Public Disclosure Authorized

Document of
The World Bank

Report No:ICR0000188
Public Disclosure Authorized

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-44240)

FOR A

LOAN IN THE AMOUNT OF 61. 1 MILLION EUROS

(US$66.0 MILLION EQUIVALENT)

TO THE
Public Disclosure Authorized

KINGDOM OF MOROCCO

FOR A

HEALTH FINANCING AND MANAGEMENT PROJECT

September 27, 2007

Public Disclosure Authorized

Human Development Sector

Middle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its content may not otherwise be disclosed without World Bank authorization.
 CURRENCY EQUIVALENTS
Exchange Rate Effective December 31, 2006
Currency Unit = MAD
MAD1.00 = US$ 0.12
US$ 1.00 = MAD 8.3
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS

AMO Assurance maladie obligatoire

ANAM Agence nationale de l’assurance maladie
BAJ Barnamaj Al Aoulaouiyat Al Ijtimaiya/ Social Priorities Program”
DO Development Objectives
EC European Commission
EIB European Investment Bank
FAMS Financial and Accounting Management System
GOM Government of Morocco
HR Human Resources
ICR Implementation Completion Report
ISR Implementation Status Report
M&E Monitoring and Evaluation
MoF Ministry of Finance
MoH Ministry of Health
PAGSS Projet d’appui à la gestion du secteur de la santé
PDO Project Development Objectives
PEH Plan d’établissement de l’hôpital
PFGSS Projet de financement et de gestion du secteur de la santé
PU Project Unit
QAE Quality at Entry
QAG Quality Assurance Group
QI Quality Improvement
RAMED Régime d’assistance médicale pour les économiquement diminués
SIG-HO Système d’information et de gestion hospitalière
TA Technical Assistance
UMER Unité de la mise en oeuvre de la réforme
USP Unité de suivi du projet

Vice President: Daniela Gressani

Country Director: Theodore Ahlers
Sector Manager: Akiko Maeda
Project Team Leader: Jean-Jacques Frère
ICR Primary Author: Sameh El-Saharty
 Kingdom of Morocco
Health Financing and Management Project

CONTENTS

A. Basic Information 1
B. Key Dates 1
C. Ratings Summary 1
D. Sector and Theme Codes 2
E. Bank Staff 2
F. Results Framework Analysis 2
G. Ratings of Project Performance in ISRs 4
H. Restructuring 4
I. Disbursement Graph 5
Project Context, Development Objectives and Design 6
Key Factors Affecting Implementation and Outcomes 9
Assessment of Outcomes 13
Assessment of Risk to Development Outcomes 16
Assessment of Bank and Borrower Performance 17
Lessons Learned 18
Comments on Issues Raised by Borrower/Implementing Agencies/Partners 19
Annex 1: Project Costs and Financing 21
Annex 2: Outputs by Component 22
Annex 3: Economic and Financial Analysis 24
Annex 4: Bank Lending and Implementation Support/Supervision Processes 25
Annex 5: Beneficiary Survey Results 27
Annex 6: Stakeholder Workshop Report and Results 28
Annex 7: Summary of Borrower’s ICR and/or Comments on Draft ICR 29
Annex 8: Comments of Cofinanciers and Other Partners/Stakeholders 39
Annex 9: List of Supporting Documents 40
Annex 10: Status of Introduction of Hospital Management Tools and Hospital
Development as of Project Closing 41
A. Basic Information
MA-HEALTH
Country: Morocco Project Name:
MANAGEMENT
Project ID: P005525 L/C/TF Number(s): IBRD-44240
ICR Date: 09/27/2007 ICR Type: Core ICR
Lending Instrument: SIL Borrower: GOV.OF MOROCCO
Original Total
USD 66.0M Disbursed Amount: USD 30.9M
Commitment:
Environmental Category: B
Implementing Agencies:
Direction des Ambulances et des soins obligatoires
Cofinanciers and Other External Partners:

B. Key Dates
Revised / Actual
Process Date Process Original Date
Date(s)
Concept Review: 04/22/1994 Effectiveness: 11/29/1999 11/29/1999
Appraisal: 11/07/1997 Restructuring(s): 10/21/2003
Approval: 12/17/1998 Mid-term Review: 12/17/2005 05/04/2004
Closing: 12/31/2003 12/31/2006

C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Moderately Unsatisfactory
Risk to Development Outcome: Moderate
Bank Performance: Moderately Unsatisfactory
Borrower Performance: Moderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings
Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory
Moderately Implementing Moderately
Quality of Supervision:
Unsatisfactory Agency/Agencies: Unsatisfactory
Overall Bank Moderately Overall Borrower Moderately
Performance: Unsatisfactory Performance: Unsatisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation QAG Assessments
Indicators Rating
Performance (if any)
Potential Problem Project Quality at Entry
No Satisfactory
at any time (Yes/No): (QEA):

1
 Problem Project at any Quality of Moderately
Yes
time (Yes/No): Supervision (QSA): Unsatisfactory
DO rating before Moderately
Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual
Sector Code (as % of total Bank financing)
Central government administration 3 3
Compulsory health finance 3 3
Health 94 94

Theme Code (Primary/Secondary)

Decentralization Secondary Secondary
Health system performance Primary Primary

E. Bank Staff
Positions At ICR At Approval
Vice President: Daniela Gressani Kemal Dervis
Country Director: Cecile Fruman Daniel Ritchie
Sector Manager: Akiko Maeda Jacques F. Baudouy
Project Team Leader: Jean-Jacques Frère Anne M. Pierre-Louis
ICR Team Leader: Jean-Jacques Frère
ICR Primary Author: Sameh El-Saharty

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)

The objectives of the project and the description of the other components are unchanged.

The objectives of the project are :

a) Improve the efficiency and the quality of care in 14 public hospitals by
strengthening strategic planning capacity and introducing organizational and
management tools and quality control mechanisms;
b) Mobilize additional resources, while preserving equity, by assisting the
Government in introducing new financing mechanisms; and
c) Strengthen MOH's policy formulation and sector management capacity by
assisting MOH in adjusting and performing its mandate in the context of the
Regionalization Law and provide MOH administrative staff with the management
tools required.

2
Revised Project Development Objectives (as approved by original approving authority)
The PDOs were not revised.

(a) PDO Indicator(s)

Original Target Formally

Actual Value Achieved
Values (from Revised
Indicator Baseline Value at Completion or
approval Target
Target Years
documents) Values
Indicator 1 : Number of persons trained overseas
-71 overseas, 824 local
-training in Morocco
was mainly focused on
Value upgrading and
45 (overseas: 36,
quantitative or 0 developing the skills of
local: N/A)
Qualitative) professional staff
(between 2003 and
2005, cumulative
PFGSS and CIDA)
Date achieved 12/01/2001 12/01/2006 12/01/2006
Comments
The indicator is not robust enough to measure efficiency or quality of hospital
(incl. %
services.
achievement)
Indicator 2 : Personnel satisfaction
Value Based on survey to
quantitative or 0 be conducted at
Qualitative) end of project
Date achieved 12/01/2001 12/01/2006
Comments A survey on client satisfaction was planned but not conducted and a survey on
(incl. % personnel satisfaction was conducted in October 2006. Please refer to Annex 5 for
achievement) details.
Indicator 3 : Number of hospitals with medical waste systems in place
Value
quantitative or 0 5
Qualitative)
Date achieved 12/01/2001 12/01/2006
Comments
(incl. % The five sterilization grinders were installed and functional by the end of the project.
achievement)
Indicator 4 : Average occupancy rate
Value
quantitative or 54.9% 70%
Qualitative)
Date achieved 12/01/2001 12/01/2006
Comments Average occupancy rate is a reasonable measure of hospital efficiency. The
(incl. % indicator, however, did not significantly increase as the construction of project
achievement) hospitals was only just completed at project closing. The construction was executed

3
 in several wards and largely affected the hospital central units (radiology, laboratory,
operating rooms). The fact that the hospital staff was able to maintain the level of
services during construction attests to their dedication and hard work.

