Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD387 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 12.70 MILLION (US$19.50 MILLION EQUIVALENT) TO MONGOLIA FOR A E-HEALTH PROJECT May 19, 2014 Health, Nutrition and Population Unit Human Development Sector Department East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 31, 2014) Currency Unit = Tugrig (MNT) MNT 1,789 = US$1 US$ 1.5456 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank IP Indigenous People API Application Programming Interfaces IT Information Technology DA Designated Account ITPTA Information, Technology, Post and Telecommunications Agency DMEIA Department of Monitoring, M&E Monitoring and Evaluation Evaluation and Internal Audit EA Enterprise Architecture MDGs Millennium Development Goals FGP Family Group Practices MOH Ministry of Health FM Financial Management NCDs Non-Communicable Diseases FMM Financial Management Manual NCHD National Center for Health Development GDP Gross Domestic Product NDC National Data Centre GOM Government of Mongolia NEA National Enterprise Architecture GPA General Procurement Agency NHIC National Health Information Center HDD Health Data Dictionary OA Operating Account HDS Health Data Standards ORAF Operational Risk Assessment Framework HIEP Health Information Exchange PACS Picture Archiving and Platform Communication System H-INFO Health Statistics Information System PIM Project Implementation Manual HIS Hospital Information Systems PIU Project Implementation Unit HMIS Health Management Information PDO Project Development Objective System IBL Integrated Budget Law PRC People’s Republic of China ICT Information and Communication SHI Social Health Insurance Technology IDA International Development SSIGO State Social Insurance General Association Office IFC International Finance Corporation TOR Terms of Reference IFR Interim Financial Report WHO World Health Organization Regional Vice President: Axel van Trotsenburg, EAPVP Country Director: Klaus Rohland, EACCF Sector Director: Xiaoqing Yu, EASHD Sector Manager: Toomas Palu, EASHH Task Team Leader: Aparnaa Somanathan, EASHH MONGOLIA E-Health Project TABLE OF CONTENTS Page I.  STRATEGIC CONTEXT .................................................................................................1  A.  Country Context ............................................................................................................ 1  B.  Sectoral and Institutional Context................................................................................. 2  C.  Higher Level Objectives to which the Project Contributes .......................................... 4  II.  DEVELOPMENT OBJECTIVES ....................................................................................5  A.  PDO............................................................................................................................... 5  B.  Project Beneficiaries ..................................................................................................... 5  C.  PDO Level Results Indicators ....................................................................................... 5  III.  PROJECT DESCRIPTION ..............................................................................................5  A.  Project Components ...................................................................................................... 6  B.  Project Financing .......................................................................................................... 9  C.  Lessons Learned and Reflected in the Project Design .................................................. 9  IV.  IMPLEMENTATION .....................................................................................................10  A.  Institutional and Implementation Arrangements ........................................................ 10  B.  Results Monitoring and Evaluation ............................................................................ 11  C.  Sustainability............................................................................................................... 11  V.  KEY RISKS AND MITIGATION MEASURES ..........................................................12  A.  Risk Ratings Summary Table ..................................................................................... 12  B.  Overall Risk Rating Explanation ................................................................................ 12  VI.  APPRAISAL SUMMARY ..............................................................................................13  A.  Economic and Financial Analyses .............................................................................. 13  B.  Technical ..................................................................................................................... 13  C.  Financial Management ................................................................................................ 14  D.  Procurement ................................................................................................................ 14  E.  Social (including Safeguards) ..................................................................................... 15  F.  Environment (including Safeguards) .......................................................................... 15  Annex 1: Results Framework and Monitoring .........................................................................16  Annex 2: Detailed Project Description .......................................................................................22  Annex 3: Implementation Arrangements ..................................................................................36  Annex 4 Operational Risk Assessment Framework (ORAF) ..................................................48  Annex 5: Implementation Support Plan ....................................................................................52  Annex 6: Economic and Financial Analysis ..............................................................................54  Annex 7: Additional Sectoral and Institutional Context ..........................................................62  . PAD DATA SHEET Mongolia E-Health Project (P131290) PROJECT APPRAISAL DOCUMENT . EAST ASIA AND PACIFIC EASHH Report No.: PAD387 Project ID EA Category Team Leader P131290 C - Not Required Aparnaa Somanathan Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 31-Oct-2014 31-Mar-2019 Expected Effectiveness Date Expected Closing Date 31-Oct-2014 30-Sep-2019 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Toomas Palu Xiaoqing Yu Klaus Rohland Axel van Trotsenburg . Borrower: Mongolia Responsible Agency: Ministry of Health Contact: Tsolmongerel Tsilaajav Title: Director, Strategic Policy and Planning Telephone No.: 976-11-51260474 Email: tsolmongerel@moh.mn . Project Financing Data(in USD Million) [ ] Loan [ ] Grant [ ] Guarantee [X] Credit [ ] IDA Grant [ ] Other Total Project Cost: 23.75 Total Bank Financing: 19.50 Financing Gap: 0.00 . Financing Source Amount BORROWER/RECIPIENT 4.25 International Development Association (IDA) 19.50 Total 23.75 . Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 2019 2020 0000 0000 Year Annual 0.00 1.50 2.50 3.50 5.00 5.00 2.00 0.00 0.00 Cumulati 0.00 1.50 4.00 7.50 12.50 17.50 19.50 0.00 0.00 ve . Proposed Development Objective(s) To improve integration and utilization of health information and e-health solutions for better health service delivery in selected pilot sites. . Components Component Name Cost (USD Millions) E-health Foundational Activities 2.85 Clinical Data Collection, Access and Sharing 16.06 National Health Information Center 2.44 Institutional Strengthening and Capacity Building 1.20 Project Management 1.20 . Institutional Data Sector Board Health, Nutrition and Population . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Health and other social services Health 100 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Human development Health system performance 80 Public sector governance Managing for development results 20 Total 100 . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Terms of Reference for the Key 30-Apr-2015 Technical Staff Positions for NHIC Description of Covenant The Recipient shall, no later than six months after the Effective Date, prepare terms of reference acceptable to the Association for the key technical staff positions for NHIC. Name Recurrent Due Date Frequency Key Technical Staff Positions 01-Jan-2016 Description of Covenant By January 1, 2016 establish and thereafter maintain for the duration of the Project the technical staff positions referred to in the preceding sub-paragraph and fill such positions with staff having qualifications and terms of reference acceptable to the Association. . Conditions Source Of Fund Name Type Withdrawal Conditions Disbursement Description of Condition No withdrawal shall be made: for payments under Category (2) until and unless the Project Implementation Unit has been established in a manner acceptable to the Association and in accordance with Schedule 2, Section I, Part A of the Financing Agreement, and a Project Implementation Manual acceptable to the Association has been adopted by the Recipient. Team Composition Bank Staff Name Title Specialization Unit Hope C. Phillips Volker Consultant Operations EASHD Minneh Mary Kane Lead Counsel Counsel LEGES Sabrina Gail Terry Program Assistant Operations EASHD Songling Yao Senior Social Social safeguards EASCS Development Specialist Dennis Streveler Consultant Consultant EASHD Gerelgua Tserendagva Procurement Specialist Procurement EASR2 Anna L Wielogorska Senior Procurement Procurement EASR1 Specialist Haixia Li Sr Financial Financial management EASFM Management Specialist Aparnaa Somanathan Senior Economist Team Lead EASHH Yiren Feng Senior Environmental Environmental EASCS Specialist safeguards Xuan Peng Program Assistant Operations EACCF Jose Ramon R. Pascual Senior Counsel Senior Counsel LEGCF IV Dulguun Byambatsoo Consultant Financial management EASFM Rong Li E T Consultant Economics EASHH Lim Lip Yeow Consultant Consultant EASHD Ulziimaa Erdene E T Temporary Operations EACMF Pagma Genden E T Consultant Human Development EASHH Non Bank Staff Name Title Office Phone City Peeter Ross E-health Expert Talinn . Locations Country First Location Planned Actual Comments Administrative Division Mongolia Ulaanbaatar Ulaanbaatar Hot X Mongolia Ulaanbaatar Ulaanbaatar X Mongolia Hovsgol Hovsgol Aymag X I. STRATEGIC CONTEXT A. Country Context 1. Mongolia, which transformed itself over the past 20 years into multi-party democracy with a vibrant market economy, is now experiencing a second transformation fueled by a mineral resource boom. Since 2010, the economy has grown annually at an average rate of 12 percent. Poverty rates declined from 39 percent in 2010 to 27 percent in 2012, and several of the Millennium Development Goals (MDGs) have already been met. 2. The vast natural resources offer a unique opportunity – and challenge – for Mongolia to ensure that this wealth is transformed into sustainable and equitable growth and contributes to poverty reduction. Although the Gini index has remained around 0.38 since 2005, inequalities are rising. For instance, there is evidence of large disparities across socioeconomic groups and geographic regions in many of the MDGs indicators. The combination of extreme population sparseness in rural areas and overcrowding in urban and peri- urban areas implies significant challenges for ensuring equity in access to social services. 3. The country has adopted a series of reforms to manage public resources in a more sustainable, transparent and decentralized way. The economy’s reliance on mineral exports and exposure to commodity price swings has tended to result in boom-and-bust cycles and a high degree of volatility in public revenues. This has been particularly detrimental for social services like health, which are highly dependent on public spending. In reaction to the 2008-2009 crisis, the Government of Mongolia (GOM) adopted a Fiscal Stability Framework in 2012. GOM also introduced the Integrated Budget Law (IBL) in 2013 setting rules for budget planning and decentralization to strengthen accountability and improve the distribution of public spending. 4. Good quality information generated by integrated information systems provide the enabling environment for achieving greater accountability, efficiency and equity in public spending and for ensuring public spending contributes to poverty reduction. As the IBL is implemented, public spending will increasingly be managed at the sub-national level. Absent good quality data and integration of data across and between levels, historic allocation patterns and political interests may supersede actual need for services, thus undermining equity in the distribution of revenues. Furthermore, as Mongolia moves away from input-based financing towards more performance-based financing in the public sector, consistent and accurate data would be critical for achieving the efficiency and equity gains that such resource allocation methods can potentially generate. 5. The GOM recognizes the potential of information and communication technology (ICT) for improving public service delivery and has already made significant investments in this area. With 25,909 kilometers of fiber optic backbone and access networks being extended nation-wide, over 200,000 Internet connected points are on the map of Mongolia bringing ICT closer to its people. Internet users have increased from under 200,000 in 2010 to over 657,000 in 2012 reaching 21.8 percent of Mongolia’s total population. Under the national e-Government program, GOM is enhancing the legal environment to develop e-government. This vision is supported and clearly stated in the national ICT Policy document - a 2021 vision of becoming a knowledge-based economy using ICT to accelerate Mongolia’s development. 1 Mongolia’s Information, Technology, Post and Telecommunications Authority (ITPTA) is responsible for the design and implementation of the government’s ICT policy, supported by the technical resources of the National Information Technology Park (IT Park). The National Data Centre (NDC) exists to provide state-of-the-art facilities for secure storage of, and access to, government data. B. Sectoral and Institutional Context 6. Historically, achievements in the health sector have been good relative to Mongolia’s income level (See Annex 7). These achievements reflect a history of government commitment to health, effective communicable disease control and an extensive delivery infrastructure to provide health services to the highly dispersed, and largely rural, population. The health care delivery infrastructure consists of three levels: national, aimag (province equivalent), and soum (district equivalent). The tertiary level comprises central hospitals and specialized institutions in Ulaanbaatar as well as four regional diagnostic and treatment centers. The secondary level comprises Aimag General Hospitals and District Hospitals. Primary care services are provided at Soum Hospitals in rural areas and family group practices (FGP) in the capital and aimag centers. Mongolia is also notable for having avoided initial, sharp increases in out-of-pocket payments and inequalities in health care use following the collapse of the communist regime in the early 1990s. Social Health Insurance (SHI) was introduced in 1993 with substantial state budget funding to ensure coverage and financial protection. Total health spending accounted for about 5.1 percent of Gross Domestic Product (GDP) in 2011. Of this, the largest share of financing (42 percent) was from the state budget. SHI financing accounted for 15.8 percent, and out-of-pocket payments constituted 40 percent of total health expenditures. 7. Now, at the cusp of its resource-led transformation into a middle-income country, Mongolia faces a myriad of health system challenges. Adult mortality rates are on the rise, driven by the growth of non-communicable diseases (NCDs). Health insurance coverage is declining, both in terms of enrollment rates and financial protection. This is reflected in large socio-economic differentials in health care use, particularly in the use of secondary and tertiary hospitals. However, the current delivery system is fragmented; most patients bypass primary care services in favor of better quality secondary or tertiary services, leading to overcrowding at these levels. There is little coordination of care and follow-up of patients across the different levels of the system. 8. NCDs are a major driver of health expenditures and poor health outcomes. Cardiovascular diseases, cancer and diabetes account for 43 percent of total morbidity and 60 percent of mortality at present, and estimated to reach 60 percent and 73 percent respectively by 2020. Cost escalation associated with certain NCDs such as cardiovascular diseases outpaces average health spending growth in many countries around the world (World Bank, 2010). Early diagnosis and effective prevention of NCDs can reduce the need for hospitalization and lessen the financial burden on the poor. Limited access to good quality primary care often results in under-diagnosis and delays in treatment. Rural patients in particular are at greater risk for being diagnosed late and requiring more expensive, acute care for NCD related conditions. Such delays imply missed opportunities for preventing and treating NCDs more cost-effectively. 2 9. The Ministry of Health (MOH) formulated the E-health Strategy (2010-2014) in 2009, recognizing the critical role that e-health solutions can play in addressing Mongolia’s specific health system challenges, and in keeping with the broader e-government strategy. The GOM’s recent policies and strategies in the health sector reflect the need for a more integrated system of financing and delivery (See Annex 7, para 8). The E-health Strategy is entirely in line with this broader health policy goal. One of the Strategy’s guiding principles is to “harmonize the health systems’ actions” with the objective of “improving the quality and availability of health services”. By putting in place this national strategy, and affirming it via Ministerial order 490 (2009), the GOM created the basis by which the detailed discussions are now being held about how best to implement that policy. 10. Implementation of the E-health Strategy has been characterized by the development of a large number of disparate information systems that contribute little to the exchange of clinical and health system data between providers and other agencies. Hospital Information Systems (HIS) exist in most tertiary hospitals and approximately half of all secondary (aimag general) hospitals. The existing HIS were developed by at least two different vendors. Recently, the GOM agreed to a US$18.5 million E-Health Project by the Government of China, which would finance computers and servers, and develop an entirely new HIS for all public hospitals. There is a centralized health statistics information system (H-Info), which collects morbidity and mortality data, utilization statistics and some quality indicators. H-Info is also used for processing SHI claims; although set up to facilitate electronic information exchange between the health insurance agency and providers, it does not do so in practice. In addition, the Governments of Luxembourg and Switzerland, and the Asian Development Bank (ADB) have financed numerous, independent telemedicine projects over the past decade or so. 11. The fragmentation of the health information system exacerbates already high levels of fragmentation in financing and delivery, seriously undermining health system performance. For instance, the fragmentation of health financing sources (state budget vs. SHI) and provider payment mechanisms means that the State Social Insurance General Office (SSIGO) has limited strategic purchasing capacity. In this context, a system that facilitates electronic data exchange between providers’ HIS and SSIGO’s H-Info could improve claims processing, support SSIGO with monitoring provider behavior and contribute to improving efficiency and quality of SHI financed services. Another example is the ineffective treatment and control of NCDs. Coordination of care across different levels of the system is critical for addressing the rapidly rising burden of NCDs. Given the poor quality of primary care and weak referral mechanisms in Mongolia, enabling information exchange between HIS at different levels of the system would greatly improve referrals and follow-up care. 12. This Project is motivated by the fact that better integration of health information systems and e-health solutions can create an enabling environment for improving service delivery in the context of broader health system reforms. Indeed, a range of health financing and delivery reforms is under discussion at present. Current proposals to reform the Citizen’s Health Insurance Law (under discussion in Parliament) envisage combining state budget and SHI funds into a single pool and establishing a single payer with strategic purchasing capacity. The MOH is undertaking a provider payment diagnostic assessment with the support of the World Bank and World Health Organization (WHO) with a view to reforming and strengthening 3 provider payment mechanisms. Under the IBL, the Ministry of Finance is developing a new formula for allocating resources to the district level, also with World Bank support, which would imply a major change from the current, historical per capita-based allocation mechanism. 13. Shortcomings in e-health implementation, which this Project seeks to address are as follows: the lack of a robust Enterprise Architecture (EA) or roadmap for the development of e- health activities; inconsistent data formats, coding schemes and timing of information delivery due to lack of health data standards (HDS); lack of data interchange between different HIS to match up information about patients, and no linkage to the wider administrative and financing systems; incomplete data in the existing health information system limits the ability to create useful, consistent “maps” for tracking diseases, especially in chronic diseases; and, limited IT literacy and capacity, and fragmented IT resources to manage a modern health information system 14. MOH is the owner and lead agency for e-health in Mongolia. MOH is responsible for setting overall policy, introducing and enforcing regulations on e-health and coordinating e- health efforts. In doing so, MOH works closely with ITPTA and other government agencies responsible for broader e-government initiatives in the country. Rationale for Bank Involvement 15. The World Bank has unique technical expertise and global knowledge in health information systems, use of ICTs for delivery of public services, etc. which has been used in the design of innovative health projects with significant health information system components in transitional economies like Mongolia (e.g, Albania, Croatia, Kazakhstan, Lithuania, Latvia, Macedonia and Slovenia). Secondly, international procurement of health IT investments is a complex undertaking. By involving the World Bank as a financier, Mongolia’s E-Health Project would benefit from the World Bank’s quality assurance, Project design and implementation management capabilities. Third, the World Bank is able to span the various political levels, multiple ministries and technical resources of Mongolia so as to assist in the integration of several major components of the e-health system. Fourth, the World Bank can leverage the contributions of other World Bank financed projects in Mongolia such as the proposed SMART e-Government Project, to identify potential synergies and optimize benefits from these investments. Finally, the World Bank has extensive experience in other countries of coordinating activities of development partners. Effective coordination will be key to the success of e-health in Mongolia. C. Higher Level Objectives to which the Project Contributes 16. The higher level objective supported by the Project is to contribute to GOM’s efforts to utilize public sector resources more effectively in the health sector in a context where there are competing policy priorities. On the one hand, rapid economic growth and the potential for large revenue flows are being tempered by the need to maintain fiscal prudence and stability. On the other hand, weaknesses in the health system are contributing to inefficient, inequitable and poor quality services, thus preventing the sector from addressing emerging needs, such as the growing burden of NCDs, effectively. Integrated, good quality information systems create the enabling environment for improving efficiency, equity and quality in service delivery. Absent good 4 quality, and integrated information systems, reforms to strengthen the health system (such as provider payment reforms) would have little impact on outcomes. 