board).
4.6.2 Civil Works All Civil Works’ related activities (selection of
contractor and civil works implementation) will be done in accordance with
World Bank requirements and rules and legislation in force of
Armenia. Architectural design company consulting services are procured by
HPIU for the development of design, bill of quantities and supervision of
the planned civil works. HPIU Civil Works Engineer/Environmental
Specialist develops terms of assignment (technical requirements) for
the procurement of architectural design services based on facility
technical conditions documents submitted by community. In case of
renovation of existing facility, before initiating the design activities
seismic stability expertise should be accomplished by a consulting company
hired by HPIU. The contract of Civil Works is signed between HPIU and the
selected licensed civil works organization (contractor). HPIU is
responsible for:
·provision of contractor with civil works architectural design,
specifications and bill of quantities developed by architectural design
company;
·supervision of the civil works process by periodically visiting
constriction sites;
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18
·payment of contractor upon acceptance of performance acts on properly
completed works;
·accept the works executed in accordance to contract conditions.
The Contractor is responsible for:
·execution of works in the construction sites in accordance with the
contract conditions and Urban legislation of Armenia;
·liquidation of defects in case of necessity.
 Supervision of Civil Works on behalf of HPIU is carried out by its Civil
Works Engineer/
Environmental specialist assisted by civil works’ hired supervisors taking
into account the big volume of civil works planned under the project. He
is also responsible for coordination and supervision of the environmental
work undertaken in the project according to Environmental Guidelines
developed during the ongoing APL1 project.
5. Medical Equipment
Equipment for the 150 PHC facilities including medical equipment,
furniture, supplies and consumables have been procured and distributed
during the first phase of the Health System
Modernization Project (APL1). Bio-medical engineer hired by HPIU will make
periodic visits and assessment of the working condition, usage and
maintenance of the mentioned equipment.
6. Micro project finalization
The last stage of micro-project is the signing of Acceptance Certificate
on Civil Works Completion by HPIU (Civil Works Engineer/ Environmental
specialist, hired civil works’ supervisor, FMD component coordinator),
head of community, head of health facility, director of civil works’
company and head of regional department of the State Urban
Development Inspectorate; and approval by the Director of HPIU.

HOSPITAL NETWORK OPTIMIZATION (HNO)

Component Institutional Setup

Implementation of the Hospital Network Optimization (HNO) component will
be supervised through the coordinated activities of the following
institutions:
·Coordination Committee on Hospital Network Optimization
·HNO Component at HPIU
·Hospital Services Unit of the Health Care Provision Department of the
Ministry of Health
·Regional (marz) governments and their health departments
·Management teams of the project hospital networks.
  Coordination Committee on Hospital Network Optimization
The Coordination Committee on Hospital Network Optimization will be
established to guide and supervise the implementation of the project. The
committee is chaired by the First Deputy Minister of Health. The Minister
of Health appoints the committee. Its members are suggested to be:
·First Deputy Minister of Health (chairman)
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19
·Legal adviser of MOH
·Head of Health Care Provision Department of the Ministry of Health
·Head of Economy and Finance Department of the Ministry of Health
·Representative of the Ministry of Finance and Economy
·Representative of the Ministry of Territorial Affairs
·Representative of the Ministry of Justice
·Head of the Health Department of Yerevan Municipality
·Representative of State Health Agency
·Representative of the State Hygienic and Anti-Epidemic Inspectorate of
the Ministry
of Health
·Ten marz health department representatives (one representative from each
of the ten
marzes)
*
·HNO component coordinator
·Director of the HPIU
The TOR for the committee are the following: (i) review and approve the
implementation of the marz optimization plans against the implementation
time-schedule; (ii) oversight the implementation of hospital optimization
process both in Yerevan and marzes; (iii) present suggestions to the
Government on any changes, which may occur along with the implementation
upon prior agreement with the World Bank; (iv) adopt decisions on actions
facilitating the implementation of the hospital optimization and supervise
implementation of those decisions; (v) present suggestions to the
Government on respective changes/amendments to the existing legal
framework regulating the hospital governance and management aspects.
Regular meetings of the Committee shall be at least every three months;
extraordinary meetings can be called by request any member of the
committee. Any decision of the Committee will be considered valid by a
simple majority of votes of the members present. In case of equal division
of voices, ties will be solved by the quantifying vote of the Chairman.

