GPOBA Commitment Paper: Queen of Sheba Safe Motherhood Program Yemen June 20, 2007
YEMEN
GPOBA COMMITMENT DOCUMENT
Project Name:
Queen of Sheba Safe Motherhood Program (P104946) - برنامج ملكة سبأ للأمومة الآمنة
Overview:
The Queen of Sheba Safe Motherhood Program is a four year community based program that comprises the provision of a defined ‘Mother-Baby package’ of essential quality services as defined by WHO, such as antenatal care, birth attendance by skilled birth attendants, postnatal care, complicated care services and family planning, to eligible women of reproductive age (15-49) in Sana’a, Yemen. The package price will be US$150. The costs of treatment and medication are included in the package price including an assumed estimated 15% of patients requiring caesarian sections/emergency care. While the package price is at a discount to current quoted prices, it is deemed fair given that the bulk of services will be delivered at community level and not at hospital level. A minimal user fee of US$15 will be required from targeted women, which will be paid in month 8 or 9 of the pregnancy, prior to delivery. The US$15 was determined based on the current practice of Yemeni families giving US$10-US$20 on the day of delivery to whoever helped the pregnant woman deliver. The project does not use a voucher scheme as initially designed – instead eye scanning/finger prints will be used as the identification and tracking mechanism for eligible women in the program.
Description:
All services will be provided by the private sector: (1) Two private Yemeni hospitals, the Saudi German Hospital (SGH) and University of Science and Technology (USTH) Hospitals have been identified as appropriate clinical service providers for the first phase. Primary care services will be provided to targeted women by midwives at satellite clinics to be established in the districts and owned and managed by the hospitals. Patients requiring emergency or complicated care will be referred to the two private hospitals; (2) SOUL, a reputable local Yemeni NGO, will serve as project implementation and promotion unit responsible for program promotion, awareness campaigns and targeting of eligible pregnant women; and (3) A fiduciary agent will be the recipient of the GPOBA grant and manage the fund flow in the project. The private providers will bear the operational risks of the program as they will be reimbursed retroactively post service delivery and performance target verification by an independent verification expert (IVE). Please see diagram below:
Once a woman is identified as eligible to the program, her digital eye/finger print will be recorded in a database managed by SOUL and shared with service providers at the satellite clinics and main hospitals. For each visit/service sought by the registered women, her eye/finger print will be taken each time and will need to match with recorded data in order for the service to be provided. At the end of each quarter, service providers will invoice the fiduciary agent for the services provided. The fiduciary agent will first check invoices against the defined package of services and agreed prices and then disburse the money to the service providers. Every other quarter, an independent verification expert contracted by the fiduciary agent will conduct a quality performance review for the previous 6 month period. Depending on achievement of certain performance indicators (as outlined in Section B.2), payment will be triggered on a sliding scale basis.
Program Sustainability:
The program will be launched as an initial model to have a demonstration effect in year 1 and appropriately modified and expanded over years 2-4. It is anticipated that successful implementation of the first phase may attract local private large corporate companies e.g. oil and industrial groupings to participate in the program. Specifically, it could provide a good demonstration of how private businesses in Yemen could make investments that are socially responsible and contribute to the health of poorer communities. A successful first phase will also provide lessons for scale-up and replication.
At a later stage, the program may also serve as a model that may be adopted by the Government of Yemen as well as attract other bilateral/multilateral donors and healthcare providers to ensure sustainability.
Further, as currently designed, the satellite clinics will be operated as profit centers. The providers have agreed to deposit any profits (if any) in excess of 5% margin into an escrow account/fund to be used to fund any legitimate unexpected cost-overruns in the short-run e.g. larger than estimated percentage of women requiring more expensive complicated and tertiary care. In the long run, the main purpose of these funds would be to serve as a ‘sustainability fund’ that could attract co-financing. While the program was designed in a way that the satellite clinics will be providing services at cost, these clinics may generate additional revenues for paying patients outside the scheme and not eligible to benefit from GOPBA subsidy.