17. The proposed Project is fully aligned with the current Country Partnership Strategy for Mongolia. It falls under the third pillar of the Country Partnership Strategy for FY13-17 which aims to “Address Vulnerabilities through Improved Access to Services and Better Service Delivery”. II. DEVELOPMENT OBJECTIVES A. PDO 18. The Project Development Objective (PDO) is to improve integration and utilization of health information and e-health solutions for better health service delivery in selected pilot sites. B. Project Beneficiaries 19. The first group of beneficiaries comprises the patients visiting facilities at the selected pilot sites: patient records are accessed and referrals processed more expeditiously; follow-up care is managed effectively with reminders to the provider. The second group of beneficiaries comprises service providers at the selected sites: medical data on patients is accessed from one place more expeditiously; administrative workload due to paperwork is reduced. A third group of beneficiaries comprises the health care providers and national level administrators: IT skills and capacity are upgraded. C. PDO Level Results Indicators 20. The PDO level results indicators are outlined below (see Results Matrix in Annex 1 which also includes intermediate indicators): (a) Percentage of patient episodes for which information, including medical image information is available for secure viewing at pilot facilities. (b) Percentage of statistical reports out of total reports produced by pilot facilities that are transmitted electronically through the Health Information Exchange Platform (HIEP) to the National Centre for Health Development (NCHD). (c) Percentage of electronic referrals out of total referrals at pilot facilities. III. PROJECT DESCRIPTION 21. Overall strategy of the Project. The GOM and development partners have already made significant investments towards establishing the infrastructure and applications for e- government and e-health solutions. However, e-health investments to date have been largely piecemeal and fragmented, preventing them from achieving their full potential in terms of improving efficiency and quality in service delivery. The strategy under this Project is to build on investments to date, while taking advantage of innovative, cloud-based technologies to foster greater integration among existing and future health information systems. Therefore, instead of designing a completely new HIS, the Project would foster the “wrapping” of the existing systems 5 with appropriate middleware to enable them to communicate in a single language with an interface layer, and thus the rest of the world. A. Project Components 22. The Project has five components, of which the first four directly address the shortcomings listed above: (1) e-health foundational activities; (2) clinical data collection, access and sharing; (3) National Health Information Center (NHIC); (4) institutional strengthening and capacity building; and (5) project management. A more detailed Project description, including technical descriptions, can be found in Annex 2. 23. Component 1: e-health Foundational Activities (Total US$2.85 million, IDA US$2.63 million). The focus of this component is on laying the foundations for successful deployment of e-health solutions and developing the pre-requisites needed for greater integration of health information between health facilities, the health insurance agency, public health agencies, private sector, etc. Component 1 comprises two sub-components: (a) Sub-Component 1.1: Enterprise Architecture (EA) development (Total US$1.93 million, IDA US$1.82 million). This sub-component would support the development of an EA for health, which would be based on the National Enterprise Architecture (NEA) framework but adapted to the specifics of the health sector. It would be implemented in partnership with GOM agencies like ITPTA, and with the technical assistance of the WHO, as it builds on efforts already initiated by these agencies to develop a NEA and interoperability framework for the GOM. The NEA would be anchored out of the Office of Architecture and Governance in conjunction with the ITPTA’s IT Park and under the supervision of Mongolia’s Chief Enterprise Architect. These efforts would also be supported by the World Bank’s proposed SMART Government Project. A key activity under this sub-component would be the analysis of the current business processes at key health facilities and subsequent development of all the required elements of the enterprise information system. Another key activity is assessment of the legislative changes that are needed in order to make e-health functional (See Annex 2, Box A2.1). This sub-component would largely finance technical services and some software licenses. (b) Sub-Component 1.2: Health data standards (Total US$0.92 million, IDA US$0.81 million). This sub-component would establish a suite of HDS, which would form the “common language” needed for diverse computer systems to interoperate. Work on developing one of the standards, a Health Data Dictionary (HDD), has already begun under the World Bank grant for e-health development preparation. This sub-component would finance a combination of consultancy services and technical services for the development of the standards as well as Mongolia’s subscription to use one of the major health data exchange standards (HL7). 24. Component 2: Clinical Data Collection, Access and Sharing (Total US$16.06 million, IDA US$12.37 million). The aim of this component is to establish a solid basis for standardized data and medical image exchange between healthcare providers and users, develop the mechanism for such data exchange to take place, and pilot-test this mechanism in selected 6 sites. The development of the data and medical image exchange systems would be based on the detailed assessment of business processes carried out under Component 1. This component has four sub-components. (a) Sub-Component 2.1: The e-health portal and viewer (Total US$2.12 million, IDA US$1.12 million). The aim of this sub-component is to establish a solid basis for standardized data exchange between healthcare providers and access for users to the HIEP initially, and the links between the HIS and other individual systems that may come on-line in the future. Project investments comprise development of: (i) the computer architecture; (ii) a web-portal application and links that would enable the e-health system to become fully functional over time; and (iii) security infrastructure for the Portal to assure appropriate levels of privacy and confidentiality. The existing National Identification Number would become the key patient identifier. (b) Sub-Component 2.2: HIEP including enterprise service bus and secure gateway (Total US$7.23 million, IDA US$6.38 million). The HIEP would enable different HIS from a range of providers to exchange data. As the e-health system becomes fully functional, the HIEP would also enable the exchange of data between health insurance (e.g. SSIGO) and health services utilization reporting and epidemiology (H-Info). The HIEP would be underpinned by the e-health foundations and pre- requisites developed under Component 1. Project investments include the design and construction of the HIEP itself and the interconnections between existing HIS, new HIS, other health information systems, an enterprise service bus for secure internet based data exchange, and gateway for user authentication and handling of queries. (c) Sub-Component 2.3: Analysis and implementation of Picture Archiving and Communication System (PACS) (Total US$ 4.85 million, IDA US$ 4.00 million). The PACS would comprise the development of a central archiving and communication environment for digital medical images, the upgrading of selected facilities to be able to use digitally acquired imagery (mini PACS) and upgrading of local networks to be able to share digital imagery. The nationwide development of PACS will enable sharing of images acquired in diagnostic departments with other healthcare professionals and patients throughout the country. Images are digitized at the point of acquisition, sent and archived in the central PACS and viewed from the PACS by the healthcare professionals who are entitled to do so. The HIEP infrastructure would be used for image exchange and distribution between the healthcare professionals. The PACS exchange would functionally and physically be a part of HIEP. (d) Sub-Component 2.4: IT infrastructure, maintenance and support and pilot tests (Total US$1.86 million, IDA US$0.87 million). This sub-component would finance the servers required for the HIEP, as well as the pilot testing of the clinical and imaging data exchange mechanisms developed under Components 2.1, 2.2 and 2.3. The servers required for the HIEP would be housed and supported at the NDC. 7 While the domain specialists from MOH would have full access to the servers to modify the functionality, further technical maintenance of the applications would rest with NDC. The specialized e-health application support would be provided by the NHIC as second-level support to augment the facilities/capabilities of the NDC/IT-Park (see Component 3). Once the portal/viewer and HIEP have been developed and tested in the laboratory, four pilots would be carried out. Each pilot would include a primary-level facility, secondary (aimag) hospital and tertiary hospital. The pilot locations are Ulaanbaatar, Tuv and Huvsgul aimags. The pilot sites are specified in Annex 2. The International Finance Corporation (IFC) is considering financing for a private hospital. This hospital may thus become a fourth pilot, once the IFC financing has been confirmed and it becomes eligible for technical support. The Project would finance consultancy and technical services for the design and implementation of the pilots, as well as software. 25. Component 3: National Health Information Center (NHIC) (Total US$2.44 million, IDA US$2.23 million). The aim of this component is to establish a center that oversees all aspects of e-health in Mongolia, thus assuring the long-term sustainability of Mongolia’s e-health investments. The Project will finance establishment costs (furniture and supplies) of the NHIC with GOM financing operating costs and office space. The NHIC will also play a leading role in designing and implementing a change management strategy for e-health (See Annex 2, Box A2.3) with guidance and advice provided by the Change Management Advisor recruited under this Project’s Implementation Unit (PIU) (See Component 5). Component 3 would finance two sub-components. (a) Sub-Component 3.1: NHIC standards and applications (Total US$0.77 million, IDA US$0.56 million). This component would finance the following activities: (i) standards enforcement comprising the on-going work of maintaining, disseminating and enforcing the HDS across all interested parties and stakeholders during the lifetime of the Project; and (ii) specialized e-health application support in the areas of clinical practice, clinical care, and other processes relating to the health venues themselves. (b) Sub-Component 3.2: Health data statistics (Health Information Dashboard) (Total US$1.67 million, IDA US$1.67 million). The Health Information Dashboard system supports complex data analyses capabilities for policy development and health statistics. This sub-component would finance two contracts: one contract encompassing hardware and database management software; and a second contract financing analysis tools. 26. Component 4: Institutional Strengthening and Capacity Building (Total US$1.20 million, IDA US$1.20 million). This component would invest in the human capacity needed for the successful implementation and institutionalization of e-health in Mongolia. It will finance two types of training and capacity building activities: (a) user training to improve the computer literacy of health service providers; and (b) IT technical training to improve the IT skills and competence of NHIC staff. 8 27. Component 5: Project Management (Total US$1.20 million, IDA US$1.10 million). This component would finance the Project Implementation Unit (PIU), domain expert consultation, and annual monitoring and evaluation (M&E) of the Project. The PIU would comprise a Project Coordinator, an implementation and procurement specialist, a financial management (FM) specialist, EA specialist(s), a clinician who offers clinical support, and a change management specialist. B. Project Financing Lending Instrument 28. The Project is to be supported through a standard International Development Association (IDA) credit of US$19.50 million equivalent on IDA blend terms. The lending instrument used is an Investment Project Financing Loan. Project Cost and Financing 29. Table 1 summarizes the Project costs and proposed financing arrangement. Component 1 of the Project would also be supported by WHO through on-going training and specific capacity building in the MOH. Total GOM contribution throughout the duration of the Project would amount to US$4.25 million comprising: operational costs of hiring government staff to support the development and maintenance of the health domain EA and HDS; GOM staff, operational and maintenance costs associated with NHIC; the Project mid-term review; and NDC’s contribution in terms of hardware and support. Table 1. Project Costs and Proposed Financing Arrangements ($ million) Project IDA Project Components % Financing Cost Financing Component 1. e-health Foundational Activities 2.85 2.62 92% Component 2. Clinical Data Collection, Access and Sharing 16.06* 12.36 77% Component 3. NHIC 2.44 2.22 91% Component 4. Institutional Strengthening and Capacity Building 1.20 1.20 100% Component 5. Project Management 1.20 1.10 92% Total Project Cost 23.75 19.50 82% * GOM contribution for Component 2 consists entirely of NDC contribution in terms of hardware and support. C. Lessons Learned and Reflected in the Project Design 30. The proposed Project design has been guided by the health sector’s own E-health Strategy, as well as a Feasibility Assessment carried out by MOH during the early stages of preparation. It is thus fully owned by the MOH. The technical lessons learned from the Feasibility Assessment and other e-health initiatives around the world are summarized in Section VI-B. In addition, the most significant lessons learned from an analysis of the successes and failures of large ICT projects were incorporated in the design of this Project. They are: 9 (a) Senior-level leadership. Successful implementation of ICT initiatives depends on strong support from top management. In this case, e-health has consistently been championed by top-level management at MOH and viewed as a priority despite leadership changes. The NCHD and ITPTA also recognize the value of the E- Health Project. (b) Strong program management. Most ICT initiatives fail when they are not competently managed. As a result, common mistakes such as requirements creep, supplier conflicts, and lack of clearly defined objectives appear time and again to threaten the success of the projects. To proactively mitigate these problems, competent project management is essential. The support of a multi-sectoral steering committee comprising stakeholders across Government would be essential in mitigating these risks. (c) Emphasis on change management and developing capacity. The e-health initiative would require significant organizational change within the health sector to be successful. Shifts in mindsets, culture and behavior cannot be achieved without a strong commitment to change management. This should go hand-in-hand with human capacity development. (d) Partnering with existing activities and organizations. Linkages with other ongoing activities are necessary to optimize benefits for the immediate project recipients and beneficiaries. This Project ensures linkages with ongoing efforts in many ways. WHO has been invited as a partner on this Project under Component 1. Throughout preparation, alignment with the People’s Republic of China (PRC) project to strengthen HIS has been identified as a key intermediate goal and efforts made to liaise with the contractor for this Project. The Project will be implemented in close cooperation with the proposed SMART Government Project, which is expected to support whole-of-government efforts to develop the EA, etc. 31. Although this is the first health project for the World Bank in Mongolia, health projects implemented by other development partners, such as the ADB, provide important lessons that have been incorporated into the design of this Project. In particular, the failure to build relevant capacity and institutionalize that capacity in a GOM agency or other non-government institution could seriously undermine the long-term impacts of Project investments. The NHIC established under Component 3 would play a vital role in institutionalizing e-health capacity in Mongolia. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 32. The MOH would be responsible for the implementation of the Project, including overall coordination, results monitoring and communicating with the World Bank on all fiduciary aspects. A Project Steering Committee, chaired by the Minister of Health will be established for oversight and to provide strategic policy advice and guidance to the Project, as well as to the MOH. The Project Steering Committee will also be responsible for ensuring synergies between the E-Health and proposed SMART Government Projects as well as with the e-health project financed by the PRC are realized. In particular, as the E-Health Project’s success will draw on the proposed SMART Government Project’s planned work on a NEA (see Components 1 and 2 of the E-Health Project), ITPTA and MOH have agreed that the coordination would take place 10 through the Steering Committee and that the ITPTA representative on the Steering Committee would work closely on Component 1. 33. The Vice Minister of Health, as Project Director, will be directly responsible for the Project. The Department of Monitoring and Evaluation and Internal Audit (DMEIA) will be the Implementing Agency for the Project. An E-health PIU would be established in the DMEIA at MOH. The PIU would be answerable to the Project Director and be responsible for Project implementation, including overall Project management, FM, M&E, and Project reporting. The General Procurement Agency (GPA) will carry out procurement for the Project, although the PIU will remain responsible for working with the beneficiary units to develop all technical inputs such as the terms of reference (TOR) and technical specifications. 34. A Project Implementation Manual (PIM) will be developed by September 30, 2014 to support the PIU to meet its responsibilities for management of the Project. The Manual will describe the PIU's division of responsibilities, operational systems and procedures, including the PIU's organizational structure, office operations and procedures, finance and accounting procedures (including funds flow and disbursement arrangements), and procurement procedures. Initial work on the PIM was started under the grant for project preparation. B. Results Monitoring and Evaluation 35. The progress and achievement of the PDO will be monitored and assessed through four types of M&E activities: (a) regular/routine monitoring; (b) mid-term review; (c) completion review; and (d) impact assessments specifically for the pilots under Component 2. A set of results monitoring indicators has been developed to measure Project outputs, intermediate outcomes, and final development outcomes (see Annex 1). To the extent possible, the results M&E arrangements for the Project will be integrated into the existing data collection and utilization mechanism at MOH, NCHD and health facilities, i.e the current Health Management Information System (HMIS). In addition, a mid-term review will be conducted during the third year of Project implementation to assess initial impacts of Project activities. The impact assessment of the pilots would be built into the design of the pilots, and include baseline surveys, and similar surveys carried out at regular intervals during the pilots (see Annex 1). Given that many of the outcomes probably vary by clinical condition, the impact assessment of the pilots will focus on specific tracer conditions that will be identified during the design of the HIEP pilots. C. Sustainability 36. Political commitment is a key determinant of Project sustainability. The GOM recognizes that ICT infrastructure, applications and services are of critical importance for improving efficiency and effectiveness in public service delivery as reflected in key strategy documents and investments in communications infrastructure. An ICT Council has been established, chaired by the Prime Minister to advise the GOM on its programs and projects. The ICT Council has taken an active interest in e-health initiatives and projects undertaken by MOH in recent months, reviewing content, and providing clear guidance on the direction of the projects. In addition, the Project is being undertaken in the context of broader, whole-of- government efforts to use ICT in the delivery of public services. The World Bank will be 11 directly involved in these whole-of-government efforts through the proposed SMART Project. The economic and financial viability of the Project is another determinant of Project sustainability. Section VI (below) shows that there are significant economic benefits to be gained from the Project in terms of cost containment, and that the incremental recurrent costs of the Project are financially sustainable. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Stakeholder Risk  Substantial Implementing Agency Risk - Capacity  Substantial  - Governance  Substantial  Project Risk  - Design  Substantial  - Social and Environmental  Low  - Program and Donor  Substantial  - Delivery Monitoring and Sustainability  Substantial  Overall Implementation Risk  Substantial  B. Overall Risk Rating Explanation 37. The proposed Project is assessed as having Substantial risks, with potentially high benefits. The key risks are: stakeholder risks (reduced commitment from government for e- health, duplicative efforts by donors, and lack of capacity among beneficiaries); implementation agency risks (weak technical capacity, fiduciary weaknesses, inadequate oversight, lack of familiarity with World Bank projects); and project risks (compliance with standards, interface layer, as well as technical complexity of project and unproven internet environment). To manage stakeholder risks, the World Bank will work closely with the Project Steering Committee which will provide a broad base of support. The World Bank will also rely on the WHO (a partner in this project), which has convening power in the health sector to ensure coordination among donors. Implementation risk is judged to be substantial because of the challenges associated with procuring complex IT systems. The World Bank will make efforts to simplify procurement to the extent possible. Experienced procurement specialists who have dealt with similar projects are already on the task team, and will continue to be in place during implementation. Ensuring that adequate resources and time are devoted to change management will be critical for managing the project risks. The project design takes this into account. 