HNO component at HPIU The HNO component activities are implemented by HNO
component coordinator in cooperation with other staff members of the HPIU
such as procurement officer, legal specialist, the civil
engineer/environmental specialist, M&E specialist. The coordinator is as
well assisted by consultants of the project (assistant to the HNO
coordinator, biomedical engineer, etc). He/She reports directly to the
Director of HPIU.

1. Selection of beneficiary hospital networks in the marzes

The selection of the beneficiary hospital networks will be proceeding upon
mapping of regional health care facilities. The mapping exercise shall be
undertaken at the expense of the on-going first phase of the project (APL
1) with the objective to provide enough data to make evidence-based
decision on where and what to invest on to complement the optimization
*Each marz health department representative will be invited for and attend
only those meetings of the steering committee that are relevant to his/her
marz having been preliminarily notified on the meeting day and time in
written form.
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20
plans by preparing interactive map layers of all regions with all health
facilities per type and location, their catchments areas and showing
patient flows, service use and resources for each specialty.
The mapping exercise will be consisted of two parts.
1.A local consulting organization shall be procured by HPIU to assess
existing capacities, utilization of services and patient flows in marz
hospital institutions. The scope of activities of those consultants
includes:
·Carry out a health care provider based survey of all regional hospitals
·Perform data entry
·Analyze the health care provider survey data as well as the official
statistic sources and other relevant survey results and produce the
required indicators of hospital service utilization and resources to be
used for the mapping of regional health care
services.
·Analyze patient flows to regional hospitals, defining them by regions and
facilities within and outside of their catchment areas.
·Perform assessment of needs of human resources, equipment and other
technical capacity of regional hospitals
*.
2.
The second part of the mapping assignment will be the preparation of
actual maps of regional health facilities based on the above described
assessment. An individual local consultant shall be procured by HPIU to
perform the listed below activities:
·Acquisition of the ArcGIS basic package and ArcGIS Network Analyst
Extension Software in the name of MOH Republican Health Information &
Analytical Center;
·Develop road shape file. The file contains digital road network covering
the inter-community roads of Armenia;
·Develop elevations’ contour shape file. The file contains the contour
lines (100-m interval or less) for total area of Armenia.
·Develop hill shade GRID file. The file contains the raster elevation
data.
·Develop shape file of boundaries of all communities of Armenia.
·Develop map document mxd file with all the layers above.
 ·In cooperation with the consultants working on marz hospital services
and patient flows assessment, create an electronic database management
system incorporating the data collected and the indicators constructed
upon the health care provider survey as well as the results of the Health
Sector Performance Assessment survey pertinent to hospital services
utilization performed under component C of the on-going first phase
of HSMP and PHC survey performed by “Avag Solutions” in 2006.

Upon completion of the described mapping assignment principal hospital
networks from the marzes (presumably one for each marz) will be selected
for the project implementation. The following selection criteria developed
by the Ministry of Health and similar to those applied in Yerevan will be
taken into consideration as well: (i) political will expressed by
commitment of the regional/marz governments and hospital managers to
follow on optimization through mergers, implement internal optimization
programs and improve
*In the scope of the current first phase of Health System Modernization
Project (APL1) technical assistance for
the detailed assessment of principal regional hospitals (40 hospitals
buildings), their seismic stability and the
proposed refurbishment measures and cost estimates has already been
completed.

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21
management and governance arrangements, (ii) integration of specialist
services with of hospitals and polyclinics and development of hospital
out-patient services; (iii) granting opportunity to gaining independent
status to rural ambulatories, in particular to those transformed into
family medicine practices; (iv) application of the free enrollment
principle in PHC with creation of family medicine independent group
practices further on; (v) human resources planning and management through
application of re-training and re-location programs aimed at recruiting of
the required personnel, (vi) significant potential for rationalization of
facilities through elimination of overlap through consolidation of same
services or underused services of similar character (e.g. different
surgical or medical departments); and consolidation of laboratory and
other diagnostic services;
·
reduction of fixed costs through divesting unused or underused facilities
(reduction of square meters); and enhancement of the remaining facilities
into a high utilization and efficient health care provider with occupancy
rates of at least 75 percent, lengths of stay and other indicators that
are consistent with modern acute care.
·Improvement of governance arrangements including expansion of ownership
representation through supervisory committees, independent audits and
printing and public dissemination of the audit reports, improved
management structures with clearly defined roles and areas of
responsibilities (human resources, operations, financial management,
accounting, IT, quality assurance, etc.), strategic planning,
annual reports, quarterly financial statements.
The Coordination Committee on Hospital Network Optimization/Modernization
will pre- select the beneficiary marz hospital networks and submit the
draft list of pre-selected hospitals to the Project Steering Committee for
approval.
The marz hospital networks investment program will be carried out
simultaneously in all selected hospital networks, however two of them will
be subject to improvement during 2007-2008 in the scope of the on-going
Armenia HSMP (APL1), while the remaining marz hospitals will be covered
under APL 2. The project hospitals will receive support through provision
of building renovation (civil works), essential bio-medical equipment,
health care waste management equipment and supplies as well as management
support technical assistance services.