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value

Formally
Values (from Achieved at
Indicator Baseline Value Revised
approval Completion or
Target Values
documents) Target Years
Indicator 1 : % committed funds; engaged; disbursed
Value
100%; 100%;
(quantitative 0,0,0
100%
or Qualitative)
Date achieved 12/01/2001 12/01/2006
Comments
(incl. % There was no baseline value assigned.
achievement)
Indicator 2 : Proportion of public hospitals are autonomous
Value
(quantitative 38% 90%
or Qualitative)
Date achieved 12/01/2001 12/01/2006
Comments
In addition to the MOH hospitals, two university hospitals became autonomous
(incl. %
during the project period, giving a total of 4 autonomous university hospitals.
achievement)

G. Ratings of Project Performance in ISRs

Actual
Date ISR
No. DO IP Disbursements
Archived
(USD millions)
1 03/02/1999 Satisfactory Satisfactory 0.00
2 04/28/1999 Satisfactory Satisfactory 0.00
3 08/03/1999 Satisfactory Satisfactory 0.00
4 01/21/2000 Satisfactory Satisfactory 0.62
5 02/27/2000 Satisfactory Satisfactory 0.62
6 07/27/2000 Satisfactory Satisfactory 3.27
7 01/25/2001 Satisfactory Satisfactory 3.27
8 03/15/2001 Satisfactory Satisfactory 3.27
9 09/13/2001 Satisfactory Satisfactory 3.27
10 03/13/2002 Satisfactory Satisfactory 3.50
11 09/13/2002 Satisfactory Satisfactory 4.27
12 03/13/2003 Unsatisfactory Unsatisfactory 4.27
13 06/29/2003 Unsatisfactory Satisfactory 4.55
14 12/24/2003 Unsatisfactory Satisfactory 5.34
15 04/14/2004 Unsatisfactory Satisfactory 5.90

4
 16 05/01/2004 Satisfactory Satisfactory 5.90
17 08/02/2004 Satisfactory Satisfactory 8.11
18 03/25/2005 Satisfactory Satisfactory 10.46
19 08/07/2005 Moderately Satisfactory Moderately Satisfactory 18.16
20 11/16/2005 Moderately Satisfactory Moderately Satisfactory 20.69
21 06/30/2006 Moderately Satisfactory Moderately Satisfactory 27.96
22 12/17/2006 Moderately Satisfactory Moderately Satisfactory 33.31

H. Restructuring (if any)

ISR Ratings at Amount

Board Restructuring Disbursed at
Restructuring Reason for Restructuring &
Approved Restructuring
Date(s) Key Changes Made
PDO Change DO IP in USD
millions
10/21/2003 N U S 4.76

I. Disbursement Profile

5
1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

In the early 1990s, Morocco’s economic performance had slowed mainly because of unfavorable
external events (droughts), which resulted in slackened growth and social inequity. In the late 1990s,
Morocco was undergoing a major transition led by King Mohamed VI, which resulted in opening of
the political process and stressed the rule of law. Nevertheless, the economy was still suffering from
slow growth together with high unemployment and poverty rate at 14% and 19%, respectively.
Moreover, the gaps and inequalities between rural and urban areas were profound. The Government,
realizing that these factors might undermine the political transition if unchecked, adopted a national
“Social Priorities Program” that covered priority health, education and social services.

In the health sector, the country made steady progress as reflected by an increase in life expectancy at
birth to 67 years, a decrease in infant mortality rate to 48 deaths per 100,000 live births, and an
increase in immunization coverage to 94%. The World Bank (WB) supported the social program
through the Basic Health Project/BAJ (Barnamaj Al Aoulaouiyat Al Ijtimaiya) (1996 – 2003) aimed at
strengthening preventive and basic curative care in the poorest 14 provinces.
Despite the progress made and the focus on basic health services, the health system still faced major
systemic challenges:
o Government budgetary allocations for health were among the lowest compared to
countries with similar income level. In 1999, health expenditures were about 4.5%
of GDP which was equivalent to around US$56 per capita. Moreover, only 16.4% of
the population was covered by health insurance.

o The hospital network received only about 56% of public resources allocated for
health and suffered from the deterioration of the physical infrastructure, which led to
poor quality of services.
o The effectiveness of the health systems was low due to weak institutional capacity as
well as overly centralized management and decision-making processes.
o Most of the private sector service providers were concentrated in the two largest
cities (Rabat and Casablanca).
Given these challenges, the Government of Morocco (GOM) requested the WB to further support the
health sector in order to complement the Basic Health Project, which addressed the equity of rural
access to basic health care, to ensure the sustainability of the BAJ, and support the then recently
ratified “regionalization” law (1997) as the Government's effort to implement an articulated and
sustainable Social Development Strategy.
In this context, the Health Sector Financing and Management Project was developed to address for the
first time central and systemic sectoral issues such as inefficiency, inequity, resource mobilization and
weak management capacity, which would have a significant impact on the long term sector
development and sustainability.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

According to the loan agreement, the Project Development Objectives (PDOs) were to assist the
Borrower in: (i) improving the efficiency and quality of public hospital services, (ii) introducing new
financial mechanisms for the health sector, and (iii) strengthening the Ministry of Health’s (MOH)
policy formulation and sector management capacities.

6
The achievement of the above PDOs would be demonstrated by the following key indicators:

• To measure the improvement of the efficiency and quality of care in project hospitals:
o Percentage of personnel adequately trained and redeployed in project hospitals
o Rate of client satisfaction
o Rate of personnel satisfaction
• To mobilize additional financial resources:
o Percent increase in the revenues compared with 1997/1998
o Percent increase in cost recovery (from health insurance patients and fee for services)
• To strengthen MOH policy formulation and sector management capacity:
o Percent of the non-salary recurrent budget allocated to the basic health services
network out of the total MOH recurrent budget
o Percent of the non-salary recurrent budget allocated to the MOH hospital network out
of the total MOH recurrent budget
o Percent of the non-salary recurrent budget allocated to the administration out of the
total MOH recurrent budget
o Rate of commitment and disbursement of the investment budget.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and
reasons/justification

The PDOs were not revised.

1.4 Main Beneficiaries

At the local level, the primary beneficiary group (affected mainly by component I of the project) was
the population living in the catchment areas of the hospitals originally targeted, which was estimated
at 7 million persons. The project would provide this population with better access and improved
quality of health care services.

Also, the personnel of the project hospitals (both managerial and medical staff) would benefit from the
project as a result of a better work environment, including new facilities and equipment, and training
as well as adoption of new management tools that would allow efficient use of resources and hospital
autonomy.

At the national level, the MOH, and the population at large, were also to benefit from the project, as it
would trigger nationwide hospital reform (component I), and implement and develop new financing
mechanisms that would mobilize additional resources for the sector and increases health insurance
coverage (component II).

1.5 Original Components (as approved)

The three original components of the project were closely linked and interdependent. The new
financing mechanisms would have a significant impact on hospital autonomy, and improved policy
and decision-making capacity in the MOH would be essential to the long term sustainability of
hospital management and sector financing reforms:

• Component I: Strengthening hospital management and improving service quality in 14 hospitals

(total estimated cost: US$62.5 million). Improving hospital performance would be achieved by
strengthening hospital strategic planning capacity and introducing organizational and management
tools, procedures and information systems needed for decision-making and resource-allocation

7
 processes. Improving the quality of health care in selected hospitals would be realized by
defining and implementing norms for the organization and delivery of clinical and other services,
establishing quality control mechanisms, implementing staffing norms and providing training,
rehabilitating facilities, and providing medical equipment.
• Component II: Improving health sector financing (total estimated cost: US$1.7 million) by
developing a National Health Insurance Scheme (NHIS) with mandatory enrollment for
employees in order to increase health insurance coverage from 15% to 30% of the population and
developing mechanisms to ensure health care for the poor.
• Component III: Strengthening the MOH institutional capacity (total estimated costs: US$1.8
million) by assisting the MOH in performing its new functions in the context of the
Regionalization Law and implementing its sector strategy as well as providing it with the
management and data tools for policy formulation and decision-making.

1.6 Revised Components

In July 2003, the GOM requested the Bank to cancel 18.0 million Euros, amend the project description,
and extend the project closing date by three years to December 31, 2006.

The justification for this request included slow disbursement and delayed implementation of the
project components, particularly the hospital reform program. The hospital renovations had to be
phased in for each hospital, starting with one section and then moving to another in order to minimize
disruption of services to the population, the additional time required had not been originally foreseen.
Moreover, there was a need for several prerequisites such as the Hospital Development Plans (HDPs)
and Management Tools, which were not completed due to the delay in selecting the technical
assistance.

In October 2003, the project was restructured and approved by the Regional Vice President. The
PDOs, however, were not changed; only the description of the first component was modified to read:
“Strengthening Hospital Management and Improving Hospital Service Quality Development and
implementation of a model for upgrading Project Hospitals through: (i) the introduction of new
management tools and procedures in about 14 Project Hospitals; and (ii) the modernization of
infrastructure and equipment in about 5 Project Hospitals.”

The project implementation plans for the extension phase indicated that the HDPs would be developed
for the 14 hospitals and that the technical assistance (TA) would support the introduction of the core
management tools in the 5 hospitals receiving infrastructure improvements and equipment.

The description of the other components and the key performance indicators remained unchanged but
the target indicators were refined. The project hospitals were changed from 14 to 5 hospitals.

1.7 Other significant changes

There were two other changes associated with project restructuring in October 2003:

• The extension of the project closing date for three years from December 31, 2003 to
December 31, 2006. The purpose of the extension was to provide adequate time to complete
the introduction of management tools and physical renovations and equipping of the five
hospitals.
• The technical assistance contract was extended for an additional two years to fully integrate
the interventions in all 5 hospitals, and strengthen institutional capacity.

8
2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

The project concept note was approved in April 1994. The appraisal was conducted in November
1997. The project was approved by the Board in December 1998 and became effective in November
1999. This is more than five years from concept to effectiveness. The project appraisal document,
however, captured to a great extent the changes in the political, economic and sector environments and
the team was able to adapt project design to the evolving sector context and government strategic
directions.