12 VI. APPRAISAL SUMMARY A. Economic and Financial Analyses 38. There is strong rationale for public financing in this Project. Many of the activities financed under the Project, such as the EA, HDS and NHIC are pure public goods. Public investment in the Project is also justified for the significant positive externalities associated with the HIEP. Given that the HIEP is a service function necessary to guarantee inter-operability, charging fees for the use of the HIEP is not desirable. Without the potential for fee revenues, private sector financing of such activities is unlikely. Therefore, these activities can only be accomplished and implemented through government interventions. 39. Quantitatively estimating the net present value of the benefits of investments through cost-benefit analysis is not very meaningful in the case of health projects. Given that the main thrust of this Project is on improving efficiency in health service delivery, the approach taken here is to identify the mechanisms through which Project interventions would improve efficiency. The Project’s investment in an integrated HIS would improve the efficiency of the referral process by: (a) facilitating speedier information flows; (b) controlling the volume of diagnostic tests and drug prescriptions more effectively; (c) ensuring better clinical reporting; and (d) reducing paperwork. The Project could also generate cost savings in the management of NCDs through greater coordination of care across the different levels of the health system (cost savings from better monitoring of diagnostic tests and adherence to drugs for NCDs). Finally, at the policy level, the Project will contribute to enhancing the capacity of health policy development and management. Annex 6 presents the estimated cost savings in a selected pilot facility (Tuv Aimag Hospital) through reduction of unnecessary lab tests and diagnostic tests simply to illustrate the types of benefits that can be expected. 40. The financial sustainability of the Project relies on the ability of the government budget to meet the counterpart funding commitments and incremental recurrent costs. While the Mongolian economy continues to grow rapidly, uncertainty over global economic prospects is starting to exert downward pressure on public spending. Nevertheless, health expenditure projections are moderately good. Annual average counterpart funding commitments of US$0.3 million are modest and account for only 0.1 percent of annual government health expenditure during the lifetime of the Project. The incremental recurrent costs, largely incurred after the Project, are on average US$1.1 million a year, or 0.3 percent of annual government health expenditures. Given fairly good prospects for expanding fiscal space for health, these commitments should have minimal fiscal impact, and are financially sustainable. Annex 6 contains the full Economic and Financial Analysis for this Project. B. Technical 41. The design of the E-Health Project is based on the findings of the e-health Feasibility Assessment carried out by the MOH in 2011, which included a survey of all health facilities to assess human, IT and infrastructural capacity to implement E-Health. The assessment showed that, although a range of electronic HIS already exist in Mongolia, their full potential for improving efficiency and quality in the health sector could not be realized because they existed largely as independent systems that do not communicate with one another to exchange data. 13 Therefore, instead of designing a completely new HIS, this Project chose to foster the “wrapping” of the existing systems with appropriate middleware to enable them to communicate in a single language with an interface layer, and thus the rest of the world. The HIEP forms the core of this Project concept. The design of the HIEP concept was informed by similar examples from around the world, including the European Patient Smart Open Services (epSOS), Canada’s Health Infoway program, Sweden’s National Patient Overview, and Singapore’s National Electronic Health Record System. 42. The Project also builds on experiences gained during Project preparation and on best practices of similar projects and studies in other countries and regions. Project preparation was carried out in consultation with a number of specialists from the GOM (mainly MOH, NCHD and ITPTA), the participating aimag hospitals, the private sector, external consultants, WHO and the World Bank Group. A Working Group chaired by the Vice Minister, and consisting of the Directors of DMEIA and Department of Policy and Planning, representatives from NCHD, ITPTA, NDC, and the Ministry of Population Development and Social Protection as well as other technical specialists served as the main interlocutor on the GOM side during preparation. The Working Group contributed to the design of the activities, using expertise gained from their experience related to the health sector and e-health in particular as well as experience in the development of similar ICT applications. C. Financial Management 43. The PIU would be responsible for managing the implementation of the Project. The World Bank loan proceeds, including overseeing the Designated Account (DA), will be managed by the PIU. A FM capacity assessment has been conducted, and actions to strengthen the Project’s FM capacity have been agreed on with MOH. The FM assessment has concluded that with implementation of the actions identified, the FM arrangements will satisfy the World Bank’s minimum requirements under OP/BP 10.00. See Annex 3 of the Project Appraisal Document for additional information on FM. D. Procurement 44. The government GPA, which acts as the procurement agency for all central GOM procurement, will manage procurement for the Project. This is in keeping with GOM policy and will remove the need for MOH to develop expertise in-house related to World Bank procurement procedures. This arrangement of handling the Project procurement will be piloted for the first two years of Project implementation, and subject to satisfactory performance by the GPA. The key risks for the Project procurement are: (a) the large workload of GPA coupled with the low capacity of its staff and unfamiliarity with World Bank procedures; (b) the intensive IT nature of the Project procurement given the history of IT contract failure in Mongolia; (c) inexperience of MOH in implementing World Bank-funded projects; (d) inadequate planning and scheduling to ensure that the Project activities can commence and be completed as planned; (e) an inadequate procurement oversight mechanism; and (f) possible elite capture and political interference in procurement. The procurement capacity and risk assessment rates this aspect of the Project overall as High. 14 45. In order to mitigate these risks the following actions were discussed and agreed with GPA and MOH: (a) a user friendly procurement manual that describes accountability and responsibility of all parties and all steps of the procurement process is developed and agreed; (b) agree on a training program (internal/external) for GPA and MOH to be implemented over the life of the Project that is both relevant and practical; (c) involve technical staff and users in preparation of specifications or hire competent consultants to draft technical specifications and TOR; (d) ensure procurement planning is realistic and ensure all parties concerned keep to the agreed schedule; and (e) provide just-in-time advice and implementation support to the relevant beneficiaries. It is expected that timely implementation of these actions may lower the risk to substantial during implementation. Annex 3 provides additional information on procurement. E. Social (including Safeguards) 46. The Project is expected to lead to substantial social benefits and expected to benefit both male and female populations as well as minors. The Project will not have nationality- or group- differentiated benefits. See Annex 3 paragraph 38 for more detail of the project’s social benefits. 47. The Indigenous Peoples Policy is triggered due to the presence of IPs in some parts of Mongolia who are project beneficiaries. Given the type of project activities, and their location in 4 pilot sites of which 3 are in or around Ulaanbaatar and one in Khovsgul Aimag, it is expected that the project benefits are the same for all groups of people including IPs. Therefore, relevant elements of the IP Policy will be directly integrated into the project design such as: consultations with IPs on project activities during implementation; ensuring the provision of culturally appropriate e-health benefits by using the IP languages in the provision of e-services; establishing the estimated number of IPs in the selected project areas and the proportion of IPs likely to have information in the system; and affording opportunities for those IPs that may not have had access to the public health facilities by providing information about e-health and addressing any concerns they may have about e-health. 48. Gender. The Gender Empowerment Measure, which indicates equality in opportunities in economic and political life, ranks Mongolia as low as 94 out of 109 countries (2009). However, women are disproportionately represented among health care professionals in Mongolia, and among the staff of lead government health institutions such as MOH, NCHD, etc. Therefore, women would be major beneficiaries of this Project’s investments to improve IT skills and capacity in the health sector. While it is beyond the Project to directly impact women’s use of health services, the Project will use its investments in information systems to track utilization by gender. Furthermore, activities supporting application development will target applications developed by women and applications that address services that may be gender specific; these will be defined in the operational manual. F. Environment (including Safeguards) 49. Only minor works such as that associated with installation of new equipment in existing offices and buildings would be needed, which may include some preparatory works. However, as this will generally be in buildings that already house some equipment, no major works are expected. As there are no adverse environmental impacts from the Project, it has been classified as a Category C, indicating that an environmental impact assessment is not required. 15 . Annex 1: Results Framework and Monitoring . Country: Mongolia Project Name: E-Health Project (P131290) . Results Framework . Project Development Objectives . PDO Statement To improve integration and utilization of health information and e-health solutions for better health service delivery in selected pilot sites. These results are at Project Level . Project Development Objective Indicators Responsibility Cumulative Target Values Data Source/ for End Methodology Data Collection Unit of Baseline Indicator Name Core 2015 2016 2017 2018 Target Frequency Measure 2014 2019 (1) Percentage of patient episodes for which HMIS and information, impact including Percentage 0.00 0.00 0.00 20.00 40.00 60.00 quarterly NHIC, PIU evaluation of medical image the pilot information is available for secure viewing at pilot facilities 16 (2) Percentage of statistical reports out of total reports HMIS and produced by impact pilot facilities Percentage 0.00 0.00 0.00 50.00 60.00 75.00 quarterly NHIC, PIU evaluation of that are the pilot transmitted electronically through HIEP to the NCHD (3) Percentage HMIS and of electronic impact referrals out of Percentage 0.00 0.00 0.00 10.00 25.00 50.00 quarterly NHIC, PIU evaluation of total referrals at the pilot pilot facilities . Intermediate Results Indicators Responsibility Cumulative Target Values Data Source/ for End Methodology Data Collection Unit of Baseline Indicator Name Core 2015 2016 2017 2018 Target Frequency Measure 2014 2019 Component 1: Health Data Project Standards are admini- developed, Text no No Yes Yes Yes Yes Annual PIU, NHIC strative validated and records promulgated by MOH 17 Component 1: Percentage of agencies which adopt and utilize Project the EA and HDS admini- in the Percentage 0.00 0.00 0.00 10.00 25.00 50.00 Annual PIU, NHIC strative construction of records software modules and communication layers. Component 2: Percentage of pilot facilities which design, Project develop, and admini- implement Percentage 0.00 0.00 0.00 20.00 40.00 80.00 Annual PIU, NHIC strative successful records piloting of eHealth Portal, Viewer and HIEP. Component 2: Percentage of digital images Project generated in admini- pilot facilities Percentage 0.00 0.00 0.00 20.00 40.00 80.00 Annual PIU, NHIC strative which are records transmitted to the central PACS. 18 Component 3: Training Center Project has been admini- designed, Text No No No Yes Yes Yes Annual PIU, NHIC strative implemented records and is ready for use. Component 4: Improvements in IT literacy Project and health admini- information Number 0.00 0.00 20.00 75.00 125.00 200.00 6-monthly PIU, NHIC strative management records capacity among health professionals Health Project personnel admini- receiving Number 0.00 0.00 20.00 75.00 125.00 200.00 6-monthly PIU, NHIC strative training records (number) . 19 Annex 1: Results Framework and Monitoring . Country: Mongolia Project Name: E-Health Project (P131290) . Results Framework . Project Development Objective Indicators Indicator Name Description (indicator definition etc.) (1) Percentage of patient episodes for which information, Denominator is the total number of patient episodes at pilot facilities. Numerator is the including medical image information is available for number of patient episodes at pilot facilities for which information, including medical secure viewing at pilot facilities image information, is available for secure viewing at the pilot facilities. (2) Percentage of statistical reports out of total reports Denominator is the total number of reports produced by the pilot facilities and produced by pilot facilities that are transmitted transmitted to the NCHD, electronically or otherwise. Numerator is the number of electronically through HIEP to the NCHD those reports transmitted electronically through the HIEP to the NCHD. (3) Percentage of electronic referrals out of total referrals Denominator is the total number of referrals into and out of pilot facilities. Numerator at pilot facilities is the number of those referrals that are electronically managed. . Intermediate Results Indicators Indicator Name Description (indicator definition etc.) Component 1: Health Data Standards are developed, Yes/No validated and promulgated by MOH Component 1: Percentage of agencies which adopt and Denominator is the number of all relevant agencies (health facilities, central utilize the EA and HDS in the construction of software government agencies) identified for the roll-out of e-health. The denominator will be modules and communication layers. determined during Year 1. Numerator is the number of agencies that adopt and utilize EA and HDS. Component 2: Percentage of pilot facilities which design, Denominator is the total number of facilities identified for the pilot tests. The develop, and implement successful piloting of eHealth denominator will be defined during Year 1. The numerator is the number of those pilot Portal, Viewer and HIEP. facilities that design, develop and successfully pilot the e-health Portal, Viewer, HIEP and PACS. Component 2: Percentage of digital images generated in Denominator is the total number of digital images generated at the pilot facilities per 20 pilot facilities which are transmitted to the central PACS. defined period (e.g. quarter, month etc). This period will be defined during Year 1. Numerator is the number of digital images, which are transmitted to the central PACS. Component 3: Training Center has been designed, No description provided. implemented and is ready for use. Component 4: Improvements in IT literacy and health This indicator will be defined during Year 1 information management capacity among health professionals Health personnel receiving training (number) This indicator measures the cumulative number of health personnel receiving training through a Bank-financed project. 21 Annex 2: Detailed Project Description Mongolia E-Health Project 1. The GOM and development partners have already made significant investments towards establishing the infrastructure and applications for e-government and e-health solutions. However, e-health investments to-date have been largely piecemeal and fragmented, preventing them from achieving their full potential in terms of improving efficiency and quality in service delivery. The strategy under this Project is to build on existing investments, while taking advantage of innovative, cloud-based technologies to foster greater integration among existing and future health information systems. Therefore, instead of designing a completely new HIS, the Project would foster the “wrapping” of the existing systems with appropriate middleware to enable them to communicate in a single language with an interface layer, and thus the rest of the world. Figure A2.1 below shows the current “as-is” information management system. Figure A2.2 shows the proposed system. Figure A2.1: The current “as-is” health information management system Notes: Under the as-is system, transfer of data is completely/mostly manual. Between health providers, there are referrals and diagnostic requests, but there is no sharing of patient health data. 22 Figure A2.2: Proposed system HOSPITAL  INFORMATION  SYSTEM  (HIS) CENTRAL HEALTH INFORMATION  EXCHANGE  CLINICIANS  INFORMATION  SYSTEM  (CIS) PLATFORM (HIEP)  AT NDC LOCAL  NATION‐ VENDOR  DIAGNOSTIC  DIGITAL IMAGING  IMAGE  WORK‐ ARCHIVE  WIDE  NEUTRAL  (CT, MRI, X‐RAY,  STATIONS US, ANGIO, etc.) (PACS) PACS ARCHIVE STANDARD STANDARD Time  HEALTH DATA  Document  Document  STANDARD Document  /  critical  STATISTICS  directory STANDARD Document  A STANDARD Data archive data MODULE  Document  B   Document HIEP  Web Services (HEALTH  repositroy C INFORMATION Enterprise  Service Bus DASHBOARD) Secure  Transport (HTTP/S) Clinicians Clinicians Clinicians Clinicians Clinicians Clinicians Clinicians AIMAG Clinicians   HOSPITAL   HIS Patients Clinicians GOVERNMENT  DISTRICT HOSPITAL  HIS SOUM HOSPITAL E‐HEALTH PORTAL.  AGENCIES Citizen.  Clinicians Secure  Transport (HTTP/S) Secure  Transport (HTTP/S) MoH, MPDSP,  Secure  Transport  NATIONAL  RESEARCH  Web Service Web Service (HTTP/S) CENTER STANDARD  STANDARD  Document  repositroy Document  repositroy Web Service Document  directory Document  directory Image viewer Digital  imaging. Workstations Digital  imaging. Workstations Notes: Under the proposed system HIEP enables secure electronic transfer of health data among all providers and government agencies. PACS, as a functional component of the HIEP, enables storing, communication and viewing of digital medical images throughout the country. Abbreviations: PACS – Picture Archiving and Communication System, CT – computed tomography, MRI – magnetic resonance imaging, US – ultrasound imaging. 2. The Project has five components: (1) e-health foundational activities; (2) clinical data collection, access and sharing; (3) NHIC; (4) institutional strengthening and capacity building; and (5) Project management. Component 1: e-health Foundational Activities (Total US$2.85 million, IDA US$2.63 million) 3. Component 1 aims to lay the foundations for successful deployment of e-health solutions and develop the pre-requisites needed for greater integration of health information between health facilities, the health insurance agency, public health agencies, private sector, etc. Component 1 thus aims to establish the roadmap and standards for e-health, and has two sub- components: 4. Sub-Component 1.1: EA development (Total US$1.93 million, IDA US$1.82 million). This sub-component aims to support the development of the domain EA for the health sector in Mongolia. Based on the feasibility study carried out as part of Project preparation and an update of the baseline survey, the need for an overall framework for the target e-health system has been identified by MOH, and a roadmap proposed for achieving this. Underlying this is the need to 23 develop a robust health EA, which would be based on the NEA framework but adapted to the specifics of the health sector based on the agreed systems development roadmap. 5. The development of the health EA, or domain-specific EA, would be implemented in partnership with national GOM agencies and with the technical assistance of the WHO as it builds on efforts already initiated by these agencies to develop a NEA and interoperability framework for the GOM. The NEA would be anchored out of the Office of Architecture and Governance in conjunction with the ITPTA’s IT Park and under the supervision of Mongolia’s Chief Enterprise Architect. Using the framework developed for the NEA, these efforts would also be supported by the World Bank’s proposed SMART Government Project at the same time as this Project, allowing for potential synergies across the two Projects and ensuring full consistency between the NEA and domain EA. WHO has already initiated work on training for the development of an EA for health, and has agreed to partner with the World Bank on this component. 6. Key activities under this component would be the analysis of current business processes of major stakeholders including key health facilities and hospitals, and the subsequent development of all the required elements of the enterprise information system. This would include development of the catalogs, matrices and diagrams for the business, data, application and technology architectures. It is intended to follow The Open Group Architecture Framework- TOGAF. This work would be carried out in close consultation with all the major stakeholders of the health sector including entities such as the SSIGO. 7. Another key activity is assessment of the legislative changes that are needed in order to make e-health functional. This includes consideration of issues such as: ownership of health data; data management regulations; access rights; data integrity; document archiving; and the validity of digital documents. See Box A2.1 for more information on this. 8. Sub-Component 1.2: HDS (Total US$0.92 million, IDA US$0.81 million). This sub- component aims to establish and share with the community of users a suite of HDS that will form the “common language” for health data integration. Such a common language is needed for computer systems to interoperate. 