2. Civil works

Rehabilitation and construction activities of the selected principal
regional hospital networks will be carried out under the project.
Initial assessment of the regional hospital buildings against their
cadastre certificates showed that around 42000 square meters in total are
subject to rehabilitation in the project hospitals.
Costs of renovation of hospitals per square meter (US$380) are estimated
according to the tariffs of Ministry of Urban Development official
bulletin of 2007 and are subject to adjustment depending on the
fluctuation of prices at the time of project implementation.
All Civil Works’ related activities (selection of contractor and civil
works implementation) will be done in accordance with World Bank
requirements and rules and legislation in force of
Armenia. Architectural design company consulting services are procured by
HPIU for the development of design, bill of quantities and supervision of
the planned civil works. HPIU Civil Works Engineer/Environmental
Specialist jointly with the HNO component coordinator develops terms of
assignment (technical requirements) for the procurement of architectural
design services based on detailed assessment of principal regional
hospitals (40 hospitals buildings),
Page 22
22 their seismic stability and the proposed refurbishment measures
performed in the scope of on-going first phase of HSMP.
A civil works organization is then selected and hired by HPIU based on a
contract of Civil Works signed between HPIU and the selected licensed
civil works organization (contractor). HPIU is responsible for:
·provision of contractor with civil works architectural design,
specifications and bill of quantities developed by architectural design
company;
·supervision of the civil works process by periodically visiting
constriction sites;
·payment of contractor upon acceptance of performance acts on properly
completed works;
·accept the works executed in accordance to contract conditions.
The Contractor is responsible for:
·execution of works in the construction sites in accordance with the
contract conditions and Urban Legislation of Armenia;
·liquidation of defects in case of necessity.

Supervision of Civil Works on behalf of HPIU is carried out by its Civil
Works Engineer/Environmental specialist assisted by civil works’ hired
supervisors taking into account the big volume of civil works planned
under the project. He is also responsible for coordination and
supervision of the environmental work undertaken in the project according
to Environmental Guidelines developed during the ongoing APL1 project.

The last stage of civil works is the signing of Acceptance Certificate on
Civil Works Completion by HPIU (Civil Works Engineer/ Environmental
Specialist, hired civil works’ supervisor, HNO component coordinator),
marz governor, head of health facility, director of civil works’ company
and head of regional department of the State Urban Development
Inspectorate; and approval by the Director of HPIU.

3. Provision of medical equipment and furniture The selected marz hospital
networks will receive essential medical equipment and furniture.
All medical equipment and furniture procurement activities will be done in
accordance with legislation in force of Armenia and World Bank
requirements and rules. The following activities will be performed:
·Based on the assessment of needs of equipment and furniture performed by
the biomedical engineer hired by HPIU as well the results of the survey of
health care providers in the scope of the mapping exercise the lists of
essential hospital equipment and furniture to be procured will be
developed by the bio-medical engineer hired by HPIU and agreed with
hospitals’ administration.
·Technical specifications of medical equipment and furniture to be
procured shall be developed by the Medical Equipment specialist of HPIU.
·Bidding and evaluation of bids for procurement of skill labs shall be
conducted in accordance with the WB’s procurement Guidelines
·Contract shall be signed between HPIU and the successful bidder
·As soon as the purchased goods are supplied and delivered to the final
destinations as specified in the contract, a delivery-acceptance
certificate shall be issued by the HPIU and signed by the HPIU; marz
hospital network director and the supplier
·The installation of medical equipment and furniture and other incidental
services (if required) is carried out by the supplier.
Page 23
23
·Training of about 80 medical and support staff of the project hospitals
on usage of the new biomedical equipment will be provided by HPIU under
the project.
·The marz hospitals may share the cost of renovation of their facilities
to accommodate the medical equipment procured under the project, if cost
of renovation exceeds the limits defined under the project.