Sponsor: The Saudi German Yemen Hospital initiated this program based on its interest in providing antenatal and maternal care services to women from poorer and underserved communities in Sana’a. The Saudi German Hospitals Group, an IFC client, began its operations in 1998 and is one of the largest private for profit healthcare providers in the Middle East. It currently operates five hospitals in the MENA region and is about to establish a new hospital in Cairo, Egypt. Most recently, in June 2006, the Group opened a 300-bed multi-specialty hospital in Sana’a, Yemen at a total project cost of US$100 million, US$ 20 million of which is being funded by IFC in the form of a loan.
Total project costs: US$7,574,100
Total GPOBA funding requested: US$6,682,100
a) Subsidy funding (W3) = US$6,193,600 as follows:
o Funding of services: US$5,508,000
o Funding of capital costs[1]: US$ 140,000
o Program administrative costs: US$ 351,600
o Educational and awareness campaigns’ costs: US$ 194,000
b) Funding for program preparation start-up cost (W3): US$ 38,500
c) Independent Verification Expert: US$ 90,000
d) Fiduciary Agent Fee: US$ 80,000
e) Auditing: US$ 60,000
f) GPOBA Supervision: US$ 220,000
GPOBA subsidy as % of Total Costs: 88%
GPOBA Window 3 Funding: 100% IFC
Additional funding sources:
· Patient user fees: US$15 per package of services amounting to US$612,000
· Private Financing Leveraged: 50% of capital cost of establishing satellite clinics to be funded by private providers for year 1 and year 2. In year 3 & 4, service providers will fund 100% of capital costs needed. Service providers’ contribution is estimated at US$280,000.
Outputs: The expected estimated output will be to achieve approximately 40,800 safe child birth deliveries attended by skilled birth attendants amongst the target population over the project period. Defined package of services delivered to patients at district satellite clinics and referred to private hospitals (as necessary for complicated care), measured through specific performance indicators and volume targets and monitored by an independent verification expert.
IRR and ERR: A preliminary analysis was conducted based on secondary research and the Program’s cost assumptions - it was deemed that a quantitative economic and financial analysis of the Program would not provide useful insights into the program, primarily as there are minimal revenue streams (minimal user fees of US$15 per patient) as compared to the per patient investment of US$150 made by GPOBA. Further, in the absence of detailed pricing and household spending data, quantifying the expected economic benefits and conducting a robust economic analysis was deemed not feasible and inappropriate. However, an IRR was calculated for the satellite clinics and estimated to be 11%.
Targeting the poor and expected beneficiaries: The program will target women (first time mothers and those with up to two children) of reproductive age (15-49) in two underserved districts in Sana’a in first year (household income less than US$2/day), based on certain defined eligibility criteria.
GPOBA subsidy “efficiency”/ Value for money: subsidy per capita: GPOBA provides a US$135 subsidy per safe motherhood package, or US$158.38 (including implementation costs) per safe motherhood package.
Grant recipient: Fiduciary agent, to be procured through competitive bidding post commitment
Financial Management: Financial Management Annex to be finalized the week of June 4th, 2007. GPOBA subsidies will be disbursed to the fiduciary agent; Final financial management clearance will be obtained once fiduciary agent has been selected through the competitive bidding process.
Disbursement: Three types of disbursements will take place during the life of the program (please refer to Annex 3):
- Program preparation/design and start up costs: US$38,500 will be disbursed to SOUL upon GPOBA grant agreement being signed. GPOBA (W3) will be funding these design / start up costs.
- Capital costs of satellite clinics: The total capital cost of establishing 4 satellite clinics in year 1 is estimated at US$140,000. This cost will be split on 50:50 basis between GPOBA and the service providers. US$35,000, which represents 50% of GPOBA share of the capital costs, will be paid to service providers after commissioning of the said clinics. The remaining 50% of GPOBA share i.e. US$35,000 will be paid after the first 3 months of operations and subject to a satisfactory quality performance report by the Independent Verification Expert. The same will apply in Year 2.
- Invoiced Services: Starting from the first quarter of operations, GPOBA, through fiduciary agent, will make performance payments to (1) service providers based on invoices of service provided; and to (2) SOUL based on cost recovery of fixed costs and agreed costs for the promotional/education & awareness campaign activities. Every other quarter, an independent verification expert contracted by the fiduciary agent will conduct a quality performance review for the previous 6 month period which will serve as the basis for the payment based on a sliding scale (as indicated in Section B.2). The performance indicators will be appropriately modified to reflect the expected clinical services to be provided in the preceding 6 month period.