9. The HDS will be based on existing commonly accepted standards in the health sector (such as HL7) and will include: (a) a common messaging standard; (b) a common patient identifier based on the national ID-code; (c) a common standard for digital medical documents; (d) common coding schemes for digitally encoding diagnoses, healthcare services, providers, facilities, and possibly a hundred other such data items; and (e) the HDD that contains the precise definitions of common terms used across the health sector. To support the management and dissemination of these standards, a data standard management system would be developed and deployed so that the HDD and all HDS would be stored, published and regularly updated in one place, and to be shared publicly by all service providers and applications. For example, there would be one authoritative Diagnoses Table (based on the International Classification of Diseases-10), one Provider Table (listing all caregivers who are authorized to make health decisions), one Facility Table (listing all health facilities in the country), etc. 24 10. The HDD and the associated HDS would thereby: (a) facilitate the exchange of data across the health sector for clinical care, statistical analysis, FM, epidemiological research, and many other purposes; (b) speed up information flows; (c3) eliminate considerable “double-work” especially in data entry; (d) enhance comparability of utilization and quality statistics; and (e) provide a firm foundation for the development of future applications as well. 11. Work on developing the HDD has already begun under a World Bank grant for e-health development preparation. The task of maintaining and enforcing the use of the HDD and certifying existing HIS and other information systems as “Mongolia HDD compliant” would be an ongoing activity supported under Component 3 of this Project. It is intended under this component to finance Mongolian membership in the HL-7 consortium, a leading international health information standards body. 12. Thus, Component 1 would not only lay the foundations needed for successful e-health development, it would also provide the pre-requisites for successful integration of health information between health facilities, the health insurance fund, public health agencies etc. Box A2.1: What are the legislative issues for e-health implementation? Ownership of health data. Who owns the health data collected and archived by healthcare provider(s)? Do citizens have the right to view those data? Do citizens have the right to have a copy of their own health data? Are similar regimes applied to all healthcare providers or are there differences between of them – e.g. psychiatry, communicable diseases, etc.? Data management regulations. Do patients have the right to close their own health data from healthcare professionals? Do healthcare professionals have the right to close patient data from the patient? In the implementation of the HIEP the opt-in and opt-out concept should be discussed and settled. Access rights. Who is entitled to see patients’ files? Is this regulated by the legal acts? What measures would be adopted when violation of data privacy is recognized. Does one healthcare institution have rights to query patient’s medical data from another healthcare institution without the written consent of the patient? Data integrity. What types of medical documents are compulsory in healthcare institutions? Are the documents standardized? When is the document considered completed? Document archiving. Is there a policy for document archiving? How long should the documents be available? Is there a difference between out-patient and inpatient documents? What about medical images, e.g. x-rays? Validity of digital documents. Is there legislation regulating the validity of digital signatures? Implementation of HIEP demands that digitally approved or signed documents are as equally valid as paper documents. 25 Component 2: Clinical Data Collection, Access and Sharing (Total US$16.06 million, IDA US$12.37 million) 13. The aim of this component is to establish a solid basis for standardized data exchange between healthcare providers and users, develop the mechanism for such data exchange to take place, and pilot-test this mechanism in selected sites. This component has three sub-components. 14. Sub-Component 2.1: The e-health portal and viewer (Total US$2.12 million, IDA US$1.12 million). The aim of this sub-component is to establish a solid basis for standardized data exchange between healthcare providers and access for users to the HIEP initially, and the links between the HIS and other individual systems that may come on-line in the future. This subcomponent invests in: (a) the development of the architecture for standardized data exchange between pilot hospitals through the HIEP (see sub-Component 2.2 below); and (b) a web-portal application and links that would enable the e-health system to become fully functional over time as the appropriate data sources become available, including those from new and legacy HIS. The Project would therefore provide as a first step, a set of standardized digital documents that will be exchanged and an index to the information stored in the HIS. This sub-component also invests in the development of a security infrastructure for the Portal to assure appropriate levels of privacy and confidentiality. 15. In the future, the services provided by different HIS and e-health Portal/Viewer would also include links (Hyper-Text Markup Language or HTML-encoded) to laboratory results, diagnostic imaging and radiology reports, public health surveillance programs, waitlists for procedures etc. By creating the infrastructure and developing the health data and document standards, the Project would facilitate the establishment of links to systems as they come online through work done in other related projects. For instance, SSIGO is looking into introducing a smart card service (based on the compulsory ID-card) for health insurance, which would hold all health insurance related information for enrollees. While SSIGO would invest in the necessary privacy and security measures, hardware and software at the insurer/payer end of the system, it would be reliant on the infrastructure developed under this Project to establish the links to the HIS and the health sector, more broadly. 16. Sub-Component 2.2: HIEP including enterprise service bus and secure gateway (Total US$7.23 million, IDA US$6.38 million). The aim of this component is to develop a cloud-based HIEP, which would integrate data transmission and management across levels of hospitals and regions. The data exchange would be executed using an enterprise service bus architecture and secure gateway. Eventually, it would also integrate health insurance systems with hospitals. The HIEP would be underpinned by activities carried out under Component 1 such as the development of the EA and HDS. 17. Building the HIEP would involve the design and construction of following outputs: specifying and building the Application Programming Interfaces (API) or interconnections, which would be called by the legacy HIS and which would allow the HIS to communicate with the HIEP; the API which would communicate with H-Info; the HIEP itself, a cloud-based platform which performs passthru, message switching and data (e.g. time critical health data, audit trail) and document (e.g. patient case summaries, consents, etc.) collection and archiving 26 functionalities; the messaging platform of the HIEP which allows the organized and monitored interchange of messages between health providers; the enterprise service bus for secure internet based data exchange and gateway for user and query handling. This sub-component would consist of the following phases: design; API development; HIEP development; enterprise service bus development and alpha-testing, and possible design iterations. 18. Given the diversity of legacy systems across hospitals, existing HIS would need to be wrapped in a common interface using defined and mutually agreed digital documents, and “speak” a common language based on the HDS developed under Component 1. In particular, the wrapping of existing HIS would enable the HIS to: access data using the HIEP API; access detailed patient health records in other HIS using the HIEP passthru function; and send/receive messages (e.g., referrals) and data (e.g., laboratory reports) from other providers using the HIEP messaging function. The complexity of the wrapping work should not be underestimated, especially since it involves the mapping of the data schemas of each HIS software to the data standards developed in Component 1 and the data schemas used in the HIEP. 19. The HIEP would enable different HIS from a range of providers to exchange data via five key functionalities, which are described below. (a) Passthru function. The passthru function enables a clinician from one hospital to access patient records stored in another hospital’s HIS or particular standardized data and/or documents that are available in HIEP. For example, a person at a Soum Hospital would be able to (with proper authentication and authorization) access the information contained at the Aimag General Hospital. A person at an Aimag General Hospital would be able to access laboratory results or other diagnostic results at its Regional Diagnostic and Treatment Center. A person at a tertiary hospital in Ulaanbaatar would be able to access information at the Aimag General Hospital from which the patient was referred. These silos of important health data would now be accessible to authorized clinicians everywhere in the system. While the implementation of passthru function would be developed incrementally, under this Project, and as a first step, all connected hospitals would have access to particular standardized data and/or documents, including referral letters, consultation reports, patient summaries, etc. that are available in HIEP. (b) Messaging function. The messaging function of the HIEP supports the passing of common messages associated with healthcare transactions between facilities. These transactions include the following: (i) request a laboratory test; (ii) request a radiology examination; (iii) request an (upward) referral; (iv) request a (downward) referral; (v) verify health insurance eligibility; and (vi) other. The format of these messages would be defined by the messaging standards in Component 1. The messaging sub-system would include a reminder system (via text message, email etc.) to ensure timely responses from the recipient. For example, to send a patient upward from a Soum Hospital to an Aimag General Hospital, the clinician would send a request to the latter by filling in the referral request “form” electronically providing the reason for the referral and related clinical information and upload it to HIEP. From the HIEP, it would be accessible to all entitled medical professionals 27 and/or clinical information systems. In another example, the clinician would request a laboratory test at a Regional Diagnostic and Treatment Center for a patient using the messaging function. In the case of blood chemistry exams, the patient’s blood can be drawn at the nearest health facility, sent to the Regional Diagnostic and Treatment Center and the results would be sent back to the clinician electronically. (c) Enterprise service bus. The service bus would provide a secure internet-based data exchange layer between organizations, including public and private health facilities, the SHI agency etc. As all data exchange is conducted over the public internet, the data should be encrypted. The goal of the enterprise service bus is to improve the availability of databases without endangering their confidentiality and integrity. The system should ensure sufficient security - to allow inquiries to be made to databases and ensure the security of responses received. The enterprise service bus should be suitable for managing a dialogue between the consumer (citizen, patient, physician, other healthcare professional, civil servant, hospital, other healthcare institution, etc.) and numerous databases as well as for ensuring interoperability between application programs and databases. The technical solution is usually based on the creation of unified user interfaces for different databases rather than the transition of databases to a larger data management system. Healthcare professionals, patients, citizens and institutions can join and use services depending on their role defined by the database owner or by legal regulations. (d) Secure gateway. The identification of the person or organization should be based on a unified identification system. The implementation of a state owned enterprise service bus (such the one proposed) should take into account the legislative environment, organizational procedures, mechanisms of identification and authentication. Any organization which is connected to the service needs to be sure that messages sent or received on the exchange layer are valid. (e) Function for transmission of data files. This function enables the sending of data files (digital documents, not messages) between different users. One example of such data files would be H-Info data that is typically used for “paying” insurance claims, compiling “quality” information and collecting “utilization” data. In contrast to the current manual delivery mechanism, the HIEP can be used to send H-Info data electronically to the MOH and to relevant SHI agencies. It must be noted that access to clinical data would be provided through the e-health portal and the Viewer (Sub-Component 2.1). 20. Sub-Component 2.3: Analysis and implementation of PACS (Total US$4.85 million, IDA US$4.00 million). The aim of this sub-component is to develop and implement a central nation- wide PACS as an integral part of the HIEP for digital medical image storage, communication, distribution and viewing. The PACS would be used by all healthcare providers who are ordering, producing and/or viewing digital medical images. Images are acquired in soum, aimag or district hospitals or diagnostic centers either digitally or converted into digital format. After 28 local quality control, the images are sent to the PACS using a secure data exchange environment established with the HIEP. Images are then stored and archived in the PACS. Referring physicians, radiologists and other healthcare professionals can retrieve digital images from the PACS to their workstations through the HIEP infrastructure for viewing. Images would be distributed from the PACS using web based viewing software. The workstations used for the image viewing will be high quality sophisticated diagnostic workstations for diagnostic use or web-viewers for referring physicians, non-diagnostic viewing and patients. 21. PACS would also enable access to telemedicine information and data. Much of the data from the various telemedicine initiatives in Mongolia are difficult to access and analyze because the existing telemedicine applications have different ways of storing and organizing the data. PACS would improve the accessibility of these data and the various sources would be converted to the PACS agreed format (probably DICOM which is the standard for such data). 22. The implementation of the PACS would increase the quality of the medical imaging in Project health care institutions. It would also decrease the film and film processing costs and the performance of unnecessary exams. The PACS would integrate the images of radiology, pathology, endoscopy and other medical exams with potential digital output into one virtual database and enable development of the shared electronic environment for multidisciplinary meetings. As a result central hospitals and local hospitals could potentially have joint patient meetings in order to offer the best available treatment for the patient. 23. The deployment of this sub-component has to be conducted in two phases: (a) feasibility study and project planning; and (b) design and implementation. (a) Feasibility study and project planning. A key prerequisite for the implementation of the PACS is a thorough analysis of the current situation regarding the imaging equipment and facilities available at the healthcare institutions of the Project provinces. The report of the analysis would include the data about: (i) Current organizational structure of the healthcare (ii) Legal environment concerning sharing of digital images between different organizations (iii) Number of the radiology departments and imaging exams in the region (iv) Human resources and necessary training of healthcare personnel (v) Availability of diagnostic modalities producing digital images (vi) Properties of ICT network inside and between healthcare organizations (vii) Number of personal computers and diagnostic workstations in Project hospitals The analysis should also include a proposal for the re-engineering of workflow, description of potential barriers and predicted benefits of the investment. The estimated time to conduct the analysis and make a roadmap for the PACS implementation is 6-12 months. (b) Design and implementation. The workflow and system components for the successful implementation of the PACS are: (i) image acquisition and digitalization equipment; (ii) archiving soft- and hardware; (iii) viewing and diagnostic workstations; and (iv) distribution environment. 29 (i) Image acquisition and digitalization equipment. This part involves imaging of the patient with the available diagnostic equipment. The equipment in Project hospitals are either producing digital images (Computed Tomography, Magnetic Resonance Tomography, Ultrasound Imaging, Digital Radiography, Angiography, Nuclear Medicine, etc.) or the images are digitalized after the image capture (Computed Radiography). Procuring the digital equipment would not be financed through the World Bank e-health project. However, the project could consider investing in technology to digitize the analogue images into digital, e.g. high end scanners or phosphor plate readers, each costing from US$25,000 and above. (ii) Archiving software and hardware. This would consist of a high end server, and a large volume of storage space implemented in central location similarly to the HIEP. A second part of the archiving media would require software to manage the archive. (iii) Viewing and diagnostic workstations (for up to six facilities). Workstations would be for two different purposes of digital image viewing: 1) diagnostic viewer; and 2) simpler web-based viewers. Project hospital radiology departments would be provided with high resolution monitors and with sophisticated image viewing software for diagnostic workup of digital images. For the referring physicians and other non-diagnostic image viewing web- based viewing software would be provided. This software allows image viewing with the ordinary computers. (iv) Distribution environment for digital images. Distribution would be handled by the HIEP, meaning that there would just be an incremental cost related to image transfer. The World Bank e-health Project would finance the middle two elements – i.e. the archive and viewing – as well as image digitization for Project hospitals from the first element to a limited extent: (viii) The equipment for image acquisition in imaging departments would not be financed by the loan, and the implementation of PACS would be contingent on a feasibility assessment (item (i) above) showing PACS to be a worthwhile incremental investment (at this time). However, some limited financing could be made available for equipment that would enable digitizing of existing images. (ix) The principle cost of distribution is already being covered by the Project through HIEP. However, in the context of HIEP, only substantially small volumes of data to be transferred is considered. This means that Project hospitals which would be connected with the PACS will need the data communication environment with the ability to transfer larger amounts of digital data. 30 Box A2.2: ‘Benefits of PACS’ The replacement of analogue films in medical imaging with digital images and implementation of PACS has proven to be one of the most cost effective investments in healthcare in recent years. It is also noted that digitization of medical images has the highest value when it is not done in one hospital only but is implemented on a larger scale at the regional level. Digitization of medical images enables integration and sharing of patient diagnostic data, thus improving health care quality, allows film cost and personnel time savings, and motivates health care personnel. PACS allows for the opportunity to perform different tasks in the patient’s diagnostic and care pathway simultaneously and distribute work across clinical specialties. Simultaneous access enables time to be saved, avoids unnecessary exams and reduces repeated radiation exposure. Clinical information is available instantly for different users inside and between the health care institutions. However, the prerequisite for the implementation of PACS is thorough analysis of the current situation in ICT for health care 24. Sub-Component 2.4: IT infrastructure, maintenance and support and pilot tests (Total US$1.86 million, IDA US$0.87 million). This sub-component would finance the servers required for the HIEP (US$0.4 million), as well as the pilot testing of the clinical data exchange mechanisms developed under sub-components 2.1 and 2.2. 25. The IT infrastructure maintenance and support functions for sub-components 2.1 and 2.2 would be largely carried out by the NDC support facility. While the domain specialists from MOH would have full access to the servers to modify the functionality, further technical maintenance of the applications would rest with NDC. Services that can be expected from the NDC include preventative maintenance, repair and maintenance, upgrades to infrastructure and operating systems, virus protection, malware protection, network troubleshooting, etc. Meanwhile, the specialized e-health application support would be provided by the NHIC as second-level support to augment the facilities/capabilities of the NDC/IT-Park (see Component 3). Service Level Agreements would need to be carefully agreed to outline the responsibilities of both the NDC/IT-Park and the NHIC in installing, maintaining and supporting the e-health applications to be developed both by this Project as well e-health applications from other sources. 26. Once the pilot hospital HIS are upgraded, portal/viewer and HIEP have been developed and tested in the laboratory, pilots would be carried out in four different sub-systems of the health sector as listed below. They are referred to as sub-systems because each pilot involves a primary-level facility, secondary (aimag) hospital and tertiary hospital. The Project would 31 finance consultancy and technical services for the design and implementation of the pilots as well as the software needed. (a) Pilot 1: District Hospital to FGP, and to a Specialty Hospital and health insurance agency: (i) Songil-khairkhan District Hospital with some/most of its FGP (ii) Songil-khairkhan District Hospital to/from Hospital #3 (Cardiology center) (b) Pilot 2: Aimag General Hospital to Soum Hospitals and to a tertiary hospital in Ulaanbaatar, and health insurance agency: (iii) Tuv Aimag General Hospital to/from Hospital #1 (iv) Tuv Aimag General Hospital to 2 of its soum hospitals (c) Pilot 3: Aimag General Hospital to a tertiary Hospital to/from a Specialty Hospital, and health insurance agency: (v) Khovsgol Aimag General Hospital to Hospital #3 (cardiac and neuro cases) (vi) Khovsgol Aimag General Hospital to Hospital #1 (surgery and general cases) (vii) Hospital #1 to/from Hospital #3 (movement of cardiac and neuro cases) (d) Pilot 4: A private hospital to/from one or more of the hospitals above, and health insurance agency. IFC is considering financing for a private hospital. This hospital may thus become a fourth pilot, once the IFC financing has been confirmed and it becomes eligible for technical support. Depending on the final outcome of these pilots, and the availability of time and financing, further installations may be supported in other districts of the capital city, or in other Aimags. This decision would be taken at the Project mid-term or at later stages of the Project implementation. 