4. Technical assistance

Local technical assistance services (individual consultancy) will be
procured by HPIU on design and institutionalization of in hospital Quality
Assurance (QA) projects, supporting improvement of the marz hospital
network management arrangements and improving of hospital waste management
systems. The consultancy will be based upon the outcomes of foreign and
local technical assistance activities already implemented in Yerevan
project hospitals under subcomponents B1-B3, as well as B6 of the current
Health System Modernization Project (APL1). Terms of reference for local
consultants will be developed by HNO component at HPIU.

Technical assistance in QA (local consultancy) will include: (i) assisting
marz hospital networks in setting up a quality management structure, (ii)
defining roles and responsibilities of the committee members and staff
representatives in the different hospital units for maintaining and
improving quality of hospital services. (iii) editing the main hospital
processes and developing specific indicators for measurement of their,
(iii) applying Total Quality Management (TQM), (iv) support in
streamlining patient flow and optimizing the usage of diagnostic and
treatment capacities, etc.

Technical assistance in supporting hospital management (local consultancy)
will include: (i) developing management structures and underlying position
job descriptions, (ii) developing
annual reports, business and strategic plans, (iv) developing human
resource management capacity, (v) developing of internal and external
communications.

Technical assistance for development of hospital waste management systems
(local consultancy) will include (i) development of in-hospital health
care waste management plan proceeding on the National guidelines on Health
Care Waste Management and using the waste management plans of the Yerevan
hospitals developed under the on-going Health System Modernization project
(APL1) as prototypes, (ii) training of relevant personnel in safe waste
management practices using the training materials developed and used for
training of staffs of Yerevan hospitals under the on-going Health System
Modernization project (APL1), (iii) based on the proposed in-hospital
plans of improved health care waste management systems develop procurement
lists of waste management equipment and supplies to be procured under the
project.

5. Legal bases and implementation agreements
As stated above actual implementation of the hospital mergers and
management improvements will be the responsibility of Hospital Services
Unit of the Health Care Provision Department of the Ministry of Health,
regional (marz) governments and respective hospital network managers.

Hospital Supervisory (Oversight) Committees are established under the
Government action plan for improvement of hospital governance of 2004 and
the decree of Government of
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24 Armenia # 1187 dated May 19, 2005 on establishment and rules of
functioning of hospital Supervisory Committees (supervisors). The main
responsibilities of the supervisory committee will be to initiate
strategic planning, oversee the hospital management and overall
Performance For each marz hospital network in Yerevan a tri-partite
implementation agreement will be concluded between the MOH, owner of
hospital (marz governor) and hospital network director satisfactory to the
World Bank and outlining the content to the optimization and
modernization program, incl. (i) investments committed by parties (ii)
commitment to functional re-programming and optimization of units and
facilities; (iii) hospitals contribution to the project, e.g.
rehabilitation of space for housing medical equipment procured under the
project; (iv) plan of action for dealing with vacant premises; (v)
commitment to modernize the management and governance arrangements; (vi)
specific performance improvement targets as described below under
implementation of the project monitoring and evaluation.

INSTITUTIONAL STRENGTHENING (IS)

Component Institutional Set-up
IS component coordinator collaborating closely with the relevant
Ministerial Departments as well as other concerned implementing bodies
(State Health Agency, Yerevan Municipality, Marz Government Health
Departments, National Institute of Health and Yerevan State Medical
University, hospital and other health facility administrations, etc.) and
coordinates implementation of all component related activities in
cooperation with other staff members of the HPIU such as procurement
officer, legal specialist and M&E specialist. The coordinator is as well
assisted by consultants of the project (assistant to the IS coordinator,
etc). He reports directly to the Director of HPIU. The component
activities are predominantly local and foreign technical assistance
services procured by HPIU according to the established procedure. The
arrangements required for each subcomponent are described above:

