Mongolia: Third Health Sector Development Project

Sovereign Project | 41119-012 Status: Closed


The impact of the Project is improved health status and quality of life for the population of Mongolia. The outcome of the Project is PHC services that are more effective and improved

financial protection through health insurance.

The Project has four components designed through collaboration and coordination with key stakeholders in the health sector.

1. Strengthened Health Services: (i) sustainable and institutionalized FGPs, (ii) Soum health centers with improved infrastructure, (iii) district and aimag general hospitals supporting FGPs and SHCs

2. Improved Health Care Financing and Health Insurance: (i) health resource allocation and purchasing, (ii) strengthened health insurance to improve financial protection and expand coverage, (iii) improved hospital financial efficiency through governance and incentives.

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Project Name Third Health Sector Development Project
Project Number 41119-012
Country Mongolia
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0086-MON: Third Health Sector Development Project
Asian Development Fund US$ 14.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Health - Health sector development and reform

Gender Equity and Mainstreaming

The impact of the Project is improved health status and quality of life for the population of Mongolia. The outcome of the Project is PHC services that are more effective and improved

financial protection through health insurance.

The Project has four components designed through collaboration and coordination with key stakeholders in the health sector.

1. Strengthened Health Services: (i) sustainable and institutionalized FGPs, (ii) Soum health centers with improved infrastructure, (iii) district and aimag general hospitals supporting FGPs and SHCs

2. Improved Health Care Financing and Health Insurance: (i) health resource allocation and purchasing, (ii) strengthened health insurance to improve financial protection and expand coverage, (iii) improved hospital financial efficiency through governance and incentives.

3. Improved Human Resources Development: (i) improved health HR management and capacity, (ii) incentives and motivation schemes to improve rural health care.

4. Sector capacity development and management: (i) increased capacity of MOH and key agencies to implement the HSMO, (ii) improved governance in the health sector, (iii) private sector development policy and guidelines established, (iv) project management capacity enhanced.

Project Rationale and Linkage to Country/Regional Strategy

The project supports the Mongolia's 2006-2008 Country Strategy and Program pillar of inclusive social development and is included in the ADB's Mongolia Country Strategy Program and Update (2007-2009). Policy reform in Mongolia in expanding and improving PHC, improving financial expenditure for increased system efficiency, and improving human resources (HR) capacity requires continued support and attention to maintain momentum. Long-term support from the Asian Development Bank (ADB) has been successful in maintaining the momentum, despite organizational, staff, and political changes. Health is a focus of ADB assistance to Mongolia, and ADB is the main funding agency in the sector. The hospital-focused and inefficient health system inherited from Soviet times needs to be remodeled.

Despite significant progress, further support is required to build upon and sustain reforms. There is wide disparity in access to health services, quality of services, and health outcomes between urban and rural areas in Mongolia. There is a significant need for further upgrading of infrastructure to improve rural health services, and particularly in aimags which have so far received little or no investment. The Mongolia's Government's Health Sector Master Plan stresses the need to provide essential health services to the people of Mongolia, with emphasis on vulnerable groups such as the poor and remote.

The Project will build on the policy platform established by previous projects and continue the reform agenda in line with the Government's Health Sector Master Plan (HSMP) and in tandem with recently established intersectoral coordinating mechanisms. These new initiatives indicate renewed commitment in Mongolia and greater likelihood of successful project achievements.

Impact Improved health status and quality of life of the Mongolian population
Project Outcome
Description of Outcome PHC services are more effective and financial protection is improved through health insurance
Progress Toward Outcome Revised Citizen s Health Insurance Law is passed by the Parliament on 30 January 2015.
Implementation Progress
Description of Project Outputs

Output 1. Strengthened family group practices (FGPs) as the first level of primary health care (PHC)

Output 2. Selected soum health centers (SHCs) in project aimags with improved clinical competencies, referral systems, infrastructure, and equipment

Output 3. District and aimag general hospitals reliably support family group practices (FGPs) and soum health centers

Output 4. Health resource allocations and purchasing based on best practice and rational methods

Output 5. Strengthened health insurance to improve financial protection and expand coverage and optimize benefit package

Output 6. Improved hospital efficiency through introduction of appropriate health financing management measures and incentives

Output 7. Improved HR management and capacity in the health sector

Output 8. Incentives and motivation schemes to improve rural health care

Output 9. Increased capacity of Ministry of Health, National Center for Health Development (NCHD) and other health agencies to implement the health sector master plan (HSMP)

Output 10. Improved governance in the health sector

Output 11. Policy and guidelines on private sector development and regulation in health established and operational

Output 12. Project management capacity enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)

Output 1.