27. The Project will not finance the development of any new HIS. However, the resources to upgrade pilot hospitals’ HIS to the level where they are able to produce and share particular standardized documents are included. Component 3: NHIC (Total US$2.44 million, IDA US$2.23 million) 28. The aim of this component is to establish a center that oversees all aspects of e-health in Mongolia, thus assuring the long-term sustainability of Mongolia’s e-health investments. A government resolution would be needed to create staff positions for the NHIC and determine the location of the NHIC. A minimum of two staff would be needed initially, with more staff added as the role of the NHIC expands. The establishment costs of the NHIC, including furniture and supplies would be financed under Component 3. GOM has agreed to finance the operating costs, as well as the office space, under counterpart financing. 32 29. The NHIC will also play a leading role in designing and implementing a change management strategy for e-health – see Box A2.3 – with guidance and advice provided by the Change Management Advisor recruited under this Project’s PIU (See Component 5). 30. Component 3 would finance two sub-components. 31. Sub-Component 3.1: NHIC Standards and applications (Total US$0.77 million, IDA US$0.56 million). This component would finance two different activities: (a) Standards enforcement. This activity comprises the on-going work of maintaining, disseminating and enforcing the HDS across all interested parties and stakeholders during the lifetime of the Project. The HDD would need to be updated and maintained continuously. As new vendors arrive on the market, the HIS products would need to be certified to indicated compliance with mandated standards, and monitored for compliance with those standards. With enforcement comes the need to apply penalties when vendors are deemed not to be in compliance. The NHIC would be responsible for all of these tasks. The staff and operating costs associated with this sub-component would be covered through counterpart financing. (b) Specialized e-health application support. The e-health applications would require support in the areas of clinical practice, clinical care, and other processes relating to the health venues themselves. These are best supported by individuals knowledgeable about the operations of health venues, who are sensitive to the needs of clinicians and their support staff, and who also have special knowledge of the confidentiality issues surrounding patients’ sensitive health information. Facilities at the NHIC level would eventually include a specialized Help Desk for responding to user questions as well as collecting requests from users for additional functionality, which can be considered for incremental upgrades to the e-health software in future periods. The Help Desk would require expansion of the NHIC’s staff and resources over time and would not be immediately available in the first three years of this Project. 32. Sub-Component 3.2: Health data statistics (health information dashboard) (Total US$1.67 million, IDA US$1.67 million). The Health Information Dashboard supports complex data analyses capabilities for policy development and health statistics. The data collected for and organized by the HIEP would be aggregated, cleansed and loaded into the data warehouse via an extract-transform-load process periodically to ensure data freshness. This sub-component would finance two contracts encompassing hardware, database management software, and analysis tools. 33 Box A2.3: ‘Change Management’ Why is change management important? Any new method or model implemented in healthcare must provide clear evidence of its benefits to patients and/or public health. It also has to be accepted and supported by healthcare professionals. Implementation of the HIEP requires clear and transparent definitions of expected benefits. It also demands thorough exploration of the processes of current healthcare settings and re-engineering of them according to the opportunities provided by new digital tools and applications. The changes that are implemented during the deployment of HIEP should be unambiguously governed and change management well planned. What is change management? Change management includes the description of new processes in hospitals and out-patient clinics. For data sharing and the implementation of HIEP, analogue paper based processes must be replaced by digital text, numeric data and digital processes. This prerequisite is needed at every step of the clinical pathway. Lack of digitalization of all related clinical data leads to inefficiencies preventing a more seamless, effective workflow and the sharing of information. Change management should also consider: the need to change legislative acts; the establishment of a workgroup of ethicists to find ways of balancing privacy and security of data usage and using data for secondary purposes; description of the access rights to data to provide inputs into the creation of different roles in the system; forecasting the economic impacts of the HIEP implementation on different healthcare organizations levels. Organizational implementation and change management are the cornerstones of the successful deployment of a large-scale e-health program such as this. Implementing health IT involves a complex set of relationships between individuals and organizations with competing goals and priorities. Well-planned and executed change management strategies that are centrally governed with the strong cooperation of professional societies and stakeholders have been successful in many countries. Component 4: Institutional Strengthening and Capacity Building (Total US$1.20 million, IDA US$1.20 million) 33. This component would invest in building the necessary human capacity that is vital for the successful implementation and institutionalization of e-health in Mongolia. Two types of training would be financed under this component. (a) User training. This involves training and capacity building to improve the computer literacy of health services providers through training in subjects such as: (i) basic computer literacy skills; (ii) why computers are useful in healthcare environments; and (iii) specific training in the use of the messaging platform and clinical profile systems (the applications being built under the Project). Project investments include: (i) contract for a team of educators sourced from universities in Mongolia; (ii) coursework development by the team of educators; (iii) training of trainers; and (iv) the training. 34 (b) IT technical training. This involves training to improve the IT skills and competence of NHIC staff in topics such as: (i) large-scale project management and technical management skills; (ii) network management; (iii) information security and patient confidentiality management; (iv) health statistics; (v) operations of a web-based, cloud-based facility; and (vi) operations of a health data warehouse. Support for the consultants necessary for project management. Project investments include: (i) development of course material; (ii) local and overseas training courses; and (iii) development of a suitable online technical reference library. 34. Training on EA development provided by the WHO was already initiated during Project preparation. Component 5: Project Management (Total US$1.20 million, IDA US$1.10 million) 35. This component finances the PIU, domain expert consultation, and annual M&E of the Project. The PIU would comprise a Project Coordinator, an implementation and procurement specialist, a FM specialist, EA specialist(s), a clinician who offers clinical support, and a change management specialist. The consultancies would cover the domains of HDS, health information integration and exchange, and health data analytics and warehousing. Activities of M&E include measuring of key indicators defined in Annex 1. 36. Figure A2.3 shows the timeline for the Project. Figure A2.3. e-health Project Gantt Chart 35 Annex 3: Implementation Arrangements Mongolia E-Health Project Project Institutional and Implementation Arrangements 1. The E-Health Project will be implemented by the MOH over a five-year period. 2. Organization responsible for the project. The Vice-Minister of Health, as Project Director will take overall responsibility for the Project. The DMEIA has been identified as the Implementing Agency for the Project. The Director of DMEIA will serve as the Deputy Project Director. The MOH (DMEIA), with support from its PIU (see below), will: maintain the Project accounts; request and receive disbursements; coordinate procurement, sign contracts and make payments; carry out FM and reporting activities; conduct results monitoring; and communicate with the World Bank on all issues related to the Project. 3. Beneficiary agencies. The key beneficiaries of the Project will be: at MOH, DMEIA, the Department of Policy and Planning; NCHD; the district, aimag and central hospitals participating in the pilots; the NHIC established under the Project; SSIGO and other health insurance agencies. 4. Policy and overall coordination. A Project Steering Committee, chaired by the Minister of Health, would be established by August 31, 2014 for oversight and to provide strategic policy advice and guidance to the Project, as well as to MOH. The deputy chair of the Steering Committee will be the Vice Minister of Health, who is also the Project Director. The Steering Committee would also include: the Director of the Department of Policy and Planning of MOH; the Director of NCHD; representatives from ITPTA and the NDC; representatives from the IT Council, who oversee all major Government IT developments; the Prime Minister’s IT Advisor; a representative from SSIGO; health care provider representatives, particularly from the pilot sites; and other major stakeholders involved in e-health/e-Government. The Project Steering Committee will be responsible for ensuring synergies between the E-Health and proposed SMART Government Projects as well as with the e-health project financed by the PRC. In particular, as the E-Health Project’s success will draw on the proposed SMART Government Project’s work on a NEA (see component 1 and 2 of the E-Health Project), ITPTA and MOH have agreed that the coordination would take place through the Steering Committee and that the ITPTA representative on the Steering Committee would work closely on Component 1. 5. Implementation. An e-health PIU would be established in DMEIA at MOH, and would be answerable to the Project Director and be responsible for Project implementation, including overall Project management, FM, M&E, and reporting. The GPA will carry out procurement for the Project, although the PIU will remain responsible for working with the beneficiary units to develop all technical inputs such as the TOR and technical specifications. Staff from MOH and other beneficiary units will participate in evaluating bids and proposals for their activities, and assist in supervising suppliers and consultants. 6. The PIU would hire additional staff under TOR satisfactory to the World Bank, to accommodate the expanded responsibilities of DMEIA under the Project. This would include: a 36 Project Coordinator (responsible for the day-to-day management of the Project); a change management specialist; one or more clinical support specialists as needed; one or more EA specialists; and, a FM specialist. In addition, the PIU would hire an implementation and procurement specialist that will co-ordinate with and provide assistance to GPA. The PIU would include representatives from the various MOH line departments involved in Project activities including clinical specialists and IT specialists. As and when needed, specific technical working groups will be set up within the PIU office with membership drawn from relevant MOH departments, beneficiary hospitals, agencies and consultants. These technical working groups will be given specific tasks related either to the development of TOR/technical specifications or elicitation and verification of user requirements related to the development of the systems. 7. The role of PIU will include the following: (a) coordination with the World Bank, MOH management and concerned departments, pilot sites (aimag hospitals) and other Ministries and agencies/stakeholders at the national level for overall implementation guidance, institutional arrangements and technical guidance/support; (b) implementation of the PIU activities, including, but not limited to, management of major consultancy contracts and training; (c) preparation of overall workplan, annual workplan, procurement, financial plans, regular progress and thematic reports for MOH; (d) implementation of the M&E of the Project activities, impact evaluation against the Project results framework, and performance indicators; and (e) organization of implementation support missions, mid-term review and final review. 8. A PIM will be developed by September 30, 2014 to support the PIU to meet its responsibilities for management of the Project. The Manual will describe the PIU's division of responsibilities, operational systems and procedures, including the PIU's organizational structure, office operations and procedures, finance and accounting procedures (including funds flow and disbursement arrangements), and procurement procedures. 9. Figure A3.1 depicts the Project implementation arrangements. 37 Figure A3.1. Project Implementation Arrangements Policy advice and guidance Direct reporting Financial Management, Disbursements and Procurement Financial Management 10. Based on the Project FM assessment conducted for the MOH, overall FM risk rating assigned to this Project at the appraisal stage is Substantial after mitigating measures. The World Bank’s FM team will monitor the effectiveness of the mitigation measures and Project FM risk on a regular basis during Project implementation. The capacity assessment identified several principal risks associated with the proposed implementation arrangements for the Project. In order to address the lack of knowledge and experience with regards to managing World Bank- financed projects, the following plan of action has been identified. 38 Table A3.1: FM Plan of Action Significant Actions Responsible Completion Date weaknesses Person No PIU has - The PIU should be established. MOH Before been formally - Qualified financial staff should be disbursement established. recruited and in place.   under Category 2 No experience - FM/disbursement training for the PIU MOH and Before or knowledge finance staff;  World Bank disbursement on World - A FM Manual (FMM) should be prepared MOH under Category 2 Bank to establish detailed FM procedures, operations. including chart of accounts, account description and account use. A financial - Select, implement and test an accounting MOH Before accounting and financial reporting system.  disbursement and reporting under Category 2 system has not been implemented. Disbursement and Funds Flow Arrangements 11. The Project proceeds will be disbursed against eligible expenditures according to the following table: Table A3.2: Disbursements Amount of the Amount of the Percentage of Financing Financing Expenditures to be Category Allocated   Allocated   Financed (expressed in (expressed in (inclusive of Taxes) USD)  SDR) 1) Goods, non consulting 1,100,000 750,000 100%  services, consultants services, and Incremental Operating Costs for Component 5 of the Project 2) Goods, non consulting 18,400,000 11,950,000 100%  services and consultants services for Components 1, 2, 3 and 4 of the Project  TOTAL AMOUNT  19,500,000 12,700,000 12. Four disbursement methods (advance, reimbursement, direct payment, and special commitment) are available for the Project and would be used. The primary method of disbursement for the Project will be advance. Supporting documents for World Bank disbursements will be the World Bank Withdrawal Application, statements of expenditures or 39 records such as contracts and invoices. The detailed requirements will be laid out in the Project Disbursement Letter to be issued by the World Bank. 13. The funds flow of the Project would be as follows: World Bank Direct Payment Designated Account (DA) Operating Account (OA) Petty cash Contractors and Suppliers 14. The PIU will maintain and manage one DA, in United States dollars and one OA in Mongolia Tugrik at a commercial bank, on terms and conditions satisfactory to the World Bank, including appropriate protection against set-off, seizure and attachments. The ceilings of the DA and OA will also be stipulated in the Disbursement Letter. 15. The PIU would be directly responsible for the management, maintenance, reconciliations of the DA and OA balances and will prepare Withdrawal Applications. The Withdrawal Applications submitted to the World Bank will be signed off by the authorized representatives from the MOH and the Ministry of Finance. 16. The DA would be used to pay the main Project expenditures with approvals from the Ministry of Finance and MOH, and the OA would be used to pay incremental operating expenditures with an approval from the MOH. Use of OA advances will be reconciled with the DA expenditure on a monthly basis and an outstanding balance of the OA will be reported as a separate item in the DA reconciliation statement. 17. Withdrawal Applications and their relevant supporting documents should be made available for review by auditors and World Bank supervision missions. If the auditors or the World Bank find any disbursements that are not justified by supporting documentation or made for ineligible expenditures, the World Bank may take necessary actions in line with related policies. 18. Finally, accounts of World Bank-financed projects may move into the Treasury Single Account System within the Government Financial Management Information System. If/when such a change takes place, the DA arrangement will be revised accordingly. 40 19. Budgeting. A Project annual disbursement plan with a timetable by quarter will be prepared by the PIU and approved by the Project Steering Committee and thereafter sent to the World Bank for approval. The PIU will prepare a work plan and budget for the entire implementation period of the Project, with quarterly/annual breakdowns, which will identify the detailed Project activities. 20. Accounting and Financial Reporting. PIU administration, accounting, and reporting would be set up for this Project in accordance with World Bank requirements, which obligates Borrowers to prepare financial statements in accordance with acceptable accounting standards. The World Bank encourages the adoption of formats laid out in the International Public Sector Accounting Standards, and Financial Reporting under the Modified Cash Basis of Accounting, in order to monitor any non-cash transactions. The PIU will adopt the cash basis of accounting for preparing financial statements. The Project financial statements will include the following: (a) Balance Sheet of the Project; (b) Statement of Sources and Uses of Funds by Project Components; (c) Statement of Implementation of Financing Agreement; (d) Statement of DA; and (e) Notes to the Financial Statements. 21. The PIU will prepare IFRs that will be submitted to the World Bank on a quarterly basis within 45 days after the end of each calendar quarter. Mitigating actions need to be implemented timely as agreed above in order to complete accounting financial arrangements of the Project. 22. Internal Control. Appropriate internal control procedures in Ministry of Finance, MOH, the Project Steering Committee, and the PIU will be maintained for the Project activities. Proper authorization for payment approvals, segregation of duties, and other internal control mechanisms will be defined and included in the FMM. The procedures in the FMM should be fully and adequately implemented by all the parties involved. 23. Audit Arrangements. The GOM will appoint an independent external auditor, acceptable to the World Bank, to conduct annual audits of the Project’s accounts in accordance with International Standards on Auditing, under TOR satisfactory to the World Bank. The annual audit report of Project financial statements will be due to the World Bank within six months after the end of each fiscal year. This requirement is stipulated in the Financing Agreement. The responsible agency and timing are summarized as follows: Audit Reports Submitted by Date Due Project Financial Statements PIU under MOH June 30 of each calendar year 24. The auditors will: (a) express an opinion on the Project financial statements; (b) determine whether the DA has been (i) correctly accounted for, and (ii) used in accordance with the legal agreement; and (c) determine adequacy of the supporting documents and controls surrounding the use of statement of expenditures (as the basis for disbursement). The auditors will furnish a separate Management Letter, which will: (a) identify significant weaknesses in 41 accounting and internal control as well as asset management; (b) report on the degree of compliance with financial covenants of the Financing Agreement, and (c) communicate matters that have come to the attention of the auditors which might have a significant impact on the implementation of the Project. 25. Supervision Plan. The supervision plan for this Project will be based on its FM risk rating, which will be evaluated on a regular basis by the FM Specialist in line with the FM Sector Board’s FM Manual and in consultation with the task team leader. In the initial stages of the Project implementation, FM reviews will focus on the following areas: (a) The PIU’s adherence to the procedures identified in the Project FMM; (b) Timeliness and accuracy of the Project accounting and financial reporting; and testing of the software; and (c) Review of relevant documents supporting the Project expenditures incurred for completeness and appropriateness. Procurement 26. Risk Assessment. Procurement for the Project would be managed by GOM’s GPA, which acts as the ‘procurement agent’ for all central GOM procurement. This is in keeping with government policy and will remove the need for MOH to develop expertise in-house. This arrangement of handling the Project procurement will be piloted for the first two years of the Project implementation period, and subject to satisfactory performance by the GPA. GPA is a new specialized agency with 56 staff and has the following 8 divisions: administration, M&E; legal; training & public awareness; works; goods; consulting services; and information and technology. Although the GPA staff is new and inexperienced, both the Government and donors attach great importance to building capacity of the staff. As of November 2013, GPA is delegated to handle 399 projects and contracts. As of May 2013 GPA has been lagging behind the plan, however, mainly due to delays with sending bidding documents by ministries/government agencies and handling by the agency of procurement of too many contracts that are supposed to be handled at the aimag level. The procurement oversight mechanism was removed with adoption of the procurement law amendments. MOH, as the Project implementing agency, will be responsible for developing the TOR and technical specifications for all packages procured under the Project. MOH has a limited number of people that are IT literate and does not have prior experience in implementing World Bank funded projects. Although the local procurement law is clear about roles and responsibilities of the GPA and government line ministries, during the assessment it was observed that MOH is hesitant to transfer the procurement responsibility to GPA. 27. The key risks for the Project procurement are: (a) the large workload of GPA combined with the low capacity of its’ staff, particularly in respect of IT procurement; (b) inadequate IT capacity of MOH and inexperience in implementing World Bank funded projects; (c) inadequate planning to ensure that the Project activities can commence as planned coupled with inadequate 42 experience in contract management; (d) inadequate public procurement oversight mechanism; and (e) possible elite capture and political interference in procurement. The procurement capacity and risk assessment rates the Project overall procurement risk as High. 28. Mitigation Measures. In order to mitigate these risks the following actions were discussed and agreed with GPA and MOH: (a) a user friendly procurement manual that describes accountability and responsibility of all parties and all steps of the procurement process is developed (b) carry out a training program (internal/external) for GPA and MOH to be implemented over the life of the Project that is both relevant and practical; (c) involve technical staff and users in preparation of specifications or agree to hire competent consultants to assist with drafting technical specifications and TOR; (d) ensure procurement planning is realistic and ensure all parties concerned keep to the agreed schedule; and (e) provide just-in-time advice and implementation support to the relevant beneficiaries. It is expected that timely implementation of these actions may lower the risk to substantial during implementation. 