Moreover, the background analysis and the rationale for the Bank’s intervention were sound, and the
lessons learned from the Health Development Project, the Health Sector Investment Project, and the
Basic Health Project/BAJ were incorporated in the design of this project. However, many of the
lessons learned from previous projects were not fully applied to this project.
In terms of Quality at Entry (QAE), the project development objectives and the design of the
components at the outset were in line with both the Government and Bank strategies. The improved
basic health services realized under the BAJ encouraged the Government to proceed with the Bank in
improving the curative services at the secondary hospital level. In addition, political commitment for
the expansion of health insurance coverage was reflected through the preparation of a draft law in
1995 to increase formal health insurance coverage from 15% to 30% of the population. Moreover, a
new Regionalization Law was promulgated in 1997, which provided the framework of the
regionalization activities envisaged under Component III of the project.
However, neither the Government nor the Bank was realistic in terms of the timeframe needed to
implement such a complex reform program and such ambitious objectives; the risks were also
underestimated. Improving efficiency and quality in 14 hospitals was not realistic, particularly in light
of implementation readiness. At effectiveness, the implementation plan and the procurement
packages for the first year were not ready. It took almost one year to select the TA for hospital reform
primarily due to a lack of appreciation by the MOH of the role to be played by the TA. As a result,
the contract was signed in 2001 and the TA was not mobilized until early 2002. Project management
structure and implementation arrangements could have been more effective; the creation of a hospital
reform unit (Unité de la mise en oeuvre de la réforme - UMER) within the Directorate of Hospital and
Ambulatory Care reinforced the need for better coordination between hospitals, health district offices,
and the central ministry. Similarly, the project objectives related to improving health sector financing
and strengthening MOH policy and strategic planning were ambitious given the political climate at the
time, particularly for expanding health insurance coverage. The objective could not have been
realistically achieved with an allocation of only US$1.8 million for TA and training, which
represented only 2.5% of the project budget. In addition, the TA focused mainly on supporting
Component I with insufficient support to ensuring coordination between the three components.
Project readiness was also affected by the lack of an Operations Manual, which was only finalized in
2001. Finally, the lack of a monitoring and evaluation plan and system was a major weakness.
In retrospect, the ICR team is cognizant of the fact that many of the political economy factors were
difficult to identify at appraisal. However, project readiness could have been further strengthened at
the outset of the project.
The QAG did a QAE review of this project and it was rated satisfactory.

9
2.2 Implementation

The overall rating for project implementation is Moderately Satisfactory. The project was
implemented at two different speeds: before and after restructuring. From November 1999 to
December 2002, the project was characterized by slow implementation progress, reflected by a low
disbursement rate of 6.5%. The project focused on providing high caliber TA as part of the Bank
team to assist the government in the reform process, working with the government on getting the TA
on board, and the creation and strengthening of the Project Unit (Unité de Suivi du Projet - USP).
Following the 2003 restructuring, project implementation picked up and significant progress was
made by the revised project closing date. The assessment of project implementation is summarized by
component below.

Implementation of Component I is rated Moderately Satisfactory. There were significant delays in the
start up of this component, due to the multiplicity and complexity of the activities to be undertaken.
The hospital reform unit, UMER, was created in late 2000 to coordinate this component and to serve
as an interface between the central level, the regions and the 14 project hospitals as well as the TA. In
addition, the selection of the TA team to provide support on the reforms took longer than expected,
nearly 20 months, due to the political environment and procurement procedures. As a result, the TA
team only began actual work in January 2002. Following restructuring, implementation proceeded
broadly on two pillars: (i) physical improvement of hospital infrastructure through investment in
building and medical equipment; and (ii) development and introduction of modern management tools.
Almost all planned hospital investments in buildings and medical equipment were completed by the
project closing date but the introduction of management tools was fragmented. By project closing, the
project hospitals provided a potentially successful model for replication. The cost of this endeavor
was about US$9.0 million per hospital for infrastructure improvements, as well as the modernization
of hospital management tools for improvements in quality of care. The government agreed with the
European Investment Bank to upgrade an additional 20 hospitals and to introduce the management
tools developed under the Bank-financed project. Nevertheless, the sustainability of the hospital
reform component remains a challenge for these hospitals, particularly in the absence of any
indication that additional financial resources will be mobilized whether from a commensurate increase
in the MOH budget for maintenance or from implementing the health financing scheme for the poor
(Régime d’assistance médicale pour les économiquement diminués - RAMED). It is to be noted that,
although the MOH budget has been steadily increasing by about 10% annually since 2003, it has
remained focused for the most part on improving the primary health care services and the drug supply
in hospitals.

Annex 10 provides additional information on the status of the implementation of management tools
and the status of each hospital at project closing.

Implementation of Component II is rated Moderately Satisfactory. Progress was minimal during the
first couple of years of the project; however, several legal frameworks and decrees have been
approved in the last 2-3 years to increase insurance coverage for the population. Progress was marked
by the ratification of the Framework Law on Mandatory Health Insurance (Assurance Maladie
Obligatoire – AMO) in August 2002 (Loi-Cadre 65-00) that also established the National Health
Insurance Agency (Agence Nationale de l’Assurance Maladie–ANAM). However, it took almost three
years to initiate the implementation of the AMO scheme with the appointment of the ANAM Director
in June 2005 followed by adoption of nine new government decrees related to the establishment of the
AMO in August 2005. The publication of these decrees made the AMO effective as of September 1,
2005. Subsequent decrees were issued in 2006 that resulted in the extension of the health insurance
coverage to new groups of the population. By project closing, it was estimated that the AMO was
covering about 25% of the population, including the coverage of new groups of professionals and
informal working groups through new schemes; implementation of RAMED was postponed in order
to prepare additional studies to better assess the political, fiscal and economic implications.

10
Implementation of Component III is rated Moderately Unsatisfactory. The implementation of this
component focused primarily on the completion of two critical studies. The study on the
“Organizational and Technical Audit” of the MOH was completed in 2005, and the other study on the
comprehensive “Human Resources Strategy” for the MOH, was completed in 2006. In August 2005,
the MOH launched the regionalization process in the pilot area referred to as the “Oriental Region” by
issuing the Ministerial Circular No. 3 that created a new regional health structure, which was part of
the budgetary support conditionality of the European Commission (EC) project. The regionalization
aspect of the reform program, however, was limited to the deconcentration of planning and
management of some functions and fell short of the envisaged devolution of broader functions such as
human resources management and financial autonomy.

There were several factors either under the control of the Government or the Implementing Agencies
that influenced the implementation of the project. These are discussed below.

Factors subject to the control of the Government. The key factor that influenced the project
implementation at that level was the Government commitment to the different reforms, which was not
consistent over time and across the different Government agencies, particularly for health insurance
and regionalization reforms. For the former, progress was only made following the creation of a
working group at the Prime Minister’s level in 2001. A "Committee of Experts" appointed by the PM
steered the preparation of a number of studies and draft legislation on the mandatory health insurance
scheme (AMO) and the health financing scheme for the poor (RAMED). However, the weak
institutional capacity was another binding constraint as it took almost three years to initiate the
implementation of the AMO scheme after the ratification of the Framework Law in 2002. Although
the proposed laws on both AMO and RAMED were to be submitted to Parliament, the Government
proceeded with only the AMO, and the implementation of RAMED was postponed in order to better
assess the political, fiscal and economic implications. The coordination of donor support was another
key factor as exemplified by the EC-funded project (PAGSS) that was the main vehicle to field test
and implement the regionalization aspect of the reform program, which resulted in the creation of the
“Oriental” health region. However, the pace of the regionalization reform was extremely slow and
limited in scope primarily due to: (i) the political economy surrounding the balance of power between
the central level and the regions in the allocation and management of resources; and (ii) the difficulty
of decoupling the health sector from other sectors and the civil administration code.

Factors subject to the control of the implementing agencies. The delayed implementation of the
investment plan was attributed to a variety of factors, including: (i) delays in the procurement of key
contracts; (ii) unexpected technical issues that delayed construction (e.g., water found below the
construction site at Settat); (iii) cancellations of works with some contractors due to poor performance
and re-awarding of the contracts; and (iv) lack of synchronization of the procurement of medical
equipment with completion of civil works. As for the management tools, the implementation was
complicated by the MOH failure to provide sufficient local counterparts to disseminate the
management tools to the other 9 hospitals. Lack of qualified personnel was a key binding constraint
to successful implementation and adoption of the tools. Other factors include: (i) lack of coordination
between all the project hospitals; (ii) differences in the pace of progress between hospitals; and (iii)
frequent changes in hospital management personnel (e.g., Settat). On the other hand, the quality of the
overall TA financed under the project was high and played a key role in implementing the hospital
reforms and guiding the health insurance reforms.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

The rating for the Monitoring and Evaluation (M&E) system was Unsatisfactory as it was one of
the weakest and most poorly implemented parts of the project. By project closing date, the M&E
system provided little information on project impact, primarily as the indicators (outcome and

11
intermediate) were confined to Component I of the project and were inconclusive in terms of
improvements that can be linked to project interventions.

The M&E system at effectiveness was not clearly defined, the performance indicators were too broad,
and a dedicated M&E strategy and/or system was not in place at effectiveness. The Project Appraisal
Document was not clear enough about the responsibility, the mechanisms or the procedures of
monitoring and evaluating the project. Many of the performance indicators were poorly defined and
had neither baseline nor target values. Until project restructuring in 2003, there was no M&E system
in place. Moreover, there was no project evaluation planned or conducted. Only a provider
satisfaction survey was conducted for the staff of the five hospitals. There were no performance
indicators monitored for components II and III.