The project had significant involvement in strengthening FHCs, established as family group practices in 1999-2001 under Health Sector Development Program. The project targeted institutional and financial reforms to consolidate and embed the FHC model. The new Health Law (passed in May 2011) reflected major reforms planned and undertaken under the project and incorporated in Government Resolutions and Ministerial Orders, including the legal status of FHCs (as private entities), definition of FHCs and the care package provided by FHCs, and incentive packages for FHC staff. With the targeted focus on SHCs and FHCs, per capita expenditures on PHC were increased by the government from $11 in 2006 to $22 in 2013, which, after adjustment for inflation, still constituted additional investment.

The project reviewed and developed a number of family doctor support mechanisms including new FHC standards relating to optimal levels of service and recommended procedures and core indicators, around 30, for monitoring and evaluating FHC performance; FHC service packages; and referral arrangements. The project, with approval from MOH, conducted two study tours linked to strengthening primary health care services: to Armenia to review family doctor supervision and quality of care; and to Finland and Estonia to review family doctor service packages, training programs and funding, health sector reform and orientation towards family doctors. The project constructed two new FHCs in aimags and two model FHCs in Ulaanbaatar, designed to pilot new family doctor service models with enhanced physical layouts for better patient access and increased service capacity including laboratory services for routine tests (thus, obviating the need for patients to attend secondary care facilities) and medical equipment, including rehabilitation and diagnostics such as electro cardio graphs. Medical equipment was provided by the project to 61 FHCs and specific laboratory equipment was supplied to the two model centers in Ulaanbaatar.

The project also supported development of undergraduate education for family doctors at the Department of General Practice at the Mongolian National University of Medical Sciences (MNUMS, formerly known as the Health Sciences University of Mongolia) and in-service training for family doctors through the Ulaanbaatar City Health Department. This involved the development of a core curriculum for Family Medicine and a Family Medicine Residency Training Program. An internationally recognized Family Medicine Textbook was translated into Mongolian to serve as the core teaching reference for trainee doctors. The project supported the establishment of a Skills Laboratory at MNUMS, with simulation equipment and tools as well as networked computers with interactive patient diagnostic software, which is now widely used by medical students. In addition, the project established an undergraduate student scholarship program supporting training of health professionals from remote, rural health centers. A total of 44 students were enrolled in the program and 35 students had completed the degree and started working in designated locations at project completion.

To strengthen advocacy and public information about family doctors, the project focused on training local government agency staff that interacts with the family doctors on advocacy and information about the FHC model. The project developed a detailed training program planned to be conducted by a non-government organization for around 250 local government staff, supervising 100,000 households and 6500 health workers.

Output 2.

In strengthening SHCs, the project constructed 10 new SHCs, renovated another 10 and constructed 37 wells for SHCs in project aimags. The project also provided medical, diagnostic, laboratory and waste management equipment for 90 SHCs and project aimag/district general hospitals received laboratory, medical, diagnostic and waste management equipment. Training equipment and materials for renovated Training Centers to support FHC and SHC continuing medical education, and in-service training and video conferencing and networking equipment and software, along with training for tele-diagnosis, were provided to district hospitals and AGHs by the project, significantly contributing to improved electronic communications. Video conferencing for continuing medical education, communication, remote patient consultations and transfer of digital diagnostic images is now well established and in daily use. To ensure ongoing functioning of equipment and upkeep of facilities, a maintenance unit with 2-3 engineering staff was established at the aimag and district general hospitals and maintenance allowance was incorporated in the aimag and district health budgets.

The project also made recommendations to MOH on realigning SHCs towards PHC with more emphasis on outreach, home services and prevention to improve rural health service delivery. A National Strategic Plan for Reforming Soum Hospitals into SHCs was developed, based on project recommendations, and approved by MOH. The plan addressed the new profile and roles of SHCs, package of services, standards for SHC facilities and recommended medical equipment and medicines, staffing levels and job descriptions.

Output 3.