29. Applicable Guidelines. Procurement will be carried out in accordance with the “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011; and “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011 and the provisions stipulated in the Financing Agreement. 30. Procurement of Works and Supply and Installation. No works are expected to be procured under the Project. Similarly there will not be supply and installation of facilities, however supply and installation of Information Systems may be used for the design, development for the implementation of the HIEP and the design and development of the data warehouse under Components 2 and 3 respectively. The World Bank’s Standard Bidding Documents shall be used, and the specific Standard Bidding Documents for procurement of IT systems, both single and 2 stage, may be used. 31. Procurement of Goods and non-consulting services procurement. Goods to be procured under the Project will include server computers, computers, office equipment and furniture. The World Bank’s Standard Bidding Documents shall be used for all Supply of Goods involving international competitive bidding. Sample bidding documents agreed with the World Bank shall be used for all national competitive bidding. In addition the majority of the IT-related system development shall be procured under international competitive bidding, however, using the non- consulting services’ standard documents, which are considered to better match the nature and requirements of these procurements. This will be used for the EA and standards under Component 1, the design and development of the patient portal and clinical viewer and potentially for the pilot testing under component 3. 32. Procurement of Selection of Consultants. The Project will finance various international and local consulting services for each component of the Project. The World Bank’s Standard Requests for Proposals shall be used for all consulting services contracts with consulting firms. Selection of individual consultants will follow paras. 5.1 to 5.6 of the Guidelines – Selection and Employment of Consultants and will be used for the hiring of the PIU. 43 33. While at this point in time it is not foreseen that there would be any need for either Direct Contracting and/or Single/Sole Source selection, in case such a need arises procurement will be carried out in accordance with paragraph 3.7 of the Procurement Guidelines and paragraphs 3.8 to 3.11 (for firms) and paragraph 5.6 (in the case of an individual) of the Consultants Guidelines, as appropriate, and if a need is identified during Project implementation. 34. Training and Workshops. The PIU shall prepare learning plans as part of annual work plans for World Bank review and no objection. The plan shall include details of the learning event including description, learning objectives, indicators, type (e.g., workshop, conference, meeting, focus group discussions, study tour), target group, number of participants, details of trainers, location, dates, cost breakdown and other details as the World Bank may request. Any modification to the plan requires World Bank review and no objection. 35. Procurement Plan. The MOH is preparing a procurement plan for contracts to be procured by the GPA during the first 18-months of Project implementation. The procurement plan will be agreed with the World Bank by negotiations. It will be made available in the Projects Database and on the World Bank’s external website. The procurement plan will be updated annually or as required to reflect implementation needs and improvements in institutional capacity. 36. Thresholds for Procurement Methods and Prior Review. The procurement plan for the contracts to be procured centrally by GPA shall set forth those contracts which are subject to prior review by the World Bank. The thresholds are provided in Table A3.3. Table A3.3: Procurement Thresholds Prior Review Thresholds Procurement/Selection Method Thresholds ($million) ($million) ICB NCB Shopping QCBS QBS CQS SSS Goods First 2 NCB goods ≥0.3 <0.3 <0.1 contracts irrespective of value and all contracts ≥0.2 Works First 2 NCB works ≥3.0 <3.0 <0.2 contracts irrespective of value and all contracts ≥0.5 Consulting First contract for each -- -- <0.3 -- Services selection method and all contracts ≥0.1 provided by firm, ≥0.02 for SSS (individual and firms) Note: (a) “—” refers to No Threshold. (b) All Direct Contracting subject to prior review. ICB (International Competitive Bidding) QCBS (Quality- and Cost-Based Selection) CQS (Cost and Quality Based Selection) QBS (Quality Based Selection) NCB (National Competitive Bidding) SSS (Single-Source Selection) 44 37. Frequency of Procurement Supervision. Procurement Supervision by the World Bank will be carried out once a year. Procurement post review will be carried out once a year. The sampling ratio will be at least 1 in 5 contracts. Environmental and Social (including safeguards) 38. The Project is expected to lead to substantial social benefits and expected to benefit both male and female populations as well as minors. The Project will not have nationality- or group- differentiated benefits. The main social impacts of the Project will be easier access to health related information for the population as patients will benefit from improved, more efficient health service delivery. The Project will (a) enable direct and indirect improvements in overall health service delivery because the Project will reduce the costs of interacting with service providers and improve the efficiency of health service provision resulting from an increased volume of health information (clinical results) available through the exchange platform; (b) enable the health care providers to use ICT to provide services more effectively and efficiently; and (c) reduce the perception of isolation and enhance health care services provision in rural areas. The Project will not have any adverse social impacts. 39. The Indigenous Peoples Policy is triggered due to the presence of IPs in some parts of Mongolia who are project beneficiaries. Given the type of project activities, and their location in 4 pilot sites of which 3 are in or around Ulaanbaatar and one in Khovsgul Aimag, it is expected that the project benefits are the same for all groups of people including IPs. Therefore, relevant elements of the IP Policy will be directly integrated into the project design such as: consultations with IPs on project activities during implementation; ensuring the provision of culturally appropriate e-health benefits by using the IP languages in the provision of e-services; establishing the estimated number of IPs in the selected project areas and the proportion of IPs likely to have information in the system; and affording opportunities for those IPs that may not have had access to the public health facilities by providing information about e-health and addressing any concerns they may have about e-health. 40. Gender. The Gender Empowerment Measure, which indicates equality in opportunities in economic and political life, ranks Mongolia as low as 94 out of 109 countries (2009) and reflects in particular women’s limited participation in public decision making 1 . However, women are disproportionately represented among health care professionals in Mongolia, and 1 Although the share of women in parliament increased significantly in the June 2012 elections, the current rate of 14.5 percent is much below the national MDG target of 30 percent female representation in parliament by 2015. In the Government’s latest response to the implementation of the commitments made under the Committee on the Elimination of Discrimination Against Women (CEDAW), it reports that at the implementation level, female members of People’s Representative Khurals of aimags, the capital city, soums and districts cover 24.6 percent of all representatives of local Khurals (2008). Thus, the political interests and activities of rural women are relatively high and access easier than at national level. On the other hand, the participation of women in the law making and policy formulation levels is weak, and women’s involvement is relative high at the policy implementation level, only. Mongolia has traditionally had strong participation of women in the civil society sector, however women’s representation necessary to influence public decisions that represents women’s needs and highlight gender issues is still a work in progress (MONES). (World Bank, 2013, Mongolia Gender Action Plan).    45 among the staff of lead government health institutions such as MOH, NCHD etc. Therefore, women would be major beneficiaries of this Project’s investments to improve IT skills and capacity among health care workers as well as staff in central health institutions. While it is beyond the Project to directly impact women’s use of health services, the Project will use its investments in information systems to track utilization by gender. Furthermore, activities supporting application development will target applications developed by women and applications that address services that may be gender specific (to be defined in the PIM). 41. No civil works will be supported under the Project and hence no movement of persons from land will take place, therefore Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12) are not triggered. Only minor works such as that associated with installation of new equipment in existing offices and buildings would be needed, which may include some preparatory works. However, as this will generally be in buildings that already house some equipment no major works are expected. The Project does not affect natural habitats (OP/BP 4.04), Forests (OP/BP4.36), or Physical Cultural Resources (OP/BP 4.11) so these are not triggered. The Project will not construct or rehabilitate any dams so Safety of Dams (OP/BP 4.37) is not triggered, and projects on International Waterways (OP/BP 7.50) is not triggered since the Project is not being implemented on an international waterway, or in a disputed area. No pesticides or increased use of pesticides is expected so Pest Management (OP/4.09) is not triggered. Hence, there are no adverse environmental impacts from the Project. In accordance with the World Bank Safeguard policies on environment (OP/BP/GP4.01 Environment Assessment) the Project has been classified as a Category C, indicating that an environmental impact assessment is not required. 42. Indirect positive impacts may be derived from a small reduction in use of transportation services in response to improved electronic delivery of health services, in particular access to examination and test results and making appointments with appropriate specialist providers. Monitoring & Evaluation 43. The progress and achievement of the PDO will be monitored and assessed through four types of M&E activities: (a) regular/routine monitoring; (b) mid-term review; (c) completion review; and (d) impact assessments specifically for the pilots under Component 2. A set of results monitoring indicators has been developed to measure Project outputs, intermediate outcomes, and final development outcomes (see Annex 1). To the extent possible, the results M&E arrangements for the Project will be integrated into the existing data collection and utilization mechanism at MOH, NCHD and health facilities. 44. Regular monitoring will look at the extent to which the proposed Project activities are being implemented as planned as well as direct outputs. A mid-term review will be conducted during the third year of Project implementation to assess initial impacts of Project activities. 45. The impact assessment of the pilots would be built into the design of the pilots. This would include baseline surveys, which would be repeated at regular intervals during the pilots (see Annex 1). Given that many of the outcomes probably vary by clinical condition (e.g. type of referral, number of lab tests, type of follow-up care needed etc.), the impact assessment of the pilots will focus on specific tracer conditions that will be identified later. Diabetes and liver 46 cancer are two possible candidates for tracers because of their high prevalence in Mongolia, and because clinical protocols exist for effective early detection and management of these diseases. Role of Partners 46. WHO will provide training and technical assistance under Component 1. This will be in- kind support provided within the timeline and organizational framework of this Project. The PRC-financed E-Health Project will invest in HIS, potentially for all public hospitals in Mongolia. It would be important for the technical teams working on Components 1 and 2 to coordinate closely with the PRC project technical teams. The Project Director, who is effectively responsible for all of these three initiatives, will provide overall guidance and supervision, and the Project Steering Committee would ensure coordination between these initiatives. 47 Annex 4 Operational Risk Assessment Framework (ORAF) Mongolia: E-Health Project (P131290) . Risks . Project Stakeholder Risks Stakeholder Risk Rating Substantial Risk Description: Risk Management: a. Task team has maintained close contact with senior leadership at MOH who are the champions for e- a. Government/Parliament: Government health. The main counterpart during preparation was a Working Group chaired by the Vice Minister, and reverses its current interest in moving comprising a broader range of stakeholders from the government health sector, as well as agencies like forward in the e-government, and more ITPTA and NDC who are strong proponents of e-Health. This Working Group has helped create a broader specifically in the health sector, the base of support for the project than what senior leadership at MOH alone could provide. During implementation of the e-health strategy. implementation, a Steering Committee is proposed with the same or similar composition to this Working Group. b. Donors: Duplicative efforts bring about inefficiencies, while lack of coordination Resp: Bank Status: In Stage: Both Recurrent Due Frequency with the PRC-financed hospital information Progress : Date: : systems project undermines usefulness of Risk Management: the health information exchange platform. b. Within the health sector, WHO has significant convening power over government and donors. During c. Beneficiaries: Central health sector preparation, the World Bank worked closely with WHO to encourage greater coordination amongst agencies and hospitals lack capacity to donors. During the September 2013 preparation mission, WHO organized a workshop that included all of implement the system. the donor agencies involved in e-health, along with government and NGO groups to discuss the e-health roadmap. These types of activities would be continued during implementation, particularly as WHO is partnering with the World Bank in this project. Resp: Both Status: In Stage: Both Recurrent Due Frequency Progress : Date: : Risk Management: c. Capacity building is a major element of the project (Components 3 and 4). Resp: Both Status: Not Yet Stage: Both Recurrent: Due Frequency Due Date: : 48 Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Substantial Risk Description: Risk Management: a. Financing for contracting of sufficient capacity to support the implementing agency is provided for a. No prior experience in implementing under the Project. World Bank projects. Resp: Both Status: Not Stage: Both Recurrent: Due Frequency b. Limited fiduciary capacity/experience, Yet Date: : particularly in the procurement of large, Due complex IT systems. Risk Management: c. Insufficient capacity to design and b. The General Procurement Agency (GPA) will support the project on procurement. The project will implement the main technical components finance expert resources at the CPA as well as the PMU, and will provide just-in-time implementation (Components 1 and 2). support to ensure adequate capacity is maintained. Resp: Both Status: Not Stage: Both Recurrent: Due Frequency d. Project Implementation Manual will Yet Date: : only be completed soon after Effectiveness Due Risk Management: c. Financing to contract appropriate technical assistance is provided for under the Project. Resp: Both Status: Not Stage: Both Recurrent: Due Frequency Yet Date: : Due Risk Management: d. Initial work on the PIM has already begun. The World Bank team will provide support by hiring staff with previous experience with World Bank PMUs Resp: Both Status: Not Stage: Both Recurrent: Due Frequency Yet Date: : Due Governance Rating Substantial Risk Description: Risk Management: The current institutional arrangements Financing agreement to indicate implementation arrangements, and regular implementation reviews will prove to be weak and inadequate to provide be carried out and capacity building provided if necessary during implementation. Project management guidance and oversight on project capacity strengthened based on needs. The frequency of the Steering Committee meetings would be implementation. increased to provide guidance on overall project issues. 49 Resp: Both Status: Not Stage: Imple Recurrent: Due Frequency Yet menta Date: : Due tion Project Risks Design Rating Substantial Risk Description: Risk Management: a. MOH already recognizes the critical role it needs to play to mitigate this risk. Project design has taken a. The core of this project relies on into account the importance of change management, and included aspects of this in the implementation compliance of health facilities and other arrangements. institutions with the selected interface layer, as well as MOH’s ability to enforce Resp: Client Status: Not Stage: Both Recurrent: Due Frequency the use of the standards (HDS). MOH’s Yet Date: : inability to enforce the use of the standards Due and/or health facilities’ resistance to adopt Risk Management: the new standards could undermine the project interventions. b. Applications that do not require continuous access to the internet will be developed Resp: Client Status: Not Stage: Both Recurrent: Due Frequency b. The project relies on the use of internet- Yet Date: : based technologies in an unproven internet Due environment. Risk Management: c. Technical complexity. The project has a c. The project will streamline the number of procurement packages and will phase the activities (based on number of high value IT procurements and the EA and roadmap). The phasing of activities will also be adjusted during implementation, depending on government has limited implementation the demonstration of technical and fiduciary capacity. Additional specialized experts in specific areas will capacity. The design has to be sufficiently help on design and supervision during implementation. The team will provide just-in-time advice during flexible to cater to rapid changes in the key phases in implementation. industry and technological landscape Resp: Both Status: In Stage: Both Recurrent Due Frequency Progress : Date: : Social and Environmental Rating Low Risk Description: Risk Management: The project consists largely of IT N/A applications and services, which are not Resp: Status: Stage: Recurrent: Due Frequency likely to have any adverse environmental or Date: : social impacts. Program and Donor Rating Substantial 50 Risk Description: Risk Management: Fragmented support without a coordinating Implementation teams will continue to follow-up with partners supporting the health sector to ensure mechanism for such support may lead to greatest synergies possible. duplication of effort or missed Resp: Both Status: In Stage: Both Recurrent Due Frequency opportunities (i.e., ensuring compatibility Progress : Date: : of services and/or hardware with activities proposed for support under this Project). Delivery Monitoring and Rating Substantial Sustainability Risk Description: Risk Management: The design supported by the Project is not Relevant remedies and recourse will be included in the terms of reference for the design of the HIEP. flexible enough for use as the information Resp: Both Status: Not Stage: Both Recurrent: Due Frequency technology sector grows and changes. Yet Date: : Due Overall Risk Overall Implementation Risk: Substantial Risk Description: The implementation risk rating is expected to be substantial. 