Procurement: Procurement clearance received. The selection of the two service providers (SGH and USTH) and the NGO (SOUL) as implementation partners has been approved. Competitive tendering for fiduciary agent, independent verification expert and auditor post commitment approval.
Environmental clearance: The draft environment and social assessment is under discussion with the relevant specialists and pending additional information from the local partners. Clearance is expected in the week commencing June 4, 2007. The project does not trigger any social safeguards and will be classified as Category B.
Government endorsement: Pending from Republic of Yemen, Ministry of Public Health and Population expected the week of June 4, 2007.
Exchange rate: ~ 200 Yemeni Riyal per USD
Summary Response to comments of Panel of Experts at Eligibility/Concept Stage:
- Voucher scheme: The merits of a voucher scheme were considered and rejected as adding an unnecessary level of complexity and costs to the overall project.
- Package pricing: A package price of US$150 was negotiated and agreed with the service providers. The costs of treatment and medication are included in the package price including an assumed estimated 15% of patients requiring caesarian sections/emergency care. This price was also compared to local and international peer pricing. While the package price agreed by the two providers is within range of pricing of other private Yemeni providers, the quality (services, staff, facilities, equipment) and capacity of the two providers’ current private hospitals far exceed that of the other local Yemeni private providers (see Table 1). Internationally, the package pricing was also comparable e.g. costs of similar quality services by similar quality providers in India range from US$ 350-1500.
- Economic and Financial Analysis:
Cost-effectiveness of maternal interventions:
Improvements in the quality of prenatal and delivery care are well documented as being cost-effective interventions. Expanding coverage of these services is also of comparable cost-effectiveness (See section B4).
Economic and Financial Analysis of Program:
A preliminary analysis was conducted based on secondary research and the Program’s cost assumptions - it was deemed that a quantitative economic and financial analysis of the Program would not provide useful insights into the program, primarily as there are minimal revenue streams (minimal user fees of US$15 per patient) as compared to the per patient investment of US$150 made by GPOBA. Further, in the absence of detailed pricing and household spending data, quantifying the expected economic benefits and conducting a robust economic analysis was deemed not feasible and inappropriate.
However, it is noted that the package price agreed upon with the service providers is reasonable based on the comprehensiveness of the services to be provided in the Program and the high quality as compared to existing services and pricing thereof (see Table 1).
4. Scaling Up: A successful first phase will provide lessons for scale-up and replication of the program. It is expected that the program will first be scaled up within districts in Sana’a during early years and depending on progress, outcomes achieved and lessons learned, consideration given to scaling up to other surrounding governorates in Yemen.
Abbreviations:
DALY / Disability-Adjusted Life YearFA / Fiduciary Agent
GNI / Gross National Income
GPOBA / Global Partnership on Output Based Aid
IVE / Independent Verification Expert
NGO / Non-Governmental organization
SGH / Saudi German Yemen Hospital
UNDP / United Nations Development Program
USTH / University of Science and Technology Hospital
Table of Contents
Abbreviations: 7
Table of Contents 8
A. STRATEGIC CONTEXT AND RATIONALE 9
A.1. Country and Sector Issues 9
A.2. Rationale for GPOBA involvement 10
A.3. Higher level objectives to which the project contributes 10
B. PROJECT DESCRIPTION 11
B.1. Project and Services Overview 11
B.2. Project development objectives and key performance indicators 13
B.3. Project Cost and Financing Plan 15
B.4. Economic and financial analysis 16
B.5. Lessons Learned 17
B.6. Alternatives considered and rejected 18
C. IMPLEMENTATION 18
C.1. Milestones for project implementation 18
C.2. Local Partners and implementation arrangements 18
C.3. Reporting and Monitoring and Evaluation of outcomes 20
C.4. Sustainability 21
C.5. Critical risks 21
Annex 1. Project costs & schedule 23
Annex 2. Financial management 24