The project developed a continuing medical education program for soum and FHC doctors, nurses and feldshers based on an assessment of training needs, and provided clinical training through 13 modules with specialist doctors trained to deliver the training. Modules for doctors covered palliative care; hospital care for children; emergency care; ultrasound; cardiology in PHC; and traditional medicine. For nurses, midwives and bag feldshers the modules covered public and community participation; physiotherapy; health statistics; home nursing; re-training for feldshers; re-training for midwives; and basic laboratory tests. Training materials included CDs, training guidelines for trainers and resource materials: 800 units in each of the 13 subjects were distributed. A total of 219 health professionals from aimag and district general hospitals were trained as trainers and they conducted continuing medical education clinical training for 2757 health personnel during the project, including 363 feldshers from 305 bags in 5 project aimags. These trainers are still in place and able to conduct further training as part of the institutionalization of continuing education in aimags and districts promoted by the project. A Clinical Rotation system was established whereby SHC and FHC doctors and nurses undertook in-service training in aimag/district general hospitals and 1203 staff underwent this training. An added result was that staff trained were able to extend skills learned afterwards to their colleagues in the workplace. A total of 5542 health professionals, including 76% female, were trained under the clinical training programs. Project aimags have institutionalized the clinical rotation training for soum health staff by providing financial and non-financial incentives for trainers and trainees from the local budget. Supplementary Appendix 2 details training conducted under the project. Overall, the FHCs and SHCs professionals gained increased clinical competencies in at least 5-6 areas for each professional category.

The project developed 6 packages of Clinical Practice Guidelines, covering over 70% of common conditions presenting at the PHC level along with referral criteria (clinical areas are: chest pain, gastrointestinal conditions, urinary tract conditions, neurological conditions, ophthalmological conditions and adolescent health conditions). 2500 copies were distributed to all FHCs, SHCs and AGHs and trainings were conducted in 2012 on clinical application and use in project aimags and districts. Participants included one doctor from each SHC and FHC as well as aimag general hospital specialists. A total of 222 doctors undertook guidelines training during the project, and guidelines training, continuing medical education and Clinical Rotations are still being conducted and supported in project areas.

By 2010, the project had fully renovated infrastructure in Arkhangai, Gobi-Altai, Sukhbaatar aimags' general hospitals. At the Dundgovi aimag general hospital, the infectious disease ward was renovated and a new outpatient department built in 2011.

Output 4.

The project developed recommendations, accepted by the Government, on a new Health Financing Model for Mongolia and conducted seminars and presentations to senior staff, achieving a relatively high consensus among the MOH, Ministry of Finance (MOF) and the Ministry of Population Development and Social Protection (MPDSP) on the status, organizational structure, responsibilities, management systems and processes required to establish and operate a single purchaser system and to pool funds from the Government's budget and health insurance. Many of the principles on single purchasing and pooling were adopted in the government action plan 2012-2016 and the health financing strategy 2010-2015 approved by the Cabinet. The draft Health Insurance Law, prepared with the support of the project, approved by the Cabinet and submitted to the Parliament in 2010, has also accepted the single purchaser concept by transforming the health insurance agency into a single purchaser. MOH, MOF and MPDSP agreed to implement single purchasing incrementally, thus obviating the need for piloting the single purchaser model as planned under the project. As the draft Health Insurance Law was undergoing lengthily discussions at the Parliament until end of 2014, the project also prepared a Hospital Efficiency Pilot Study to test implementation of financial reforms, including contracting, management performance agreements, human resource implications and incentive payments. This study was due to commence in late 2013 but was postponed due to uncertainties related to the approval of the health insurance law.

Output 5.

To assist in expanding health insurance coverage (to attain 85% coverage by 2013), the project conducted a study of the uninsured population to investigate the extent of financial barriers and implications of out-of-pocket payments on the uninsured and the poor and disadvantaged. The study included recommendations on approaches towards out-of-pocket payments, co-payments and payment methods. It proposed key principles and procedures to determine the benefits package, including out-of-pocket payments and provider payments which are now included in the revised Health Insurance Law. The project also developed a range of policy papers and options on hospital efficiency, removal of financial barriers to health care and increasing private health insurance. An awareness campaign for policy makers and health workers on universal coverage and health insurance benefits packages was planned but ultimately postponed until after the passage of the Health Insurance Law.

Output 6.