1. Health Policy Development & Health System Performance Assessment

1.1 NHA Coordination Committee
 was created in accordance with the decree #18-A of
Prime Minister, dated January 14, 2005 to oversee the analytical work on
the preparation of NHA.
The scope of work of NHA Coordination Committee is summarized below:
·Working group coordination
·Feedback on results and findings
·Facilitation of an access to all potential data sources
·Assisting in interpretation of results
·Identification of key health systems requirements that determine the
effective provision of health intervention
·Assisting in transferring of policy implications into the policy action
·Supporting NHA institutionalization by establishing ownership at the
highest levels of policy making.
Current NHA working group comprises of representatives from SHA, MOF, NSS,
donor organizations. At present, the NHA 2004 report and draft NHA 2005
report are submitted. The NHA data was collected from various Ministries
and departments that have internal health care systems. Additional data
sources for NHA development are
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25surveys on household health expenditures as well as health care
facilities and drugstores expenditures on health.
For NHA institutionalization, particularly for the establishment of
separate departments for NHA data collection and report development within
the SHA, it is planned to implement some changes in SHA structure and
charter.

1.2
 In order to provide evidence-based information to the Government for
health policy analysis, formulation and management the
Health Sector Performance Assessment (HSPA) should be done on the regular
base. In order to assess whether the entire health system is moving toward
success and policy objectives, the appropriate instrument of measurement
is required. The instrument will allow measuring and monitoring a core set
of indicators used for HSPA. The methods of measurements of these
indicators are diverse and include both primary and secondary data
collection. HSPA data were collected from various sources, particularly
through routine statistical forms, reports from specialized hospital,
household survey and so on. In 2005 year some structural changes took
place at the Ministry of Health. To avoid duplication of
functions/responsibilities of information flow department at the MOH
and Health Information and Analytical Centre (HIAC), which leads to
discrepancies and conflict of interests, it was decided to add activities
of the mentioned entities and reassign these activities to the HIAC
(Minister’s Order N519-A, dated 30 May, 2005).
The information flow department at the MOH was reorganized to legal
department.
The HIAC was merged in the National Institute of Health (NIH) and the
following activities were implemented:
·Working Group (WG) was established
·National performance measurement framework for the health system was
developed and maintained by the WG
·Appropriate national performance indicators within the national
performance measurement framework were established and maintained
·The minimum set of indicators that should be monitored routinely were
determined
·The Local consultant was selected to support the WG on the sampling
methodology and instrument development as well as for secondary data
reliability and validity checking
·IT equipment for NIH Heath Information Analytical Center was purchased,
distributed and installed

During the project the following activities should be implemented:
·For institutionalization of HSPA, establishment of separate department
within the HIAC at NIH, which will be approved by MOH and will be
responsible for HSPA data collection, report development and dissemination
on systematic basis (once in two years)
·Checking validity and reliability of data collected through the routine
statistical forms
·Revision of routine statistical forms in accordance with updated list of
HSPA indicators, to secure the routine flow of information

1.3 For the development of Health Policy Paper the following activities
should be Implemented:
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·Establishment of intersectional WG, involving representatives from
different Ministries (MOH, Ministry of Finance, Ministry of Social Affairs
and so on)
·Development of draft Health Policy Paper by the WG
·Dissemination of the mentioned paper among main stakeholders
·Organization of conference for the discussion of recommendations obtained
from    main stakeholders
·Incorporation of recommendations into the final version of the report
·Preparation of the final report for the Governmental approval.
·Approval of the Health Policy Paper by the Government of Armenia.

For the development of Human Resource (HR) strategy the following
activities should be implemented:
·Establishment of Local WG
·Selection of foreign consultants
·Revision of current documentation related to HR management by the WG and
foreign consultants
·Development of HR management recommendations by foreign consultants
·Development of HR management strategy by the WG based on the
recommendations provided by the foreign consultants
·Dissemination of the draft Strategy among main stakeholders
·Incorporation of recommendations into the final version of the HR
strategy
·Preparation of the final version of the strategy for the MOH approval by
the WG
·HR Management Strategy approved by the MOH.

2. General support for improving health care legislation

·Establishment of WG for continuing revision of health care legislation
including the legal documents related to the health care licensing and
accreditation
·Development of input criteria for health care professionals’ licensing
based on the recommendations suggested by the local and foreign
consultants, working within the previous project
·Establishment of accreditation system based on the recommendations of
local and foreign consultants by the MOH
·Established health care licensing and accreditation system for health
care professionals and health care institutions.

3.   Improvement of Public Expenditures Management
For improvement of public expenditures management the following activities
will be implemented:
 3.1Development of methodology of costing of BBP services:
·Selection of consulting firm with local experience
·Revision of existing documentation related to the assignment by the local
firm
·Development of the draft report on methodology of costing of BBP services
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·Dissemination of the mentioned report among the main stakeholders
·Incorporation of stakeholders’ recommendations into the final version of
the report
·Submission of the report to the MOH and SHA for the improvement of BBP
 costing methodology.