51 Annex 5: Implementation Support Plan Mongolia E-Health Project 1. The Implementation Support Plan focuses on mitigating the risks identified in the ORAF, and aims at making implementation support to the client more flexible and efficient. The aim of the support plan is to provide the technical advice necessary to facilitate achievement of the PDO (linked to results/outcomes identified in the result framework), as well as identify the minimum requirements to meet the World Bank’s fiduciary obligations. (a) Procurement. Implementation support will include: (i) leveraging the PIU in MOH; (ii) providing additional staff and training as needed to MOH to assist with preparation of technical specifications and TOR; (iii) reviewing procurement documents and providing timely feedback to the beneficiary agencies and to GPA; (iv) providing detailed guidance on the World Bank’s Procurement and Consultant Guidelines to the PIU and GPA; and (v) monitoring procurement progress against the detailed Procurement Plan. (b) FM. Implementation support will include: (i) reviewing of the country’s FM system, including, but not limited to, accounting, reporting and internal controls; (ii) leveraging the PIU; (iii) hiring additional staff and providing training as needed to the PIU; and (iv) reviewing submitted reports and providing timely feedback to the PIU. (c) Other Issues. Sector level risks will be addressed through policy dialogue with the MOH and other stakeholders and agencies. Implementation Support Plan 2. While Mongolia has adequate experience in implementing World Bank projects, and despite the World Bank’s own experience in preparing similar projects, the relative complexity of structuring and implementing an e-health solution will require fairly intensive supervision, especially during the first two years of implementation and whilst work on the foundations is being carried out. The World Bank team members will be based either in Washington, D.C., or in country offices, and will be available to provide timely, efficient and effective implementation support to the clients. Formal supervision and field visits will be carried out at least three times annually in the first two years, with two annual visits in later years of the Project. These will be complemented with regular video conferences to discuss Project progress. Detailed inputs from the World Bank team are outlined below: (a) Technical and policy inputs. Technical and policy related inputs will be required to review bid documents to ensure fair competition, sound technical specifications and assessments, and confirmation that activities are in line with the MOH E-health Strategy and GOM’s other strategies related to ICT and economic growth. (b) Fiduciary requirements and inputs. Training will be provided by the World Bank’s FM and procurement specialists as needed. The World Bank team will help 52 identify capacity building needs to strengthen FM capacity, and to improve procurement management efficiency. FM and the procurement specialists will be based in the region to provide timely support. Formal supervision of FM will be carried out semi-annually or annually, while procurement supervision will be carried out on a timely basis as required by the needs of the client. (c) Safeguards. Inputs from environment and social specialists will be provided as needed. (d) Operation. The Task Team will provide day-to-day supervision of all operational aspects, as well as coordination with the clients and among World Bank team members. Relevant specialists will be identified as needed. Time Focus Skills Needed Resource Estimate Partner Role First 12 Finalization of Technical Procurement, FM, Health and e-health Lead in drafting months Specifications/TORs, legal, and Technical specialists: 8 SWs technical legal/procurement Specialists Procurement Specialists specs/TORs arrangements 10SW FM Specialist 5SW 12-48 Procurement, Procurement, FM, Health and e-health months Deployment of Systems, Technical, Safeguard/ specialists: 8 SWs for Applications/Solutions, Environment Procurement and FM Specialists specialist(s) 10SWs Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Task team leader 8 SWs annually Fieldtrips as required. DC or Country office based Procurement 10 SWs annually Field trips as required. Country office based FM Specialist 5 SWs annually Field trips as required. Country office based Technical Specialists 5 SW annually Field trip as required. Globally sourced Partners Name Institution/Country Role J. Amarsanaa Vice Minister of Health Chair of the Steering Committee Tsolmongerel Ts. Director, MOH Director – project preparation Tugsdelger S. Director, MOH Project Director Khurelbaatar MOH Chief Technology Officer Bat-Erdene National Centre for Health Development Technical counterpart Bayanmunkh Health Sciences University Technical counterpart Soe Nyunt-U WHO WHO counterpart 53 Annex 6: Economic and Financial Analysis Mongolia E-Health Project Project Rationale 1. The implicit need in Mongolia for the proposed component activities is high since there is significant scope to move toward a more integrated and efficient HMIS in this country. Although HIS already exist in nearly half of all central, aimag and regional hospitals in Mongolia, they are fragmented across different health facilities and provinces. The flow of patient information remains localized since various information systems lack interoperability (or are unable to communicate with each other in a common language). Several factors specific to the HMIS impede effective and timely information exchange in the health sector, and complicate the procedures in service delivery: (a) Lack of a robust EA for the development of e-health activities (b) Inconsistent data formats, coding schemes and timing of information delivery due to lack of HDS (c) Lack of data interchange between different HIS to match up information about patients, and no linkage to the wider administrative and financing systems (d) Incomplete data in existing health information system limits the ability to create useful, consistent “maps” for tracking diseases, especially in chronic diseases (e) Limited IT literacy and capacity, and fragmented IT resources to manage a modern health information system 2. In light of these challenges, the E-Health Project fits naturally into the development vision of Mongolia’s health sector for the next decade, which is laid out in the Government’s E- Health Strategy (2011-2015). The key tasks expressed in the Strategy include strengthening HMIS, building capacity for e-health and creating an enabling environment for e-health. These are precisely the areas targeted by the Project through investments to improve the integration of patient management information systems in selected sites. Rationale for Public Financing and Bank Value-added 3. There is strong rationale for public financing because most of the activities financed under the Project, such as EA, HDS, NHIC are essentially pure public goods. They are non- excludable because individual health facilities and other institutions cannot be prevented from using the EA, HDS, NHIC etc., once they have been made publicly available. They are non- rivalrous because the provision of these services to one health facility does not reduce the availability or value of such services to others. In fact, the more individuals use these services, the greater the return on these investments due to enhanced inter-operability and information integration. As with most public goods, the private sector has little incentive to invest in these public goods.   54 4. Public investment in the Project is also justified for the significant positive externalities associated with achieving efficiency in service delivery and cost savings in the health sector through the HIEP. In principle, private sector firms, particularly those firms that have already invested in HIS in Mongolia, could develop the HIEP and charge fees for the use of the HIEP. There is a growing interest among the private sector in Mongolia in developing HIS systems. However, the private sector has no incentive to enforce the same HDS and thus ensure that different HIS can talk to each other. As the Mongolian health system matures, with expansion of SHI coverage and enforcement of referral mechanism, it would require greater integration of information between facilities. Given that HIEP is a service function necessary for the public sector to guarantee inter-operability, exclusion of certain facilities that do not pay for HIEP would become inefficient. If implemented properly, the public provision of a system-wide HIEP would improve referrals between health facilities, strengthen coordination of care, and thus improve cost-effectiveness of service delivery. 5. Furthermore, the risk of investing in the single wholesale exchange system is very high for private sector engagement: the cost of developing a national HIEP is significant as it involves understanding each hospital's HIS data model and integrating various systems. Since the revenue from investment is unlikely to be significant enough to offset the high development cost, private sector’s financing of such activities is unlikely. Therefore, these activities can only be accomplished and implemented through government interventions. 6. The World Bank’s value-added arises from the task team’s technical expertise as well as the global knowledge experience in areas such as health information systems, use of ICTs for delivery of public services, etc. International procurement of healthcare IT investments is a complex undertaking and needs expert support to maximize efficiency and quality. By involving the World Bank as a financier, Mongolia’s E-Health Project could benefit from World Bank’s quality assurance, Project design and implementation management, policy advisory skills as well as extensive experience with HIS projects in other countries such as Kazakhstan, Latvia, Lithuania, Macedonia, etc. The World Bank also has expertise on policy dialogue and the full- spectrum of implementation related issues in the health sector. The Project would also take advantage of other complementary, World Bank financed projects in Mongolia such as the proposed SMART Project, and collaborate with development partners such as WHO, to identify potential synergies and optimize benefits from the investment. Economic Analysis 7. Quantitatively estimating the net present value of benefits of investments through cost- benefit analysis is not very meaningful in the case of health projects. Not only is it difficult to assign a monetary value to expected improvements in health outcomes, it is also difficult to reliably estimate the impact of the Project’s investments in infrastructure and training on health outcomes. Another challenge associated with doing a full cost-benefit analysis is that the evidence base for making assumptions about the impact of Project activities on health outcomes is quite weak. 8. Given that the main thrust of this Project is on improving efficiency in health service delivery, the approach taken here is to identify the mechanisms through which Project interventions would improve efficiency, and estimate cost savings where possible. The analysis 55 does, however, quantify one expected benefit of the Project: cost savings through improvements in the efficiency of the referral process. 9. The current referral process is quite inefficient and costly, in large part because the lack of interoperability between existing HIS makes it difficult to electronically share clinical data between facilities. Inefficiencies on the provider side result from: (i) diagnostic tests being duplicated during the referral process; (ii) delays in getting approval for the referrals due to slow communication between hospitals; and (iii) unnecessary administrative work as patients carry their paper medical records with them for each referral, and (iv) hospital staff enter the patient information into the local system each time the patient is admitted. On the user side, this implies significant additional transport costs and opportunity costs of time spent waiting as the referral process often requires multiple visits. As the result, some patients bypass the primary care facilities (soum and district hospitals) and go directly to higher level hospitals, incurring the higher co-payments and informal payments. The total number of inpatients at central hospitals, the Regional Diagnostic Treatment Centers, and aimag general hospitals has increased between 2010 and 2012, but the percentage of referred patients from lower levels of care has decreased (Table A6.1). Table A6.1: Inpatients and Percentage of Inpatient Referrals in Health Facilities (2010-2012) 2010 2011 2012 Central Hospitals and Specialized Centers Number of inpatients 135,248 137,929 141,381 Percentage of inpatients referred from the lower 24.8% 25.2% 22.6% level Regional Diagnostic and Treatment Center Number of inpatients 46,249 43,163 49,417 Percentage of inpatients referred form the lower 31.1% 27.6% 26.3% level Aimag General Hospital Number of inpatients 123,750 127,414 125,369 Percentage of inpatients referred from soum health 16% 16.5% 13.7% centers and inter-soum hospitals Source: Mongolia Health Indicators 2012, MOH. 10. This Project’s investment in an integrated HIS would improve the efficiency of the referral process by: (i) facilitating speedier information flows; (ii) controlling the volume of lab tests and prescriptions more effectively; (iii) ensuring better clinical reporting (for tracer conditions like diabetes under the pilots); and (iv) reducing the administrative burden related to patient data entry. Overall, this should make the two-way referral process much faster. Though the welfare gain related to time savings is hard to quantify given the lack of baseline information on current referral time and shadow costs, it is anticipated that the electronic exchange of clinical data between Soum and District Hospitals, Aimag General Hospitals, Regional Diagnostic and Treatment Centers, FGPs and tertiary hospitals via the functionalities outlined in Component 2 would dramatically reduce time and opportunity costs for hospital staff who operate local HIS. From a broader health sector perspective, streamlining the referral process would increase both 56 allocative and technical efficiencies, and is associated with greater cost savings for the health sector. 11. The following analysis, which estimates potential cost savings in a selected pilot facility (Tuv Aimag Hospital) through reduction of unnecessary lab tests and diagnostic tests, was carried out to illustrate the possible gains from the Project2. The estimates are based on the following assumptions: (a) There is 1.5 percent annual increase in inpatient and outpatient utilization, based on utilization trends at aimag hospitals in the past 3 years. The number of referrals from lower level facilities increases at the same percentage per year. (b) Without the Project, the total number of lab tests and diagnostic tests would have increased at the same percentage as the total utilization number per year. (c) Implementing the Project will see a 50 percent reduction in the number of lab tests and diagnostic tests performed per referral episode after Year 3 of the Project. 12. The net benefit is therefore the cost saving achieved relative to the no intervention scenario. On the basis of these assumptions, about 3000 lab tests and diagnostic tests can be reduced per year due to a more efficient referral process. The total cost saving from reduced unnecessary tests is estimated to be US$15,217 (Table A6.2). Given that this is only partial accounting of all lab and diagnostic tests, the anticipated benefit from the Project could be much higher. Table A6.2: Estimated Benefits in Tuv Aimag Hospital (Currency: US$) Year Number of referrals Number of Lab tests Cost savings in lab tests from lower level and diagnostic tests and diagnostic tests due avoided due to Project to Project3 2014 1,076  0 0  2015 1,092  0 0  2016 1,108  2,964 $4,997  2017 1,125  3,008 $5,072  2018 1,141  3,053 $5,148  Total 5,542  9,025 $15,217  13. In reality, the factors affecting referral systems are broad and complex, extending well beyond the HIS to issues of primary care service quality, provider payment mechanisms, cultural preferences for inpatient care and diagnostic procedures, etc. For instance, providers are known to over-prescribe diagnostic tests because these are reimbursed on a fee-for-service basis on top of the case-based payment for hospital care. The MOH is in the process of reviewing provider payment mechanisms with the support of the World Bank and WHO. If it leads to provider 2 Due to the limited data availability in pilot facilities, the analysis is only based on data collected from Tuv Aimag Hospital. 3 According to the Hospital Services Costing Survey at Aimag and District Health Facilities conducted by WHO, the average cost of one laboratory test was 2363 MNT and the average cost of diagnostic imaging was 4649.5 MNT. 57 payment reforms, including better volume control of procedures and tests, this could enhance this Project’s impact on costs and efficiency. In the absence of provider payment reforms, the Project’s interventions to integrate HIS may not have a substantial impact on the volume of tests and procedures. 14. Cost containment can also be achieved by taking advantages of synergies between current (and future) applications of local HIS and consequent reduction in technical development costs. While the Project does not invest in new HIS, the ability of local HIS to communicate with other systems and harmonize with applications software developed under the Project would most likely reduce their future needs to invest in bilateral mechanisms or duplicated software. Given the increasing number of health facilities that would potentially need exchange data operations, the standardized operation of the HIEP would allow many health facilities to maximize the cost savings in future HIS development efforts by taking advantage of the latest IT technology. 15. Another potential welfare gain from the Project is the potential improvement in accountability and work productivity among the health professionals. In the absence of an integrated health information system, coping with future increases in the demand for health care services may result in significant increases in the administrative burden for health care workers, and greater potential for administrative and medical errors. With the new messaging system, it is anticipated that doctors would have better judgments when treating patients by reducing mistakes due to illegible handwriting or unclear abbreviations on hand-written notes. 16. In addition, the Project could lead to more effective management and control of NCDs by facilitating the real-time exchange of patient information, and providing accurate and regularly updated data to monitor NCDs. Early diagnosis and effective prevention of NCDs can reduce the need for hospitalization and lessen the financial burdens on the poor. However, the current delivery system is fragmented, often resulting in under-diagnosis and delays in treatment. Such delays imply missed opportunities for preventing and treating NCDs more cost-effectively. Rural patients in particular are at greater risk for being diagnosed late and requiring more expensive, acute care for NCD related conditions. This Project can make a significant contribution by improving the availability of reliable and timely health information, one of the foundations of effective chronic disease management and public health action. 17. Moreover, the Project can contribute to greater coordination of care across the different levels of the health system, generating further cost savings in the management of NCDs. Chronically ill patients in the current system suffer from a lack of continuity of care across different providers. HIEP enables physicians to see information of the patients during the referral and post discharge care, avoiding unnecessary admissions and readmissions for most conditions. Compared to other diseases, treatment of NCD conditions usually generate a higher cost in higher level hospitals. In Tuv Aimag Hospital, the average spending on inpatient for leading NCDs is higher than the average inpatient spending, implying that the Project could achieve higher cost savings to the health sector by avoiding unnecessary admissions and readmissions for NCD conditions (Table A6.3). 58 Table A6.3: Unit Cost of Inpatient Admission in Tuv Aimag Hospital Tuv Aimag Hospital Unit cost of inpatient Number of inpatient treatment (US$) admissions All diseases 120 5985 Leading NCDs Pneumonia (J12-J18) 120 562 Ischaemic heart diseases (I20, I23-I25) 137 192 Hypertensive diseases (I10) 151 172 Cerebral infarction (I63) 129 139 Other Cerebrovascular diseases (I64-I69) 131 145 Source: Health reports from Tuv Aimag Hosptial (2013) 18. The new system significantly improves information flows between different levels of facilities. This would enable every provider involved in a patient’s care to have the same accurate and up-to-date information to: assess clinical outcomes and response to treatment; verify health insurance eligibility; check clinical results; review records generated by each encounter with the health system; and be aware of any adverse events etc. This is especially important when patients are seeing multiple specialists, or making transitions between care settings. 19. The HIEP would also contribute to greater interoperability of the health insurance information system used by SSIGO and HIS, potentially strengthening claims and performance review processes and reducing transaction costs for SHI. Without an efficient electronic platform to exchange data, providers need to bring claims or the original patient histories of inpatient and sanatorium care and drug prescriptions for review on the flash disk and paper copy. With linkages to the wider health insurance and finance management system, the integrated health information system enables SSIGO staff to get easy access to patient information and review eligibility of claims, signs of fraudulent behaviors, and appropriateness of provided care. 20. At the policy level, the Project will contribute to enhancing the capacity of health policy development and management. The main problem facing health policymakers is the lack of sufficient and high quality health data to monitor health sector performance, and inform decision makings. Project investment in HDS and data warehouse facilitates the exchange of data across the health sector for clinical care, statistical analysis, FM, epidemiological research, etc. As the NHIC oversees all aspects of e-health and health information in the country, it would significantly improve response time for accessing information, enable comparable analysis of utilization, expenditure and quality statistics among different health facilities, and enhance the potential for evidence-based decision making. Health-related programs would be designed and implemented in a more efficient way through timely collection and analysis of data, effective monitoring and auditing of medical costs and health insurance spending, and effective inspection of system-wide detail on disease profiles and usage patterns. The project will also take advantage of using Business Analytic tools that would be developed under the proposed SMART Project to facilitate the disease surveillance efforts in the country. As part of the Project, the development of citizen services and mobile apps activities would further enhance the health sector capacity to engage with citizens and provide quality citizen services. The capacity 59 building activities via the Training Center will improve the IT technical skills of MOH staff and health workers, and ensure the long-term sustainability of e-health activities. Financial Analysis 21. The total investment of the Project is estimated at US$23.8 million. The financial sustainability of the Project relies on the ability of the government budget to meet the incremental recurrent costs associated with the Project investments after the Project ends and counterpart funding commitments cease. 22. While the Mongolian economy continues to grow rapidly, uncertainty over global economic prospects is starting to exert downward pressure on public spending. GDP grew by more than 12 percent in 2012, and double-digit growth is expected to continue through to 2017, thanks to large copper, gold and other mineral resource Projects. In the past, the economy’s reliance on mineral exports and exposure to commodity price volatility has tended to result in boom-bust growth cycles and a high degree of volatility in public revenues. The continuous accumulation of fiscal deficit in recent months implies risks for the Mongolian economy: the fiscal balance deteriorated significantly in 2012, with the fiscal deficit climbing to 8.4 percent of GDP, a 13-year record high. Expansionary government spending and pro-cyclical fiscal policy are the root causes of this overheating. Government spending in 2011 was almost double that in 2009 in real terms, and is budgeted to rise by a further 32 percent. This pro-cyclical fiscal policy could result in another boom-and-bust cycle. Growth prospects are weak for both Organization for Economic Cooperation and Development countries and leading Asian economies, which could lead to a sharp drop in mineral prices and subsequently, government revenues. This is expected to dampen public spending.   23. Despite the macroeconomic environment, health expenditure projections based on the elasticity of government health spending relative to GDP are moderately good. Total public health spending has increased in recent years. Government health expenditure as a share of GDP increased from 1.9 percent in 2006 to 2.1 percent in 2011. Government health spending is estimated to increase to about 2.9 percent of GDP by 2018, an increase of about 0.8 percent of GDP from 2011 numbers, assuming that the elasticity of government health spending to GDP stays at post-2011 levels (Table A6.4). If trends continue at least in the short- to medium-term, the public spending on health will grow steadily, though not significantly in the next few years. 