Project research and documents addressed reform of the hospital system towards autonomous boards and management, budget allocation systems, performance benchmarks, incentives, hospital efficiency measures and performance based salary schemes as part of an overall financial strategic review. However, despite achieving high levels of agreement and consensus of senior MOH and MOF staff on new financing approaches, many of the project's recommendations were not able to be implemented due to firstly, widespread staff turnovers following the 2012 election which interrupted the continuity of the internal MOH processes and secondly, delays in passing necessary legislation. The revised Budget Law of 2012 and the revised Health Insurance Law of 2015 do however contain significant elements of the project's financial reform package and will serve as a platform for further strengthening the health financial system.

Output 7.

A major project task was the development of a Sectorwide Workforce Plan, however, MOH had already drafted a Health Sector Human Resources Development Policy 2010-2014 and Plan for Medical/Health Specialists until 2020, and the project focused on reviewing the policies and made recommendations including using comparative staffing benchmarks and developing a policy base for planning future HR supply. The project adapted workforce models and proposed these models to the MOH to guide determination of staff numbers, competencies, and organizational structures and career development. At the request of MOH, the project supported additional HR activities, which were compatible with project objectives, including; developing bachelor level health educational standards; revising the medical professionals' licensing test content and format; developing and publicizing health professionals' job descriptions; and revising the health professionals' career development document.

In HR management development, the project conducted a training of trainers (ToT) program for 25 trainers who in turn trained 193 HR and hospitals managers to help institutionalize HR management capacity. Project technical assistance revised and developed additional materials and references for training in HR management and organizational development at the aimag level, including a Training Handbook on HR Management, printed 300 copies and distributed to all physicians and facilities in the pilot aimags and districts.

Output 8.

The project provided technical support to the secretariat of the High Level HR Coordinating Committee, established in 2008 under the Prime Minister. The Committee was responsible for strategic human resource development, and the project assisted in identifying strategic plans and priorities including increased training places and numbers of key personnel such as nurses and feldshers to enable MOH to realign nurse-doctor ratios and enhance career development opportunities to achieve a better balanced workforce. The project also supported the NCHD in the establishment of a Health Professionals' Postgraduate Training Database Information System for monitoring continuing medical education and in-service training for medical and nursing staff.

The project developed incentives to improve rural health care, based on research identifying the main drivers that influenced the recruitment and retention of health workers in rural areas, including salary levels and social welfare elements. The project developed a policy document on training incentives and subsidies for rural and remote area medical practitioners and medical students to increase rural health staff numbers and many of the underlying concepts, such as remuneration levels, specialist distributions and staff competencies were reflected in the revised Health Law, 2011 and in Ministerial Orders endorsed by MOH.

Output 9.

The project targeted improving capacity in NCHD through in-service management training using a competency based training approach and ToT for 15 trainers resulting in health management training at the major hospitals in Ulaanbaatar as well as MOH staff. The program and materials developed by the project are still available and ready for roll out across the health sector.

The project also established a sub-project in NCHD aimed at improving capacity for centre staff in policy, planning and health expenditures analysis. This resulted in the establishment of a new division entitled the Health Technology Assessment and Economic Analysis Division in 2011, which is operating effectively. The project also assisted in strengthening capacity for preparing National Health Accounts and organised international and local experts to develop a health accounts analysis structure for national health expenditures from 2002-2014. This involved extensive retrospective analysis and was completed in late 2014.

As part of the capacity building sub-project, the project assisted the Health Technology Assessment and Economic Analysis Division of NCHD in developing a cost study for primary health services using an activity based costing method. The newly developed and approved health service package for FHC and SHC in 2013 was used as the basis for the cost study. The study was completed in 2014 and provided reliable data and justification for increasing primary health care expenditure. Based on experience gained, the MOH has also initiated a cost study for the secondary and tertiary level hospital services that are financed from the state budget. These studies are contributing significantly to the implementation of new financial strategies, particularly in improving payment methods, and efficiency and accountability of the state budget expenditure.

The project supported improvement to the electronic health information system H Info, with assistance in software development and linkages to all FHCs, SHCs and health facilities, allowing weekly transmission of information on utilisation, gender disaggregated patient data, diagnoses and treatments. H-Info improvement, PHC costing studies and National Health Accounts analysis were additional project activities and were successfully undertaken.

Output 10.