3.2 Improvement of Quality monitoring of main BBP services:
·Selection of the consulting firm with local experience
·Revision of existing documentation related to the assignment by the local
firm
·Development of the report on Quality monitoring of main BBP services
·Dissemination of the mentioned report among the stakeholders
·Incorporation of stakeholders’ recommendations into the final version of
thereport
·Submission of the report to the MOH and SHA for the improvement of
quality monitoring process of main BBP services.

3.3 Structural and management improvement of SHA
-Selection of foreign consultant for development of report on structural
and management improvement of SHA
·Revision of existing documentation related to the structure and
management of SHA by the consultant
·Development of the draft report on structural and management improvement
of SHA
·Dissemination of the mentioned report among the stakeholders
·Incorporation of stakeholders’ recommendations into the final version
of the report
·Submission of the report to the MOH and SHA for strengthening SHA
structural and management capacities.

3.4 IT equipment of SHA divisions
·Technical specifications of IT equipment to be procured under the project
shall be developed by the IT specialist of HPIU
·Bidding and evaluation of bids for procurement of IT equipment shall be
conducted in accordance with the WB procurement Guidelines
·Contract shall be signed between HPIU and the successful bidder
·As soon as the purchased goods are supplied and delivered to the final
destinations as specified in the contract, a delivery-acceptance
certificate shall be issued by the HPIU and signed by the HPIU; SHA
designated representative and the supplier
·The installation of IT equipment and other incidental services (if
required) iscarried out by the supplier.

NCD Prevention & Control
For NCD Prevention and Control aimed at reduction of risk factors and
improvement of health status indicators related to cardio-vascular
diseases, respiratory diseases, diabetes,
and cancer through risk factors screenings among population groups. The
following activities will be performed:
·Selection of the consulting firm with local experience
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·Risk factor screenings of groups of population of the above mentioned NCD
by a local firm
·Development of the report summarizing the results of the screenings
·Submission of the mentioned report to the MOH.

4. Improvement of Medical Education System

For the improvement of medical education system the following activities
should be implemented:
·Selection of foreign and local consultants for revision of formal medical
education and continues medical education (CME) curriculums as well as
medical professional standards. Consultants should develop reports that
involve above mentioned issues. Reports will be submitted to Yerevan State
Medical University (SMU) and National Institute of Health (NIH).
·Selection of local consultants for revision of Legal Documents related to
the Medical Education. Consultant should develop report that involve above
mentioned issue. Report will be submitted to MOH and MOE.
·Selection of foreign and local consultants for the development of
Knowledge Evaluation System. The recommendations for the development of
above mentioned system should be summarized in the reports. The reports
will be submitted to SMU and NIH.
·Selection of firm with local experience for the development of job
descriptions
·Adoption of normative acts (job descriptions) by the Government
·Selection of foreign and local consultants to assess the NIH and SMU
chairs’ needs. The results of needs assessment should be summarized in
reports. The reports will be submitted to SMU and NIH.
·Selection of firm with foreign experience to procure Skill Labs
·Technical specifications of skill labs to be procured shall be developed
by the Medical Equipment specialist of HPIU based on preliminary needs
assessment and lists of items developed and agreed with Medical University
administration.
·Bidding and evaluation of bids for procurement of skill labs shall be
conducted in accordance with the WB’s procurement Guidelines
·Contract shall be signed between HPIU and the successful bidder
·As soon as the purchased goods are supplied and delivered to the final
destinations as specified in the contract, a delivery-acceptance
certificate shall be issued by the HPIU and signed by the HPIU; SHA
designated representative and the supplier
·The installation of skill labs and other incidental services (if
required) is carried out by the supplier.
·To organize study tours to learn about international educational
standards, curriculum development approaches, knowledge evaluation system
and so on.
IMPLEMENTATION OF PROJECT MONITORING AND EVALUATION

Within the project implementation the following monitoring and evaluation
(M&E) activities will be coordinated, supported and carried out:
evaluation of the project's Components A and B, final project evaluation
and health system reform evaluation.
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The MOH, in close coordination with the Health Information and Analytical
Center (HIAC) in National Institute of Health, will monitor and evaluate
the progress, outcomes and impacts of the reforms in health sector. HSMP 1
has supported HIAC in designing and carrying out an evaluation framework
for the reforms assessment and preparing the Health Sector Performance
Assessment report.

