The Government of the Republic of Macedonia has committed itself to improve the policy decision making of MOH, and improve governance and efficiency of the HIF. The Project will help the GOM to improve the efficiency and effectiveness of health service provision, including the support for implementation of the ongoing reform of the health insurance systems. The Government is committed to these goals as they are included in the Country Assistance Strategy (CAS) presented on September 9, 2003 (Report R2003-0158). The Project follows on earlier support for reform in the health and related sectors, and is designed to complement a series of programmatic adjustment loans in support of public sector management reform over FY03 – FY06.

The Government’s strategy for health aims to address the following problems:

1) Significant weaknesses in financial management, internal control, and external accountability of the Health Insurance Fund;

2) Weak revenue collection, record-keeping and administration of the existing health insurance systems;

3) Perverse incentives arising from provision of free health insurance to all registered unemployed inflates the unemployment numbers, which reduces the population base for contributions, increases budget transfers for the HIF, and burdens the National Employment Bureau (NEB) with administrative tasks of providing health insurance documentation for the unemployed which detract from the development of strategic employment policy and the provision of active labor market services;

4) Excessive allocation of resources to high-cost health services in the major metropolitan areas compared to basic care and preventive services;

5) Corruption and misuse of public funds in the health sector, in particular in spending on drugs and medical supplies;

6) Inefficiency and low quality of services because of excessive capacity, improper organization, weak regulation, lack of incentives, and lack of skills of providers;

7) High out-of-pocket payments for healthcare, both informal payments to doctors, and payments for drugs and supplies that are rationed in the public healthcare system when institutions are under financial stress.

I. PROJECT STRATEGIC GOALS

The Government’s higher level objectives are economic development, poverty reduction and the promotion of social stability and harmony. By addressing the important issue of cost-containment while improving quality and access, the Project will contribute to these higher-level objectives.

There are three key development challenges and opportunities for the health sector, as defined in the Bank’s Country Assistance Strategy.

Achieve sound public expenditure management, especially through an increased emphasis on extra budgetary institutions which includes the HIF;

Assure undisrupted delivery of health services in the context of decentralization;

Guarantee the quality, efficiency and access of health services.

According to the goals set by the CAS, the Project supports the institutional development of the HIF and assists the HIF in effectively implementing policy reforms included under the Public Sector Management Adjustment Loan (PSMAL). Further, it focuses on improving the capacity of health providers to operate effectively in the reformed health care environment and provides quality health care. Finally, the Project strengthens the capacity of the MOH in policy-making, regulation, monitoring and evaluation.

II. PROJECT DESCRIPTION 

LENDING INSTRUMENT AND PROJECT FUNDING

The Project is financed through a Specific Investment Loan (SIL) of US$10 million and by Government contribution of roughly $1.34 million. The Loan complements reforms supported by a series of programmatic public sector management adjustment loans and the associated TA financed by Dutch Trust Funds. One of these adjustment loans (PSMAL) was approved at the same time as this Loan and supports important policy changes in HIF contracting with hospitals and the introduction of internal changes within HIF to strengthen financial management. The Loan provides the necessary assistance, training and goods to the HIF, with an emphasis on strengthening the management information system. These investments will be critical for ensuring success of the policy reforms supported under PSMAL and will support the expansion of these reforms. The Government will finance limited civil works, training costs, recurrent operating costs, taxes and duties. Therefore, the total Project cost should be viewed as part of the overall program to support the reform of the health system in Republic of Macedonia.

IMPLEMENTATION DURATION

The Project is expected to be implemented over about a four and a half (4.5) year period. The anticipated Project effectiveness date (accounts are set up and the funds are available) is September 1, 2004, the completion date (upon which no new activities are initiated) is December 31, 2008 and the closing date (accounts are cleaned up from the funds, all reports are completed) is June 30, 2009.

Please follow the link below to download the official documents

	PAD-_english.pdf
	POM-_english.pdf