24. The total counterpart funding during the Project is estimated at US$1.2 million and the government is committed to allocating annual health budget into this counterpart funding starting in 2015. If the counterpart commitment is averaged at US$0.3 million per year during the Project, it only accounts for 0.1 percent of annual government health expenditure (Table A6.4). The prospects of fiscal space for increasing government health spending and financing the costs associated with implementation of the Project are generally good. However, it would require a more prudent fiscal framework to ensure that the pace of expenditure growth is adjusted to government’s capacity to effectively manage the public investment portfolio on health. 60 Table A6.4: Projections of government health spending based on economic growth, 2011-2018 Year 2011 2012 2013 2014 2015 2016 2017 2018 GDP growth (%) 17.5 12.3 11.8 11.7 5.9  3.6  9.6 6.2 Government health spending growth (%) 28.5 19.6 18.8 18.7 9.3  5.7  15.3 10.0 Government health spending   139.1 166.4 197.8 234.7 256.7  271.3  312.7 344.0 (million US$)  Government health spending share of 2.1 2.3 2.4 2.6 2.7  2.7  2.8 2.9 GDP (%)  Counterpart funding   -- -- -- -- 0.3 0.3 0.3 0.3 Counterpart funding share of government health expenditure (%)  -- -- -- -- 0.12 0.11 0.10 0.09 Sources: WB, IMF, and authors’ calculations. 25. Incremental recurrent costs arising from Project investments are the main types of government expenditures that will be incurred after the Project ends. These costs include operational and maintenance costs associated with Project investments, salary budget for the newly appointed staff in NHIC, as well as the hardware and support services provided by the NDC. Most of the operation and maintenance costs for the initial installation of hardware and software will be included in the contracts and covered by the warranty as recurrent costs, although some of these costs may be incurred in Years 4 and 5 of the Project. The annual recurrent costs are estimated at around US$1.1 million after Project completion, and will account for 0.3 percent of the estimated government health expenditure in 2018 (Table A6.5). Table A6.5: Estimated Recurrent Annual Expenditure after 2018 (in Current US$) Annual Recurrent Expenditure Cost (US$) Operational cost 77,400 Maintenance cost 860,000 NHIC staff salary cost 33,600 Contribution of NDC 98,000 Total annual recurrent expenditure 1,069,000 Total as percentage of estimated government health expenditure in 2018 0.31% 26. The capacity to meet these commitments will be a function of the overall government spending envelope. Under the fiscal space projections above, the fiscal impact of the incremental recurrent expenditures and counterpart funding commitments on total government health expenditure will be minor, and therefore financially sustainable. 27. The increase in referrals as a result of improved HIS is likely to increase recurrent costs at higher level facilities. However, as discussed above, there is potential for cost savings at public hospitals through reductions in the number of diagnostics tests performed. This would help ease the budgetary pressure on higher level hospitals and the sector more generally. 61 Annex 7: Additional Sectoral and Institutional Context Mongolia E-Health Project 1. Historically, achievements in the health sector have been good relative to Mongolia’s income level. Compared to other countries at a similar level of development, infant and child mortality are low (26 and 32 per 1,000 live births in 2010), and life expectancy rates are high (71 years for women and 63.7 years for men). Maternal mortality rates are relatively low (45.5 per 100,000 live births in 2010), remarkable for a country in which half the population lives in remote, rural areas. By the early 1990s, 99 percent of women were receiving skilled delivery care at childbirth, and 97-99 percent of women had at least 1 ante-natal care visit during pregnancy. These achievements reflect a history of government commitment to health, effective communicable disease control and an extensive delivery infrastructure to provide health services to the highly dispersed and largely rural population. 2. Health care in Mongolia is financed by the revenue-financed state budget, SHI and private out-of-pocket payments. Total health spending accounted for about 5.1percent of GDP in 2011. Of this, the largest share of financing – 42 percent – was state budget. SHI financing accounted for 15.8 percent, and out-of-pocket payments constituted 40 percent of total health expenditure (Table A7.1). Table A7.1. Key Health Expenditure Data for Mongolia, 2007-2011 Indicators 2007 2008 2009 2010 2011 Total health expenditure as share of GDP 5.3% 5.8% 5.8% 5.5% 5.1% Total health expenditure in PPP terms* 186 225 220 221 244 Financing sources State budget (%) 45.5% 43.9% 40.4% 39.7% 41.5% SHI (%) 10.5% 13.9% 15.5% 17.3% 15.8% Out-of-pocket (%) 41.1% 39.2% 41.0% 40.0% 39.7% *at 1995 prices Source: WHO National Health Account, 2012. 3. Mongolia’s SHI was introduced in 1994 and is administered by the SSIGO under the Ministry of Social Protection and Population Development. Enrollment is compulsory for all citizens including employees, self-employed, children under 16 years old, students, pensioners and other recognized social welfare beneficiaries. The SHI coverage reached 98.6 percent of the total population in 2011 as a result of increased coverage for uninsured groups. Financing for Mongolia’s SHI varies by population groups covered: (a) for salaried workers, the contribution rate is currently set at 4 percent of monthly salary, shared equally between employees and employers; (b) for herdsmen, students and self-employed, flat contribution rates are defined on the basis of minimum wage and contribution levels; and (c) for the remaining population (children under 16 years old, pensioners, and disabled), the contribution is set at MNT 670 (US$0.6) per month and is fully subsidized by the government. The benefit package of the SHI covers nearly all types of inpatient care and a limited range of outpatient services and diagnostic tests. Patients are expected to make co-payments of 15 percent to tertiary-level providers and 10 percent to secondary level providers. 62 4. Public hospitals are in principle funded on a Diagnosis Related Group basis with 22 Diagnostic Related Group classes used by both the government and the SHI. However, in reality, funding for a public hospital is decided using the previous year’s spending adjusted for a certain percentage increase which is then classified among 22 Diagnostic Related Group classes to define the respective contributions of the state budget and health insurance funds. Primary health care providers are funded through a risk-adjusted capitation model. Payments from health insurance funds for inpatient services of private health care providers and sanatoriums are calculated on the basis of the rate defined by the accreditation-level score of the respective provider multiplied by the average case-mix rate applied for public hospitals at a similar level. 5. The health care delivery system consists of three levels: national, aimag (similar to province), and soum (similar to district); the soums are further divided into baghs. In 2008, there were 68 beds per 20,000 population. The tertiary level comprises central hospitals and specialized institutions in Ulaanbaatar as well as regional diagnostic and treatment centers. The secondary level comprises Aimag General Hospitals and District Hospitals. Primary care services are provided by Soum Hospitals in rural areas and practitioners at FGP in the capital and aimag cities. Six of the nine districts in Ulaanbaatar provide primary and secondary health services, and private hospitals, outpatient clinics, traditional medicine hospitals and clinics and laboratories are being established. Table A7.2 summarizes key health services inputs and utilization information by level of care. Table A7.2: Health Service Inputs and Utilization Statistics, 2011 % total Average inpatients Hospital Type of health facility Number Physicians length of referred beds stay from lower level of care Primary health care organizations Family group practices (FGP) 219 N/A 785 Soum, inter-soum and rural 317 3955 849 7.5 hospitals Secondary health care organizations Aimag general hospitals 17 5293 1009 7.7 12.3 District general hospitals 12 873 605 8.2 45.2 Maternity homes in Ulaanbaatar 3 360 105 3.75 Tertiary health care organizations Regional diagnostic and treatment 4 1145 334 7.5 27.6 centers (RDTCs) RDTCs (in Dornod, Uvukhangai, Orkon and Khovd aimags) Clinical hospitals and national 16 3995 1280 9.9 25 specialized centers Source: Health Indicators 2008. MOH, NCHD, Mongolia. N/A: not applicable 63 6. At the cusp of its resource-led transformation into a middle-income country, Mongolia faces a myriad of health system challenges. Adult mortality rates are on the rise, driven by the growth of NCDs. Cardiovascular diseases, diabetes, cancer and injuries account for 6 out of the top 10 causes of Disability Adjusted Life Years, accounting for 43 percent of total morbidity, and 60 percent of mortality at present, and are estimated to rise to 60 percent and 73 percent respectively by 2020 (Figure A7.1). 7. Health insurance coverage is declining, both in terms of enrollment rates and financial protection. This is reflected in large socio-economic differentials in health care use, particularly in the use of secondary and tertiary hospitals. NCDs are a major driver of escalating health spending and financial burden. Cost escalation associated with certain NCDs such as cardiovascular diseases outpaces average health spending growth (World Bank, 2010). Early diagnosis and effective prevention of NCDs can reduce the need for hospitalization and lessen the financial burdens for the poor. However, the current delivery system is fragmented, often resulting in under-diagnosis and delays in treatment. Such delays imply missed opportunities for preventing and treating NCDs more cost-effectively. Rural patients in particular are at greater risk for being diagnosed late and requiring more expensive, acute care for NCD related conditions. Figure A7.1: Leading causes of DALYs and percentage change of DALYs (1990-2010) Source: Institute for Health Metrics and Evaluation. Global Burden of Disease Study 2010. DALY: Disability Adjusted Life Years 8. The GOM’s recent policies and strategies in the health sector reflect the need for a more integrated system of financing and delivery. The strategic priority of both the 2001 State Health Policy (2001-2016) and 2005 Health Sector Strategic Master Plan (2006-2015) is to move towards a more integrated system of health service delivery with a greater reliance on primary 64 care. The Program for Continuous Quality Improvement of Health Care Services Provided to Insured by the Social Insurance Organization (2012-2016), states that the Organization, as the main purchasing agency, needs to strengthen efforts to monitor and improve quality, strengthen accountability, both with citizens and providers. The revised Citizen’s Health Insurance Law, which is under discussion in Parliament, involves pooling all sources of funding under a single purchasing agency. 9. An integrated health information system is central to the proposed reforms to the health financing and delivery system. An integrated health system will require capacity and systems to monitor performance, strengthen referrals and promote greater coordination of care across levels of the health system. Having access to a good quality and integrated information system would significantly enhance the purchasing capacity of the proposed single purchaser. Current Status of e-health Development in Mongolia 10. Mongolia’s E-health Strategy (2010-2014) of 2009 is entirely in line with the broader health policy goal of creating a more integrated system. One of the strategy’s guiding principles is to “harmonize the health systems’ actions” with the objective of “improving the quality and availability of health services”. By putting in place this national strategy, and affirming it via Ministerial order 490 (2009), the GOM created the basis by which the detailed discussions are now being held about how best to implement that policy. 11. The E-health Strategy forms part of the e-Government Strategy adopted in 2005. The GOM recognizes the potential of ICT infrastructure, applications and services to improve the efficiency of public service delivery. Under the national e-Government program, GOM is enhancing the legal environment to develop e-government, improving IT infrastructure, developing the e-content of the government, providing public services to citizens online, and developing human resources. This vision is supported and clearly stated in the national ICT Policy document - a 2021 vision of becoming a knowledge-based economy using ICT to accelerate Mongolia’s development. Mongolia’s ITPTA is responsible for the design and implementation of the government’s ICT policy. The GOM aims to leverage ICT advances to support the creation of an efficient and competitive ICT business environment and to use the technical resources of the National IT Park to support the ITPTA. The World Bank’s proposed SMART Government, which will be implemented in parallel to this Project, will be supporting the implementation of the e-Government strategy. As a part of this strategy the GOM has established the NDC, which is intended to house and manage all of GOM’s data including the datasets of priority line ministries such as MOH. The NDC comprises the centre itself and a disaster recovery site which is consistent with present day thinking concerning the safety and security of government data. 12. The E-health Strategy builds on the significant investments made by the government in expanding fiber-optic technology throughout the country. With 25,909 kilometers of fiber optic backbone and access networks being extended nation-wide, over 200,000 Internet connected points are on the map of Mongolia bringing ICT closer to its people. Internet users have increased from under 200,000 in 2010 to over 657,000 in 2012 reaching the 21.8 percent of Mongolia’s total population. Under the World Bank’s recently closed ICT Infrastructure 65 Development Project, the GOM engaged in sustained efforts to significantly reduce the economic and social isolation of rural populations by improving the availability and quality of ICT infrastructure and services. 13. To date, the implementation of the E-health Strategy has been rapid, although somewhat fragmented. Hospital #1 (Central Hospital) has a computerized HIS, which has consistently been expanded and added to over time. HIS also exist in most other tertiary hospitals, as well as approximately half of the aimag general hospitals. In 2012, the GOM agreed to a US$18.5 million e-health Project by the Government of China, which would finance computers and servers, and develop a new HIS for all public hospitals. There is a centralized health statistics information system (H-Info), which collects morbidity and mortality data, utilization statistics and some quality indicators. It allows for comparison of statistics among facilities, and across aimags and regions. The health information system for SHI is well organized and provides adequate support to the provider review and related FM processes. Although set up to facilitate electronic information exchange between the health insurance agency and providers, it does not do so in practice. In addition, there have been numerous telemedicine projects financed by the Governments of Luxembourg and Belgium, and the ADB over the past decade or so. Table A7.3 provides a summary of development partner efforts in the e-health area. 14. In fact, the fragmentation of the health information system exacerbates already high levels of fragmentation in financing and delivery. Table A7.4 summarizes the key challenges in terms of improving efficiency and quality in service delivery and the information-specific factors underlying those challenges. For instance, the fragmentation of health financing sources (state budget vs. SHI) and consequently, the benefits package means that the SSIGO has limited strategic purchasing capacity. Moreover, fragmentation in the way providers are paid (case- based payment plus fee-for-service, etc.), creates perverse incentives for providers to oversupply services and procedures. In this context, a system that facilitates electronic data exchange between providers’ HIS and SSIGO’s H-Info would improve efficiencies in claims processing and support SSIGO with monitoring use rates and contribute to better integration of health information. In reality, HIS and H-Info cannot “talk” to one another and claims processing is done manually leaving little room for active monitoring and control of costs and utilization. Another example is the ineffective treatment and control of NCDs. Coordination of care across different levels of the system – screening, early diagnosis as well as follow-up care at the primary level, good quality referral care services for acute care at the secondary/tertiary level – is critical for addressing the rapidly rising burden of NCDs. Given the poor quality of primary care and weak referral mechanisms in Mongolia, enabling information exchange between HIS at different levels of the system would greatly improve referrals and follow-up care. In practice, the information for referrals is processed manually leading to delays in referral, duplication of services and little or no follow-up care. 15. A number of facilities in the proposed Project pilot sites currently use a variety of software which has either been in existence and used elsewhere already (such as those supported by development partners) or has been designed in the private sector and sold to hospitals for their individual use. Table A7.5 provides an overview of the utilization of various software at the sites selected for support under this Project. 66 Table A7.3: Summary of Development Partner Efforts Agency Project Amount Period Coverage Counterpart4 In millions ADB Health Sector Development Project-3 MNT 5,325.0 2008-2013 National NHDC & MOH Electronic Database for NCD US$0.0126 2010-2011 National NHDC Stroke and heart attack US$0.05 2010-2013 National MOH Assessment on Civil Register and Vital Statistics US$0.005 2012-2013 National DMEIA/DIME WHO Evaluation of HIS US$0.01 2012 National Department of Policy and Planning Early Warning and Response US$1.0 2006-2012 National NCCD Cardiovascular Diagnostic Information Euro 6.6853 2001- 2016 National DPIC Luxembourg Telemedicine in Maternal and Newborn Health Euro3.3 2011-2016 National DPIC Millennium Apoplexy & heart attack US$1.4 2010-2013 National 3rd General hospital Challenge Account Cancer Diagnostics/ Smart solution/ US$0.2 2010 National Cancer RNC Tele medicine network CHF1.421 2008-2013.6 National Dr6 Erdenetsogt, HS Swiss Unit Straightening National Laboratory Network US$0.246 2011-2013 National DPIC/ National Blood Global Fund Centre Enhance HIS /Health System Strengthening US$0.0939 2010-2013 National MOH, HDC /DOH People’s Republic Hardware and HIS US$18.5 2013-2015 National DMEIA/DIME of China Channel /LMIS/ Jargalsaikhan, Logistic management information system IT officer of 2009 National “ Em impex ”& MOH UNICEF developed this UNICEF project UNICEF did not spend any additional expenses. 4 This reference is to the aspects of the Project which relate to e-health; depending on the nature of the Project there may be other counterparts aside from the one indicated here. 67 Table A7.4: What are the information-specific challenges to improving efficiency and quality in health service delivery? Key challenges Main causes Underlying information-specific causes Sources of health The Health Law defines health services funded through the Since health insurance claims are processed using H-Info financing and the state budget and provided free of charge (primary health care: and state budget expenditures are managed separately, benefits package are soum hospitals and FGP), while the Citizen’s Health Insurance analyzing overall utilization and costs is difficult. fragmented. defines health services funded by SHI, including most referral- level services. The split extends to disease categories and types of costs. The health insurance Health insurance agency can only control the insurance- H-Info is not linked to HIS. Claims and performance agency (SSIGO) has financed elements of health service delivery and costs reviews done manually. Statistically review methods are little or no strategic resulting in little or no control over referral practices and total not used for provider profiling, targeted in-depth reviews, purchasing capacity. volume or services provided at the facility level (procedures, etc. prescriptions, etc.). Service delivery is Over-use of inpatient care services at the secondary and Lack of interoperability between existing HIS: inefficient, driving up tertiary levels, largely due to the weak and ineffective referral ‐ Limits effective communication between hospitals, excess cost growth in system. which delays getting approvals for referrals from the health sector and secondary and tertiary hospitals; bypassing primary care out-of-pocket costs for Little or no coordination of care across different levels: lack of is faster for patients.   patients. effective referrals and post discharge care contributes to costly ‐ Prevents electronic sharing of clinical data between (and avoidable) admissions and re-admissions for most NCD facilities to improve coordination of care for individual conditions patients  ‐ Prevents results of tests/procedures being transferred Duplication of tests/procedures at different levels of health with patients as they move through the system.  care. Provider payment Providers face strong incentives to: H-Info and HIS not linked. Payers (state budget, SHI) have mechanisms not ‐ admit patients for inpatient care as reimbursement rates are no way of reviewing and controlling overall volumes of conducive to higher;   use. controlling costs. ‐ order more diagnostic procedures than necessary because they are reimbursed on a fee-for-service basis on top of the case-based payment for hospitals. Little or no Rising demand puts pressure on secondary and tertiary level Lack of interoperability between existing HIS prevents improvements in providers leading to higher rates of medical error, particularly effective sharing of data on clinical diagnosis and treatment clinical quality of care during referrals. during referrals. Administrative burden of paperwork reduces time spent on clinical care. 68 Table A7.5: Summary of Existing Software Being Used in Proposed Project Sites Existing SW Agency Songil- Tuv Aimag Khovsgul Hospital #1 Hospital #3 khairkhan Aimag district 1 H-Info ADB Statistic based Statistic based Statistic based Statistic based Statistic based 2 Med soft MITPCompany Registration, - - - - outpatient, lab 3 EWAR2.0 CDRCentre Communicable Communicable Communicable - - diseases diseases diseases 4 Flu CDRCentre Flu Flu - - - 5 Tuber’c CDRCentre Tuberculosis Tuberculosis - - - 6 E-Hospital Mon-IT - Registration, Registration, Registration, Registration, Company outpatient outpatient, lab, outpatient outpatient, lab inpatient 7 Doct Order Private - - - - - company 8 Smart solution Cancer centre - - - - - 9 Diagnosis Private - - - - - office company 10 Campus Swiss - Pathology Pathology - - Medicos 11 Acolous Unknown - Accounting - Accounting - /Interactive 12 ZKSoftware Unknown - Registration - - - based on finger checking 13 Cardio.mn Luxemburg cardiology cardiology cardiology - cardiology 69