Overall, the M&E system suffered from project “implementation fragmentation”. As a result, the
M&E focused on monitoring the progress in hospital physical infrastructure and the TA deliverables
(reports and studies) and to a lesser extent on the development and institutionalization of the
management tools, the expanded coverage of health insurance, particularly for the poor, and the
decentralization of MOH responsibilities to the regions. The linkages and interdependence between
the three project components were weak.

2.4 Safeguard and Fiduciary Compliance

Environmental Management is rated Moderately Satisfactory. The project environmental rating was
assessed as B due to the nature of the project design and the need for an adequate waste management
plan. The hospital management tools, developed under the project, included a hospital waste
management plan. In addition, an environmental analysis was carried out as part of the hospital
rehabilitation/construction program. Moreover, a dedicated environmental service was established in
the hospitals to manage the process of waste management. In parallel, the MOH worked closely with
WHO and the European Commission on establishing guidelines to manage hospital waste, and to
ensure that hospitals were accredited. The assessment concluded that waste management plans were
for the most part in place, but weaknesses were noted with regard to training of staff on environmental
safeguard issues within the hospital. In addition, the issue of transport of hospital waste to local
community dump sites was an issue that was being discussed at the regional level in order to mitigate
the risks of wider contamination. A number of sterilizing grinders were purchased under the project,
but were not fully operational until the last year of the project. In addition, the MOH worked closely
with the Ministry of the Environment in the last year of the project, and a specific decree was
promulgated on Medical Waste Management, including the disposal of pharmaceuticals.

The social aspects are rated Unsatisfactory. The project proposed a participatory approach during
the different phases of the project. However, given the extensive delays in project implementation
noted earlier in this report, participation was limited. One of the main methods was to carry out a
beneficiary assessment. This was never carried out, except for an assessment of health personnel
perceptions following the introduction of management tools in the targeted hospitals. In general,
satisfaction was slightly above average, but it was also difficult to measure as the survey was taken at
the time when construction had just been completed, and the services were not fully running. It is to
be noted that hospital staff had to live with much disruption caused by the rehabilitation/construction
program in the past two years. Moreover, dissemination of the hospital reform agenda to the public
came rather late in project implementation.

Financial management was Moderately Unsatisfactory. Much effort was made during the
implementation phase of the project to set up a financial management system in the Project Unit (PU).
However, the system was not fully utilized. In addition, Morocco pre-finances expenditures, or
obtains reimbursement from the Bank into their special account, which led to difficulties for the PU in
obtaining expenditure information. Disbursements were slow due to internal procedures, but

12
increased during the last two years of the project after Bank missions revealed a number of contracts
that had not been previously claimed for reimbursements. Major efforts were made to clear backlogs
and improve financial management flow. Despite the capacity building that took place during
implementation, and the systems purchased, it is unlikely that the PU will be sustained for reasons of
pragmatism, as the PU was set up outside of the MOH, although the personnel are now well versed in
Bank procedures. The 2005 audit report was received by the Bank, and the 2006 audit report is
expected to be received by end June 2007.

Procurement management was Moderately Satisfactory. Post-reviews revealed some procedures

contrary to Bank guidelines (one envelope system for consultants), and a lack of awareness of Bank
guidelines with the result that National Procedures were applied. In addition, procurement was
affected by the compartmentalization of the MOH Departments; slow implementation of procurement
activities due to lengthy national procedures; review processes by the Bank; and internal payment
processes. Nevertheless, the five hospitals under renovation/construction and associated equipment
were delivered by the project closing date. In addition, the staff of the PU provided regular
supervision in the field, and training to regional staff in management following the mid-term mission.

2.5 Post-completion Operation/Next Phase

Given the limited scope and fragility of the hospital reform achievements, there will be a need to
consolidate and sustain the gains, which may be attained through the new European Investment Bank
(EIB) funded project that aims at expanding the reform to an additional 21 hospitals. It is important
however, to focus first on the five project hospitals and formally involve the staff in the efforts to
extend these reforms to other hospitals, particularly given that the experience gained from the project
is both pertinent and practical. While some of the PFGSS hospital directors are involved in the new
MOH project as “experts”, there should be a systematic plan in place. Additionally, the EIB funded
project will mobilize foreign TA to accompany the reforms in the new hospitals. Given that the
management tools were not fully operational, there is a risk of the EIB TA developing new tools
instead of capitalizing on previous efforts. The MOH is aware of these risks and is planning to
reinforce the gains of the PFGSS in the five hospitals by relying on the existing tools and improving
the processes before they are put into use in the selected hospitals. Furthermore, there was little effort
made to allocate Operation & Maintenance budget to ensure the sustainability of the project
investments.

On the other hand, in the area of health financing reform, the extension of health insurance coverage is
likely to be sustained but the lack of such coverage for the poor may erode the few gains made in
hospital reforms due to the fact that the poor constitute more than 70% of the users of public hospital
services.

As for the institutional capacity in support of the regionalization process as well as the reforms in
general, the project helped in the transformation of a cadre of MOH staff at the central and hospital
levels, who may be considered as a driving force for the reform but do not constitute a sufficient
critical mass to sustain it.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The relevance of the project objectives, design and implementation is rated Moderately High. The
PDOs remain relevant to the current health sector situation. Increasing the efficiency of the health
system, particularly public hospitals that consume a large share of the MOH budget, and improving
the quality of health services together with extending health insurance coverage and decentralizing
some management functions and responsibilities, are key objectives that continue to feature

13
prominently in the country’s national programs and the human development pillar of the Bank’s
assistance strategy. Moreover, the recently approved Health, Nutrition, and Population (HNP)
Strategy of the Bank stresses the increasing importance of dealing with health financing systems in
addressing the growing burden of diseases due to the health transition.

The project design was quite strong on the TA aspects, which were covered not only through the
project but also through Bank supervision missions. Most of the TA reports were of high quality and
very relevant to the reform challenges that continue to face the Moroccan health system.

Project implementation pace was extremely slow given the complexity of the reforms. The
institutional arrangements could have been more effective; there was an overemphasis on the physical
investments, and at the beginning of project implementation, the linkage of the three components was
weak but improved with time.

3.2 Achievement of Project Development Objectives

The overall achievement of the Project Development Objectives is rated Moderately Unsatisfactory.
At the outset, it is important to stress that the project performance indicators established at project
appraisal and after restructuring were not sufficiently monitored, which made it difficult to assess
project achievements. In addition, given the delays in implementation, the indicators are also affected
by the fact that hospital construction was not completed until the revised project closing date. An
additional effort was made during the ICR preparation to collect and analyze new information in order
to assess project performance, particularly for Component I, given that it constituted more than 90%
of project financing. The assessment of each PDO is detailed below.

The achievement of the objective of “Improving efficiency and quality of public hospital services”.
Despite the functionality of some of the upgraded hospital services and the introduction of new
management tools in the five project hospitals, the project only partially achieved the stated DO
related to improved efficiency and quality in these hospitals.

Since the investment program was completed by project closing and most of the upgraded services
were not fully operational, it was not possible to assess the efficiency or the quality of the upgraded
services. In fact, most of the utilization indicators deteriorated in 2005 (data were not available for
2006). This was expected as many of the critical services in project hospitals were affected by the
ongoing civil works. For example, the average hospital occupancy rate did not improve as it remained
at about 57% and the number of hospital days was significantly reduced. Similarly, the full
implementation of the package of management tools was delayed and not uniform across the 5 project
hospitals.

In terms of provider satisfaction, a survey concluded that there was an improved perception of
providers regarding the upgraded services and working conditions (64%) as well as the management
system (56%). However, the ICR team did not find the survey methodology robust enough to support
the survey findings. For example, some of the services surveyed were not fully operational at the time
of the survey. Also, there was a planned “Beneficiary Survey” which was not conducted.

It is worth noting that the project succeeded in improving the physical infrastructure in the project
hospitals, introduced new clinical services, and increased hospital capacity. However, all could not be
objectively measured at project closing. Additional information was collected during the ICR
preparation in order to assess the project outcomes beyond what was provided in the M&E system.
To this effect, the team visited another five hospitals outside of the project interventions (El-Jadida,
Ibn Zohr in Marrakech, Ibn AlKhatib in Fès, Essalama in Kalaa Segharna, and Tétouan) and noted
significant differences in the way the hospital managers and medical staff interacted, planned, and
managed the hospital functions. This transformation in the culture of “managing public hospitals” in

14
Morocco was an important project outcome, which was not adequately evaluated. It is therefore
highly recommended to conduct a post completion evaluation in two years to assess the actual impact
of the project in terms of efficiency and quality.

The achievement of the objective of “introducing new financial mechanisms for the health sector”. At
the outcome level, the stated DO was partially achieved as there was an increase in the population
covered by health insurance, mainly for the independent workers, from 15% to about 25%. The health
insurance scheme covering the poor (RAMED) was not implemented at the time of project closing,
which impacted the ability of hospitals to better manage costs and the provision of services.

The Government passed the Law 65/00 in 2002, which established the mandatory health insurance
(AMO) program and the program for the poor (RAMED) as well as the national health insurance
regulatory agency (ANAM). This was followed by a series of by-laws and decrees in 2005 and 2006
to operationalize the ANAM and actually implement the first part of the AMO for independent
workers.