The M&E of the HSMP 2 project serves two main purposes:
1. Examining the effectiveness of main interventions in project
intervention sites
2. Serving as a tool for health care facilities to use data for decision-
making and project
management

Implementation of the project final evaluation The aim of the final
evaluation of the project is to find out whether the proposed inputs are
in place, activities performed, outputs produced, outcomes and objectives
achieved and the goal fulfilled. The project final evaluation will
describe the progress made toward the following types of indicators:
process/output indicators, measuring the extent to which the planned
activities took place; outcome indicators measuring the extent to which
project objectives are being met and sector/impact indicators, measuring
the impact of the project on the health sector. The project impact
indicators will be monitored through comprehensive set of methods:
analysis of the population health status and health care utilization
indicators constructed from the routine administrative data; analysis of
data from existing surveys performed on an ongoing basis by National
Statistical Service of Armenia (Integrated Survey of Living Standards,
Demographic and Health Survey, etc); design, implementation and
analysis of additional surveys of households, health care providers;
medical records and ambulatory reports reviews, marz hospital data, etc.

The project final evaluation report will give the answers to the
evaluation questions such as the project’s main inputs, main activities
and outputs, project components and sub-components implementation, etc.
Since the real impact of the project can only be properly understood years
after its completion, the project evaluation should also include formative
issues (attitudes, opinions, lessons to be learnt, etc) where appropriate.
The stakeholders identified for the final beneficiary assessment will be:
MOH management, Ministry of Economy and Finance Representatives, Ministry
of Social Security representatives, SHA management, Family medicine and
family nurses faculties at NIH, SMU and BMC, working groups, marz
governors, heads of the marz health departments, head of health department
of Yerevan municipality, heads of communities, marz hospital
administrators, marz policlinics administrators, PHC providers’ working in
the marz’s policlinics, PHC providers’ working in the rural ambulatories
and health centers, marz and Yerevan polyclinics, family physicians,
family nurses and trainers, hospital care providers (physicians, nurses)
and selected population of Yerevan and marzes.

The data for measuring process/output M&E indicators are collected and
analyzed periodically within the components of the project. Different
methods (quantitative and qualitative) are used for the evaluation of the
Component A and B activities: household, PHC provider and patient
satisfaction surveys, marz hospitals data, retrained family physicians and
nurses knowledge assessment, focus groups with project beneficiaries etc.

1. Implementation of Family Medicine Development component evaluation
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30In order to find out whether the HSMP 2 has been able to positively
change the quality, utilization and efficiency of PHC sector in areas of
project intervention, it is necessary to assess the levels of performance
indicators before implementing the project and after that and compare
them. The PHC performance indicators are grouped into following
categories: utilization, access and quality of PHC services, population
health outcome and expenditures on health, patients’ satisfaction, nature
and extent of referrals etc. Since, by the end of the project, there will
be no pure “control” communities in Armenia, because the project is
planning to provide at least some inputs (health care provider training
and rehabilitation or construction of the ambulatories) to all
communities. Therefore, in order to assess the impact of the project, it
is planned to apply the pre-post comparison evaluation design, which
allows conducting the comparisons before and after the project
implementation. The evaluation of the FMD component will utilize
quantitative data collection methods including household survey and survey
of primary health care providers as well as review of medical records,
ambulatory reports as well as observation of the working condition of
ambulatories/health centers using a structured guide.

Family medicine development plans submitted by the physicians of the
target facilities will be taken into account for the FMD component
evaluation. The goal of the FM development plans is to protect, promote
and enhance the health of the community population through
provision of highquality care. Performance indicators will measure the
extent to which the planned activities took place as well as the
objectives stated in the FM development plans are being met. The level of
objectives achievement will indicate the micro-project success in
target PHC facilities.