The project outputs in terms of TA and studies contributed to the critical thinking and reflections as
well as the strategic considerations related to the implementation of the health insurance reform that
started with an analysis of the draft law (Bitràn Associates, 2002) and ended with the series of 7
reports on establishing the ANAM (Soucy et Partenaires, 2006). In addition, the EC continues to
work with the government and specifically the MOH on proceeding with health insurance issues.

The achievement of the objective of “Strengthening the MOH’s policy formulation and sector
management capacities”. The achievement of this objective was extremely difficult to assess as the
indicators identified at project appraisal were not systematically collected. More importantly, the
indicators were inadequate to monitor “strengthened policy and decision making capacity”. Despite
the inputs from the TA financed under the project, the products were only available late in project
implementation and recommendations were not validated in time to have any clear impact. On the
other hand, the government took modest steps toward regionalization, primarily through the EC-
funded project (PAGSS), with the establishment of the first health region in August 2005. Subsequent
regionalization is underway, albeit slowly, with other donors involved in the sector. It was noted that
two more “health regions”were created in late 2006.

3.3 Efficiency

The project aimed at improving health system efficiency by gradually increasing allocations to cost
effective interventions, upgrading the human capital base and improving labor productivity as a result
of raising the health status of the population through expanding health insurance coverage.

It is worth noting that more than 90% of the project costs were to finance hospital investments, which
were completed only by the project closing date, and the full range of the health services affected by
the physical infrastructure improvement was not offered. It was therefore not practical to conduct any
efficiency analysis to assess whether the costs involved in achieving project objectives were
reasonable in comparison with both the benefits and with recognized norms particularly in the absence
of hospital utilization data. It is therefore recommended to conduct such analyses in two years (as part
of the post completion evaluation) when the full range of improved services would be provided and
utilization data would be available.

3.4 Justification of Overall Outcome Rating

The overall outcome rating is Moderately Unsatisfactory. By the project closing date, at the outcome
level, most of the staff of the five project hospitals were satisfied with the upgraded facilities and
equipment. The PEH was introduced in all 14 hospitals, and budget management based on results was

15
introduced. On the other hand, there was little data to assess improved quality or increased efficiency
(except for the qualitative data collected at the hospital level). At the output level, most of the
management tools were developed and introduced in the five hospitals but were implemented
unequally. Also, the utilization indicators had significantly dropped due to the fact that most hospitals
were still under construction up to project closing. The project objectives, however, remain relevant
and a post completion assessment of the project impact in two years may provide positive results,
given the improved physical infrastructure, increased hospital capacity, and the ongoing expansion of
health insurance coverage.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development. The project was expected to have
a significant impact on improving social equity through better allocation and targeting of public health
resources, thus increasing access of the poor to health care. Beneficiary assessments were planned to
be carried out in order to assess the social impact of project activities but were not conducted.
Nevertheless, it is expected that many of the poor population will benefit from improved hospital
services, particularly when the health insurance coverage for the poor (RAMED) is implemented. A
post completion assessment in two years would therefore be critical to assess the project social impact.

(b) Institutional Change/Strengthening. The project had a positive impact on institutional

development, particularly at the central level, in understanding and managing complex reforms related
to public hospitals and health sector financing: preparation of hospital development plans which are
mandated for all hospitals (including the recent passage of the law on Hospital Reform); the
introduction of modern hospital management tools; the creation of the UMER to coordinate and
manage complex hospital development projects, which will continue with the EIB funded project; and
the creation of the communication units in the project hospitals, which strengthened the outreach
activities and bridged the gap between hospital management, hospital staff and the community.
Similarly, in health financing, the project TA contributed to the development of the organizational
structure of the ANAM and in strengthening its capacity as well as supporting the MOH/DRSF in
conducting complex studies, e.g., the actuarial studies.

(c) Other Unintended Outcomes and Impacts (positive or negative). A positive unintended
outcome of the project was the development of new health insurance schemes to cover the
professional and independent workers (e.g., Inaya) under the mandatory health insurance program. In
addition, the reform process engaged national stakeholders to openly debate the future of hospital
reforms.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

N/A

4. Assessment of Risk to Development Outcome

The risk to development outcome is Moderate. This is explained by the fact that the project
outcomes, although limited, are subject to political economy forces that are outside the program
sphere of influence, particularly for health insurance coverage and regionalization. On the other hand,
the hospital management tools developed by the project are likely to be institutionalized by the new
Hospital Reform Law, provided this is coupled with the mobilization of significant human and
financial resources, particularly for operation and maintenance for the large hospital investments made
under the project.

16
5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry
The Bank performance in Ensuring Quality at Entry is rated Moderately Satisfactory. At the outset,
it is important to indicate that this project was designed as part of a wave of “health sector reform”
projects that were undertaken in many countries (particularly LAC and ECA), with ambitious
objectives, particularly on the health financing side. In general, there was little experience in
reforming the health sector in the developing world and each of these projects had to navigate through
its own political, economic and social environments. Inevitably, there was a learning curve. This
project was no exception. Given the available information at the time, the Bank mobilized a balanced
and skilled team. The project design and proposed interventions were also technically sound.
However, the Bank could have better assessed the complexity of the interventions involved in
introducing hospital management tools which hinged on health insurance reform and the availability
of qualified and skilled human resources.

The QAG assessed the Quality at Entry (QAE) in April 1999 and it was rated Satisfactory. The key
areas of major concern for the QAE panel were the clarity of project development objectives and the
readiness for implementation (operations manual, procurement packages for the first year, etc). In
addition, the M&E was a major weakness at entry. The ICR team concurred with the QAE assessment
that readiness to implement was weak, primarily due to the lack of an operations manual, procurement
plan, and an M&E system, areas in which the Bank has ample experience.

(b) Quality of Supervision

The Bank performance in Quality of Supervision is rated Moderately Unsatisfactory. The
supervision of the project focused on inputs and processes as well as fiduciary aspects. While this was
reasonable in the first couple of years of the project, supervision could have focused more on
development outcomes, inter-linkages between the three components and the broader health policy
environment (except for the coordination with the EC) prior to and post project restructuring (2003).
Given the delays encountered in implementing project activities, the focus was on launching the
technical aspects of the project (management tools, infrastructure, key studies). The Bank team had a
strong skills mix and included qualified experts in different areas such as hospital management and
health insurance. However, the recommendations of the Bank team were not in line with the pace of
governmental reforms and there was an unsustained effort to require a robust M&E system. More
importantly, the candor of reporting in the early phases of project implementation was weak until the
latter part of the project when progress was being made on civil works, procurement of medical
equipment, and completion of key studies. Nevertheless, the mid-term review and restructuring were
missed opportunities and should have been more focused on DOs and project scope given the
information available at that point with regard to the time needed to complete the introduction of
management tools. It was only in the last year of the project (2006) when the Bank started to examine
how project interventions fit in the broader health sector strategy but it was too late to induce by that
point any substantial change to the project course.

The QAG assessed the quality of supervision in September 2004 and it was rated Moderately
Unsatisfactory. The QAG noted that some of the early findings of the Quality at Entry QAG seemed
to have become major challenges during implementation, largely centered around readiness for
implementation, M&E and institutional and technical capacity of implementing agencies.

(c) Justification of Rating for Overall Bank Performance

The overall rating for Bank performance is Moderately Unsatisfactory. The Bank’s performance
during preparation was reasonably adequate with regard to the technical aspects of the project design
but was inadequate in terms of readiness for implementation. The supervision, however, was weak as
it focused on monitoring the inputs and managing the processes without adequate attention to the

17
development outcomes and the inter-linkages between the project components. More seriously, the
Bank failed in proactively taking action and missed several opportunities, e.g., during the mid-term
review and restructuring, to change the project course in order to achieve more realistic objectives.

5.2 Borrower Performance

(a) Government Performance
The Government performance is rated Moderately Satisfactory. Despite several setbacks (both
political and institutional), the Government, particularly the MOF and the MOH (as the entity
responsible for health policy and implementing agency for the project ), stood by its reform program.
However, it underestimated the time and institutional capacity needed to introduce major changes in
hospital, regional and central management, including financing of the reform. The regionalization law
was issued in 1997 and the health insurance law was drafted in 2000. But it took almost 3 years
between the ratification of the health insurance law in 2002 and issuing its by-laws in 2005 as well as
the operationalization of the ANAM. In addition, some efforts were made to address the fundamental
issue of human resources which has impeded the effectiveness of the health sector; however, more
rigorous interventions are needed. In general, the enabling environment was lacking due to weak
policy and institutional frameworks. All these efforts require long term commitments, and the
government continues to push ahead on the reform program and has partnered with the EIB in
upgrading additional hospitals and the dissemination of the management tools introduced under the
project. A very recent and positive aspect is the issuance of the decree on “Hospital Reform” which
stipulates the requirement for a PEH in all national hospitals as well as other important aspects that
will further enhance the hospital reform process. The one aspect that is still not resolved is the health
insurance scheme for the poor (RAMED) which is needed to reduce poverty and inequity.

(b) Implementing Agency or Agencies Performance

The performance of the implementing agencies is rated Moderately Unsatisfactory. The key
implementing agency of the project was the MOH, including the different departments responsible for
the three components and the project-created units (USP and UMER). Despite the commitment of the
MOH departments and project units to the reform process, implementation readiness was weak, and
efforts fragmented. There was lack of coordination between the three project components, which
required a higher convening MOH authority to support the USP. While there was some consultation
with local authorities regarding hospital reform interventions, there was little consultation with the
broader stakeholders and the public until much later in project implementation. Also, it took a long
time to resolve implementation issues, particularly with regard to the management of the hospital civil
works. On the other hand, the management of the fiduciary aspects was adequate and project
covenants were realized but with delays. The performance, however, improved in the last year of the
project, particularly with regard to the UMER, as the learning curve increased.

(c) Justification of Rating for Overall Borrower Performance

The overall performance of the Borrower is rated Moderately Unsatisfactory. The proposed reforms
and project interventions constituted uncharted waters for the Government and MOH personnel. The
learning curve was steep, and momentum was slow, particularly due to the lack of skilled human
resources and the lack of effective coordination between the different departments of the MOH,
despite the government’s commitment. In addition, two years were lost (2000 and 2001) due to
government inaction in launching project activities.

6. Lessons Learned
The project provides good lessons for similar future operations, which are summarized below.

• Health sector reform is complex and long-term in nature. It is becoming increasingly recognized
that the objectives of the health sector reforms envisaged in the mid 90’s were overly ambitious
and could not possibly be achieved in the life of a five-year project. A more incremental
approach with a clear roadmap and benchmarks may be more practical.

18
• Government commitment is necessary but not sufficient for engaging in a health sector reform
program. Despite Government commitment, it took a long period for actions to materialize
because of weak institutional capacity to carry out the reforms, which was coupled with an acute
shortage of adequately qualified personnel. This should have required an in-depth institutional
analysis and an organizational development plan to accompany the reform.
• The institutional arrangements are critical in the success of complex projects. The coordination of
the project components and activities was a key challenge. The cooperation between the different
MOH departments, the regions and project units was suboptimal. The institutional arrangement in
general led to project fragmentation. The office of a higher convening authority would have been
more effective in ensuring this level of coordination.
• Investment lending may not be the best instrument for inducing major sector reforms. Using an
investment lending instrument for a project with both huge physical investments as well as
ambitious reforms would inadvertently lead the implementers to focus on the physical
investments. Other approaches and instruments such as a Development Policy Lending, in
combination with technical assistance lending, could be more appropriate.
• Hospital construction and/or rehabilitation is very complex and takes a long time. Experience
from this and other similar projects has demonstrated that hospitals are complex construction
projects, particularly when they are rehabilitated, as services continue to be provided while civil
works are going on, which usually slows the pace of implementation. For hospital rehabilitation,
it is judicious to have the architectural drawings ready before project effectiveness.
• Project readiness is a good predictor of successful project implementation. The weak project
readiness in terms of lack of a good M&E system, relevant performance indicators with baseline
values, procurement packages, and operations manual should have signaled major readiness
issues. Given the Bank focus on results, the test for a potentially successful project would be to
have performance indicators with measurable “baseline” values at appraisal.
• Proactive interventions are critical in correcting the course of the project. The mid-term review
and project restructuring were missed opportunities and could have been used more effectively in
changing the course of the project by intervening earlier and more strategically to revise the PDOs
and the implementation scope of the project.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

The MOH has commissioned its own external evaluation of the project achievements and impact, and
this evaluation report is expected to be completed in the fall of 2007. In the meantime, the
Government submitted its initial comments on the French version of the ICR, which are attached as
Annex 7. While noting the importance of the ICR, the Government indicated that it would be
premature to evaluate the outcomes of the project at this time, and emphasized the need to undertake
further in-depth examination of the project by the different central and regional MOH departments.
The Government therefore requested to postpone their submission of more comprehensive comments
on the project achievements until the external evaluation is completed.

(b) Cofinanciers N/A

(c) Other partners and stakeholders

The European Investment Bank is supporting the hospital reform program with a new project that is
starting in 2007 and targeting 17 hospitals.

The EIB indicated that all the three original components of the WB financed project (PFGSS) were
highly relevant to the country and sector. Although Component I had the most direct bearing on the
EIB's project, the other two components clearly had a wider beneficial effect, as well as providing
important support to Component I.

19
Some of the key hospital management tools developed under the PFGSS included: (i) the Hospital
Development Plan (PEH), (ii) the financial management accounting model, (iii) the costing and billing,
(iv) the management and technical hospital reorganization, (v) the planning and management of
human resources (GRH), (vi) the quality and clinical audit, and (vii) the routine maintenance
programs. The EIB assessment is that the first five tools have been developed and implemented in
one of the five project hospitals, some of them were implemented in more than one, and all five were
implemented in Agadir. Moreover, the quality aspects were somewhat less developed. Finally, there
will be a need for further work to integrate all these tools and scale them up to other hospitals.

Given the availability of these tools, the EIB is planning to provide TA to support the scaling up of
these seven tools in all or a subset of the 17 hospitals in the EIB project in parallel with the physical
improvement.

20
Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Actual/Latest
Appraisal Estimate Percentage of
Components Estimate (USD
(USD millions) Appraisal
millions)
STRENGHTENING HOSPITAL
MANAGEMENT AND
IMPROVING QUALITY OF
61.30 35.58 94.8
SERVICES

IMPROVING HEALTH SECTOR

FINANCING
1.87 2.20 2.8

STRENGTHENING POLICY
AND DECISION-MAKING
CAPACITIES 1.54 1.80 2.4

Total Baseline Cost 64.71 39.58

Physical Contingencies
3.64 0.00 0.00
Price Contingencies
7.75 0.00 0.00
Total Project Costs 76.10 39.58
Project Preparation Fund 0.00 0.00 .00
Front-end fee IBRD 0.61 0.00 .00
Total Financing Required 76.71 39.58

(b) Financing
Appraisal Actual/Latest
Type of Estimate Estimate Percentage of
Source of Funds
Cofinancing (USD (USD Appraisal
millions) millions)
Borrower 0.00 0.00 .00
International Bank for Reconstruction
66.00 39.58 .00
and Development

21
Annex 2. Outputs by Component
Component I: Hospital Reform
Output type Output indicators
Development and
implementation of a
management information
system (SIGHO) –
[percentage implemented]
Number of hospitals
where a PEH has been set-
Management tools up and validated
introduced in the
project hospitals Number of hospitals with
human resources
management units
Number of hospitals with
an accounting and
financial management
system
Introduction of Percentage of hospital
maintenance plans budgets allocated to
in project hospitals maintenance
Percentage increase in
patients in the five project
hospitals
Average occupancy rate
Improvement of
utilization rates of
the project
Percentage increase in
hospitals
number of imaging exams
in the project hospitals
Percentage increase in the
number of lab tests in the
project hospitals
Physical Safi (first phase): surgery
rehabilitation and rooms, central
provision of sterilization, kitchen and
equipment in administration.
project hospitals
Safi (second phase):
radiology, intensive care,
ER, external work
Agadir (first phase):
surgery rooms, central
sterilization, ambulatory
surgery clinic, radiology.
Agadir (second phase):
ER, intensive care,
pediatric clinic
Meknes (first phase):
radiology, surgery,
sterilization, intensive
care.
Values at
end of Comments
project
100% This percentage was reported by the MOH on the basis
that the MIS was planned in only one hospital. The MIS
was developed and implemented in the pole of
excellence at Hospital Hassan II in Agadir.
14 The PEH was developed and actually implemented in
the five project hospitals and developed for the
remaining 9 hospitals. This was the basic management
tool to be introduced in the target 14 hospitals.
5 The new organizational structure of the project hospitals
included newly developed human resources units. The
staffing and activities of these units varied across
hospitals.
5 The new accounting and financial management system
was introduced in the five project hospitals. However,
the actual implementation and use varied across
hospitals.
6.71% The ICR team found it difficult to comment on this
indicator as there was neither a baseline nor a target
value.
-55.05% Project hospitals were under construction and therefore
services and levels of utilization were significantly
reduced.
57.69% Baseline was 59% and the target value was 70%. The
indicator showed no improvement as the project
hospitals were under construction and therefore services
and levels of utilization were significantly reduced.
-49.28% Project hospitals were under construction and therefore
services and levels of utilization were significantly
reduced.
-53.69% Project hospitals were under construction and therefore
services and levels of utilization were significantly
reduced.
Completed The two phases were fully executed except for the
100%. biology and the intensive care units, which were not
operational by project closing date. The incinerator was
operational. The total cost of investments in Safi was
about US$ 10.6 million. The impact of hospital
improvements on service utilization or quality was not
Completed
possible to assess.
100%
Completed The two phases were fully executed by project closing
100%. date at a total cost of about US$ 11.5 million. Most
services started to operate right before closing except for
the operations/surgery rooms and the central sterilization
Completed unit, which were not operational. The incinerator was
100% fully operational. Improved services started in late
2006, which did not permit an assessment of project
impact on utilization and quality of services.
Completed The two phases were fully executed almost by project
100%. closing date at a total cost of about $13.1 million,
however not all services and equipment were fully
operational such as the intensive care unit and biology
22
 Meknes (second phase):
labs, ER, burnt unit,
administrative unit,
external work
Beni Mellal (first phase):
logistics unit, central
pharmacy, hemodialysis,
radiology.
Beni Mellal (second
phase): ambulatory
medicine& surgery,
intensive care, ER,
maternity, medical
archives, administrative
unit.
Settat (first phase):
surgery, sterilization, and
radiology.
Settat (second phase):
radiology, intensive care,
ER, biology laboratories,
external work
Completed laboratory. The impact on improved service utilization
100% was not therefore possible to assess.
Completed The two phases were fully executed at a total cost of
100%. about $9.4 million, and almost all services started to
become fully functional by project closing date. The
impact on improved service utilization was not therefore
Completed possible to assess.
100%
Completed The two phases were fully executed at a total cost of
100%. about $9.4 million and all units were operational but
barely by project closing date. The impact on utilization
was not therefore possible to assess.
Completed
100%