Within the Subcomponent A2 ''Retraining and Residency Training of Family
Doctors and Family Nurses'' the physicians’ and nurses’ training programs
are evaluated internally by the institutions doing the retraining and
externally by HPIU M&E officer. There are three tests during the family
physicians training: one at the beginning one in the middle, and the final
one. There is also a satisfaction questionnaire being filled in by the
training participants. Adequate and detailed analyses of family physicians
and nurses training programs are having been done, the feedbacks are being
provided to the training organizations and modifications of
the training programs are being made if necessary.
The patient referral system is the most important element of carrying   out
the “gatekeeper” role of PHC providers. In order to explore the PHC
physicians referral patterns in different
PHC settings, including the main reasons for PHC physicians referrals   to
an out-patient and in-patient specialized care, the main referred
diagnosis, the average numbers of referrals within the PHC all visits   the
focus groups discussions among PHC physicians from rural ambulatories   and
health centers, marz and Yerevan polyclinics are organized.

2. Implementation of Hospital Network Optimization component evaluation
The improved quality of the provided health care services by the
beneficiary marz hospitals will be assessed by the patient satisfaction
surveys in all marzes at the beginning and at the end of the
implementation of marz hospitals optimization projects. Besides, different
data on marz hospital performance (total admissions and by departments,
physicians and nurses distribution by departments, number of surgeries,
number of X-rays, ultrasound and laboratory examinations, etc) will be
collected from beneficiary marz hospitals on annual basis. The outcome
indicators will be defined and calculated for further monitoring and
evaluation purposes. The outcome indicators examples could be the
following: total FTE/1000 patient days aggregated and by each department;
average number
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31 of surgeries by each surgeon per year (operating surgeon or first
assistant); patients per physician, per nurse in each department;
admissions total and per physician; lab tests total and per staff; bed
occupancy rate, and average length of stay; outpatient contact per doctor
as well as the application and availability of common chart of accounts,
consolidated budgets, annual business plans, independently audited annual
accounts and etc.

Monitoring and evaluation of the HSMP 2 project is a responsibility of the
HPIU M&E officer. The M&E officer works in close collaboration with
project components coordinators and reports to the director of the HPIU.

The project M&E officer is responsible for the development of appropriate
framework and measures to assess the progress in implementation of the
HSMP 2 and the extent to which the objectives of the project are achieved.

Scope of work of M&E officer includes:
1. Development of approaches and measurement framework for monitoring and
evaluation of A, B, C components of the project;
2. Periodically reviewing indicators (process/output, outcome and impact)
within the measurement framework;
3. Development of the project component M&E methodologies and instruments
for baseline, midterm and final data collection;
4. M&E of the training courses organized within the frame of the project,
including:
·instrument development
·data collection
·data entry, processing
·data analysis, using statistical software packages (SPSS, STATA)
·report writing.
5. Conduction of the summative and formative evaluation:
·periodically conduct evaluation of results of the project activities in
certain stages;
·
By the end of the project conduct overall project summative and formative
evaluation.
6. Provide feedback to the project component coordinators on the
effectiveness of main
interventions in project intervention sites for the purpose to use results
of the evaluations for decision-making and project management;
7. Assistance to the MOH in developing of health sector performance
assessment measurement framework;
8. Development of TOR for conduction M&E related special studies
(qualitative: e.g. baseline/midterm/final surveys or quantitative: e.g.
in-depth interviews, focus group discussions).
  Local technical assistance is used for the implementation of the
projects/components evaluation special studies. The general
activities/stages for the evaluation special studies are
the following:
  ·TOR for survey conduction, including survey methodology and
questionnaires, in-depth interview and focus group guides;
·Selection of the local consulting firm;
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·Refined proposal of the survey conduction including survey methodology
and
questionnaires, in-depths interview and focus group guides;
·Development of the survey supporting documentation, including guide for
field procedures, interviewer and supervisor manuals and data entry
manual; field team training; pre-testing the survey questionnaire;
·Survey conduction;
·Submission of the draft evaluation report;
·Incorporation of the comments/suggestions/recommendations into the final
version of the report;
·Dissemination of the results of the survey among the stakeholders.

The M&E officer is responsible for the development of the ToRs for the
conduction of the evaluation special surveys, including surveys
methodologies, development of the questionnaires, in-depth interview and
focus group guides and assurance of the quality of the
submitted evaluation reports.
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HPIUOrganizationChart:(Total20StaffembersIncludingAvianInfluenzaPreparedne
ssProjectStaff)32DIREHPIULawyerSecretary/translatorchitect/EnvironmentalSp
ecialistHNOCoordinatoISCoordinatorFMDCoordoFinancialManagerMonitoringandEv
aionSpecialistCommunityMobilizationSpecialist2Accounntants2ProcurementOffi
cersOfficeManager4DriversAIPPHHCordinator
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