Component II: Health Sector Financing

Output indicators were not monitored. However, the following outputs were noted by the ICR
preparation team:

• A Framework Law on mandatory health insurance scheme (Assurance maladie obligatoire–

AMO) ratified in August 2002 (Loi-Cadre 65-00).
• Nine Government Decrees related to the establishment of the AMO were published in August
2005. These nine decrees covered a wide range of areas, including the reimbursement
modalities and the medical control, contributions to the CNSS (Caisse nationale de sécurité
sociale) and the CNOPS (Caisse nationale des organismes de prévoyance sociale), the
medical coverage rates for health services under the CNSS and the CNOPS, eligibility criteria
for the AMO, categories of affiliation daily workers covered under the AMO, the financial
organization of the AMO, and the contributions to the CNSS for family coverage.
• The TA financed by the project contributed to a series of technical studies (7 in total), which
benefited the ANAM.
• A number of studies were prepared for the RAMED, including an actuarial study that covered
important elements concerning the definition of the eligible population and its size, the cost of
coverage, and financing mechanisms.

Component III: Health Sector Capacity

Output indicators were not monitored. However, the following outputs were noted by the ICR
preparation team:

• A study on the “Organizational and Technical Audit” of the MOH was completed in 2005.
• A study on a comprehensive “Human Resources Strategy” for the MOH was completed in
2006.
• A Ministerial Circular No. 3 was issued in August 2005, in order to create a new regional
health structure in the pilot area of the “Oriental”.

23
Annex 3. Economic and Financial Analysis
(including assumptions in the analysis)

The project aimed at improving the health system efficiency by gradually increasing allocations to
cost effective interventions, upgrading the human capital base and improving labor productivity as a
result of raising the health status of the population through expanding health insurance coverage.

It is worth noting that more than 90% of the project costs were to finance hospital investments, which
were completed only by project closing date, and the full range of health services affected by the
physical infrastructure improvement was not offered. It was not therefore practical to conduct an
economic or financial analysis to assess whether the costs involved in achieving project objectives
were reasonable in comparison with both the benefits and with recognized norms particularly in the
absence of hospital utilization data. It is therefore recommended to conduct an economic and
financial analyses in two years (as part of the post completion evaluation) when the full range of
improved services would be provided and utilization data available.

24
Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Responsibility/
Names Title Unit
Specialty
Lending

Ferid Belhaj Manager MNCMA Team member

Regional Environmental and
Sherif Arif MNACS Team member
Safeguards Advisor
Rafika Chaouali Financial Mgt. Spec. OPCFM Team member
Claudine Kader Senior Program Assistant MNSHD Team member
Maryse Pierre-Louis Health Lead Specialist AFTHD Task Manager
Daniel Kress Health Economist MNSHD Task Manager
Adviser, Quality and co-
Christian Rey EACIF Team member
finance

Supervision/ICR
Meryem Benchemsi Consultant MNCMA Team member
Mbaye Mbengue Faye Consultant AFTU2 Team member
Jean-Jacques Frère Task Manager MNSHD Project Leader
Claudine Kader Senior Program Assistant MNSHD Team member
Monique Kamphuis Consultant MNSHD Team member
Daniel Mercier Consultant MNSHD Team member
Axel Rahola Economist (Health) HDNHE Team member
Eileen Brainne Sullivan Operations Analyst MNSHD Team member
Eric Andre Tkint de
Sr. Health Specialist. AFTH2 Team member
Roodenbeke

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only)
Stage of Project Cycle USD Thousands (including
No. of staff weeks
travel and consultant costs)
Lending
FY93 1.29
FY94 72.00
FY95 32.76
FY96 18.32
FY97 128.80
FY98 201.53
FY99 42.38
FY00 0.69
FY01 0.00
FY02 0.00

25
 FY03 0.00
FY04 0.00
FY05 0.00
FY06 0.00
FY07 0.00

Total: 497.77
Supervision/ICR
FY93 0.00
FY94 0.00
FY95 0.00
FY96 0.00
FY97 1.80
FY98 0.00
FY99 68.93
FY00 23 103.13
FY01 13 67.90
FY02 5 52.41
FY03 11 72.38
FY04 18 98.54
FY05 25 177.40
FY06 16 106.78
FY07 12 83.76

Total: 123 833.03

26
Annex 5. Beneficiary Survey Results

There was a beneficiary/client satisfaction survey planned but it was not conducted. However, a
survey on personnel satisfaction was conducted towards the end of the project (October 2006). A
summary of the key findings is presented below.

Even though the selected survey themes were relevant, the survey structure and methodology were not
robust enough to support the survey findings. For example, some of the questions, such as “the staff
perception of the quality of services,” were irrelevant since most of the upgraded services were not
operational as the civil works and the full installation of the new medical equipment were not
completed in the project hospitals in October 2006. Nevertheless, the most significant results of the
survey were the high satisfaction among all categories of hospital professionals with the acquisition of
new equipment and material as well as improved working conditions (67.3% satisfied or highly
satisfied). Also, the new work dynamics (participative approach) induced by the project were well
perceived (56% satisfied or highly satisfied). Moreover, all categories of personnel, except for the
physicians, were aware of the project’s objectives and activities. Forty percent of the physicians
reported that they were not well informed about the project’s objectives and activities in their hospitals.
On the other hand, the majority (56%) of the personnel were not satisfied with the transfer of skills
and competencies in management and planning as well as the new hospital organigram and created
committees. Physicians were the least satisfied with the project interventions (except for the
acquisition of new equipment).

27
Annex 6. Stakeholder Workshop Report and Results
(if any)

28
Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

29
30
31
32
33
34
35
36
37
38
Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders
N/A

39
Annex 9. List of Supporting Documents

• World Bank: ISRs of the Project

• World Bank: Back to office reports – Supervision missions
• Plan de l’environnement au Maroc: Plan de gestion des déchets hospitaliers
• BAJ Health Project : Implementation Completion Report
• Procurement Post Review Report
• Suivi du Pôle « D » - Gestion des ressources humaines

• A review of the law proposing health insurance reform in Morocco

• Examen de la proposition de loi sur la réforme de la santé au maroc

• Accompagnement de la mise en place de l’Agence Nationale de l’Assurance Maladie
(Rapport d’étape no. 1) Version définitive
• Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie
• Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie –
Estimation budgétaire
• Accompagnement de la mise en place de l'Agence Nationale de l'Assurance Maladie –
Rapports nos 5 et 6
• Appui au Ministère de la Santé dans la mise en place de certaines mesures
d’accompagnement de la couverture médicale de base
• Appui au Ministère de la Santé dans la mise en place de certaines mesures
d’accompagnement de la couverture médicale de base - Etats des lieux
• Appui au Ministère de la Santé dans la mise en place de certaines mesures
d’accompagnement de la couverture médicale de base - Proposition de critères pour
l’allocation des ressources budgétaires du Ministère de la Sante au niveau infra régional
dans l’objectif de réduire les inégalités de santé
• Appui au Ministère de la Santé dans la mise en place de certaines mesures
d’accompagnement de la couverture médicale de base - Evaluation de l’impact
• Rapport CREDES
• Health Insurance Expansion in Morocco

40
Annex 10: Status of Introduction of Hospital Management Tools and Hospital Development
as of Project Closing

The implementation of this component proceeded broadly on two pillars: physical improvement of
hospital infrastructure through investment in building and medical equipment and development and
introduction of modern management tools.

The project aimed at developing and introducing a number of management tools including a Hospital
Development Plan (Plan d’Etablissement de l’Hôpital, PEH), hospital information system (Système
d’Information et Gestion Hospitalier, SIG-HO), quality improvement (QI), cost analysis, human
resources, financial and accounting management system (FAMS), and organizational development
and support. By project closing, the PEH was developed for the 14 project hospitals and many of the
planned management tools were developed and introduced in the five hospitals but have not been
uniformly and optimally implemented. By project closing, the status of introducing the
Management Tools was as follows:

ƒ Hospital Development Plan (Plan d’Etablissement de l’Hôpital, PEH). All the 14 project
hospitals have developed their first PEH for the 2001-2006 period and the core five hospitals had
fully implemented them. However, the preparation of the second PER for the 2007-2011period
was not initiated, which raises questions regarding the institutionalization and sustainability of
this tool.

ƒ Hospital Information System (Système d’Information et Gesion Hospitalier, SIG-HO). This

was the least developed system as four of the five hospitals did not implement nor fully
operationalize the complete SIG-HO by the project closing date. While all the equipment was
installed and most of the wiring and cabling was done in most offices and some services, the
actual networking and internet connections were only functional in Agadir. At Meknès, the SIG-
HO was partially connected to the radiology unit, the emergency room and the intensive care unit.

ƒ Quality Improvement (QI). Overall, the QI was implemented in the five hospitals with formally
dedicated teams. Some QI initiatives have been developed such as prevention and control of
nosocomial infections, which was at an early stage of implementation. Nevertheless, the
developed methods and tools were under-utilized as they were not adequately disseminated (no
communication support in place – e.g. posters). A key challenge for QI was the lack of resources
(staff and patient education, communication, etc…) to make it a clear priority in the hospital.

ƒ Cost Analysis. In all five hospitals, the initial objective was developing tools to estimate and
analyze the unit cost of health services and developing a pricing and billing system on that basis,
which has been reduced to a more realistic and simple “cost collection tools”. These cost
collection tools were functional in all sites but the results were mostly utilized at the central level.
A key reason for the difficulty to move to full unit cost-based management was the lack of
adequately trained personnel with competencies in cost analysis. Most staff assigned to data
collection on costs were nurses and medical aides who did not have the financial background and
benefited from limited training.

ƒ Human Resources (HR). All modules and tools of HR management were developed but
partially implemented. Tools such as HR information system, job description, work and leave
schedule, and reward system have been implemented in all hospitals. However, the actual use of
the tools is suboptimal as it remains descriptive and not analytical. For example, the estimation of
personnel workload and productivity analysis were still not implemented in the project hospitals,
except for Beni-Mellal where all the HR tools have been successfully implemented and
proactively used.

41
ƒ Financial and Accounting Management System (FAMS). This system had only been partially
implemented as four of the five hospitals have installed three out of the nine FAMS tools. After
much delay, the Agadir hospital has launched the professional software (progiciel) in late 2006
and has now fully developed the billing system as well as the complete nine tools needed for cost
analysis. That delay was due to the difficulty in extending the procurement contract for the
installation of the software and adapting it to the local context as well as the lack of adequately
trained personnel. The Progiciel is yet to be procured and installed in the other hospitals and the
designated personnel adequately trained.

ƒ Organizational Development and Support. The objective of this pillar was to support the
hospital management team in adopting and implementing the reforms for both administrative and
medical functions. Most of the new administrative functions were implemented in the five
hospitals with a new organigram that entailed the establishing of the management teams, the
consultative committees, the communication unit, and the admission and billing unit (BAF). The
communication unit in the five hospitals has proven to be very active in reaching out to different
stakeholders particularly in informing hospital staff and patients about the ongoing reforms but its
actions still remain confined to describing the hospital physical improvements. However, some of
these functions were not fully computerized, particularly the BAF (computers exist but not used)
because of lack of adequately trained personnel. On the other hand, the new medical functions
remain a challenge. For example, the creation of new departments (departmentalization) for
medicine, surgery, mother and child, etc….is being met with resistance. For example, in Meknes,
the management team is still discussing the status and functions of a department before actually
create them. (Only the internal medicine department was established in the five hospitals).
Similarly, the medical record has neither been unified nor fully used because of lack of
communication/training of the medical staff. The resistance of the medical corps to change was
the key factor in the lack of progress in implementing the new medical functions and tools such as
the unified medical record, which severely limits any progress in the quality of health care and in
the implementation of the universal medical insurance scheme. Two factors seem predominantly
responsible of the failure in mainstreaming the medical record. First, the physicians have not
been involved enough and/or trained and lack knowledge about the reform objectives and their
roles and administrative responsibilities. Second, there was no incentive scheme in place
(leverage/control/sanctions) for the physicians that encouraged them to adopt the unified medical
record. Resistance to change was not adequately considered in project design particularly
resistance from the medical corps.

Hospital investment in buildings and medical equipment was completed by the project closing date.
Almost all major civil works were completed by December 2006 and some minor works were
completed afterwards through Government financing. The quality of civil works was good and
resulted in an extended hospital capacity and improved physical infrastructure. By project closing, all
the planned medical equipment had been supplied but not all of them were installed and in service
(such as the Operation Room in Settat). The status of project hospitals was as follows:

ƒ Settat (Hassan II) Hospital. The hospital development plan (PEH) had two phases that included
the rehabilitation and equipping of central sterilization, surgery, radiology, emergency room,
intensive care, hemodialysis, biology laboratories, medical archives, and external works. This has
been fully executed at a total cost of about $9.4 million and all units were operational but barely
by project closing date; the impact on utilization was not therefore possible to assess. In terms of
hospital management systems and tools, the first Hospital Development Plan (Plan
d’Etablissement de l’Hôpital- PEH) for the period 2002-2006 has been developed and fully
executed but it does not seem to be sustainable as no second plan was developed for the period
(2007-2011). The Hospital Information System (SIG-HO) was not operational even though the
equipment and cabling was mostly installed. The professional software (progiciel) has not yet
been implemented. As for the Quality Improvement (QI) pillar, it was still at an initial

42
 implementation stage. Also, the cost collection tools were functional but mostly utilized at the
central level. Moreover, all modules and tools of Human Resources (HR) management were in
place but their actual use was suboptimal. The Financial and Accounting Management System
(FAMS) has not progressed well despite the fact that Settat’s hospital was the pilot site for this
pillar; only three out of nine modules have been developed and implemented. Finally, the new
administrative reorganization was operational but many of the newly created departments were
short in staff.
ƒ Meknes (Mohamed V) Hospital. The hospital development plan (PEH) had two phases that
included the rehabilitation and equipping of the radiology unit, surgery rooms/theatre, central
sterilization, intensive care, biology laboratories, emergency room, burn unit, admission and
billing, a new full administrative unit, the incinerator, and external works. This has been fully
executed almost by project closing date at a total cost of about $13.1 million, however not all
services and equipment were fully operational such as the intensive care unit and biology
laboratory. The impact on improved service utilization was not therefore possible to assess. In
terms of hospital management systems and tools, the first PEH was developed and fully executed
but no further plans were developed. The SIG-HO was not fully operational. On the other hand,
Meknes was the pillar of excellence for QI and good progress was made in terms of development
of many protocols and guidelines, training of providers, and communication to staff and patients;
an achievement that needs to be sustained. The cost collection tools were functional but mostly
utilized at the central level. All HR modules and tools were developed but not fully utilized. The
FAMS was partially developed and implemented. The new administrative units were created but
not operational as hospital management did not specify their detailed functions.
ƒ Beni-Mellal Hospital. The PEH had two phases that included the rehabilitation and equipping of
the central pharmacy, the hemodialysis, radiology, outpatient clinics for medicine and surgery, the
maternity unit, the emergency room, the intensive care, the medical archives, and the
administrative unit. This has been fully executed at a total cost of about $9.4 million, and almost
all services start to become fully functional by project closing date. There were no utilization data
available for the improved services to assess project impact. In terms of hospital management
systems and tools, the first PEH was developed and fully executed but no further plans were
developed. All the equipment of the SIG-HO was received and the network was fully executed,
however the professional software (progiciel) has not yet been implemented. The QI program
was at an initial stage of implementation focusing on nosocomial infections. The cost collection
tools were functional. All modules and tools of HR management were in place including a
“Personnel Plan” developed but not implemented. The FAMS was partially developed and
implemented. The BAF was fully functional but not computerized. The new hospital organigram
was completed and the hospitals committees were operational. Some departments however lacked
clear definitions of their role. The “patient file/medical record” was not unified. The
communication unit was active in reaching out to different stakeholders.

ƒ Safi (Mohamed V) Hospital. The hospital development plan (PEH) had two phases that included
the rehabilitation and equipping of the surgery rooms/theatre, the biology laboratories, the central
sterilization unit, the administration unit, catering/kitchen, the radiology unit, the ER unit, the
intensive care unit and external works. The two phases were fully executed except for the biology
and the intensive care units, which were not operational by project closing date. The incinerator
was operational. The total cost of investments in Safi was about US$ 10.6 million. The impact of
hospital improvements on service utilization or quality was not possible to assess. In terms of
hospital management systems and tools, the first PEH was developed and fully executed but no
further plans were developed. The infrastructure for the SIG-HO was fully executed but the
professional software (progiciel) has not yet been implemented. QI activities were at an initial
stage of implementation. The cost collection tools were functional. All modules and tools of HR
management were developed but the HR software was not installed due to technical difficulties
and a local application is being used. The FAMS was partially developed and implemented (only

43
 3 out of 9 modules). The BAF was fully functional but not computerized. The new organigram
was implemented and the new administrative units and consultative committees were created and
operational. Moreover, the management team established a local training program, which was
considered a priority, for the nursing staff.

ƒ Agadir (Hassan II) Hospital. The hospital development plan (PEH) had two phases that included
the rehabilitation and equipping of the surgery rooms, the central sterilization unit, the ER, the
intensive care, the radiology unit, traumatolgy and pediatrics/neonatology. This has been fully
executed by project closing date at a total cost of about US$ 11.5 million. Most services started to
operate right before closing except for the operations/surgery rooms and the central sterilization
unit, which were not operational. The incinerator was fully operational. Improved services started
in late 2006, which did not permit an assessment of project impact on utilization and quality of
services. In terms of hospital management systems and tools, the first PEH was developed and
executed but there was no second plan prepared. The equipment and most of the cabling for the
SIG-HO was executed but the system was not fully operational at project closing. The cost
collection tools were utilized. All modules and tools of HR management were developed but the
FAMS was partially implemented. The BAF was fully functional but not computerized. The new
hospital organization was implemented and the new administrative units and consultative
committees were developed and active, particularly the communication unit.

44