In governance, the project promoted and implemented the HSMP package of services for FHCs and SHCs and reviewed the potential for patient complaints, including supporting a hospital autonomy study tour to Hong Kong, which provided insights into patients' rights, ethics and governance boards. The project developed a concept paper on hospital governance including the establishment and functioning of hospital boards, accepted by MOH in 2011. The hospital boards' concept is considered in the Health Law (2011) and, while not as yet in operation, there is a strong basis for implementation in future.

Output 11.

The project also contributed to improving private health sector regulation, licensing arrangements, certificate of needs processes and public-private cooperation through recommendations in discussion papers and reports, subsequently endorsed in Ministerial Orders.

Geographical Location Components 1 will cover Arkhangai, Dundogov, Gobi Altai, Sukhbaatar, and Tuv aimags, Chingeltei and Songinokhairkan districts. Components 2, 3, and 4 will focus on policy change and reform of the health sector system nationwide.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

An initial environmental examination (IEE) was carried out in the five project aimags in accordance with Government Laws and Regulations on the environment and ADB's Environment Policy (2002) and Environmental Assessment Guidelines. 11 Extensive public consultations, including surveys, meetings with stakeholders, and focus group discussions, were undertaken during preparation of the IEE. The project IEE was reviewed by the aimag's environment department in accordance with the law on Environment Impact Assessment.

Environmental mitigation measures indicated in Civil works contracts with contractors. The local civil work coordinators monitor the contract compliance on environment mitigation measures and annually report to the PIU.

The Project will not adversely affect natural resources, the ecology, or cultural and/or historical sites. A limited number of specific environmental and social impacts may result from the project implementation, but these can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, and design criteria. The Project will enhance environmental features of the hospitals, provide safe water supply, and ensure appropriate medical waste management. Newly constructed and upgraded SHC and AGH buildings will enhance energy efficiency and building standards. The Project will have positive social impacts, including to improve rural health care services and the quality of life for people in project areas. Civil works in the Project will ensure that no additional environmental problems are created by specifying appropriate design features, heating and ventilation systems, and wastewater collection systems.

Involuntary Resettlement Construction of soum health centers and family group practice centers will take place on existing government lands. No resettlement activities were carried out during the project implementation.
Indigenous Peoples Only one of the proposed project areas has a significant presence of an ethnic group (the Dariganga in Sukhbaatar). As the cultural distinction, health, and socioeconomic status of this group are similar to those of other Mongolians, an indigenous peoples development plan is not required.
Stakeholder Communication, Participation, and Consultation
During Project Design

Two planning workshops co-organized by MOH and ADB with the participation of major Mongolian stakeholders and international partners will guarantee broad participation in defining the impact, outcome, outputs, key activities and milestones, targets, assumptions and risks of future project.

The Project was designed through extensive consultation with stakeholders from public, private, and nongovernmental sectors at the central and local levels.

During Project Implementation

The Project will implement participatory mechanisms at PHC (e.g., community consultation in management of health facilities and services, social workers linking disadvantaged groups to health personnel) and hospital levels (e.g., establishment of hospital boards, development of complaints and communication processes between health facilities and the population) to promote greater community involvement in overseeing health facilities and improve transparency of the sector.

Several study tours were organized with involving key stakeholders from Parliament, Cabinet secretariat, President Office, MOH, MOF, MPDSP, NGOs, UB City Health Department, HSUM and project aimag and district health departments and general hospitals. These are: (i) to Estonia to learn reforms in transitional post soviet countries' experience , (ii) Finland on organization of PHC services, (iii) Thailand on universal health coverage, (iv) Armenia on PHC developments, (v) UK on health financing and PHC, (vi) Hong Kong on hospital autonomy and board functioning.

Business Opportunities
Consulting Services The project will require a total of 57 person-months of international and 312 person-months of national consulting services. The international and national consultants will have expertise in (i) FGP services, (ii) public health, (iii) civil works, (iv) medical equipment, (v) ICT network development, (vi) health care financing and health insurance, (vii) HR management and development, (viii) health planning, (ix) private sector development, and (xi) monitoring and evaluation.
Procurement Procurement of goods and works financed under the grant will be undertaken in accordance with ADB's Procurement Guidelines. International competitive bidding (ICB) will be applied to supply contracts estimated to cost $500,000 or more. Supply contracts with a value less than $500,000 will follow national competitive bidding (NCB), and those less than $500,000 will follow shopping proceduress. ICB will be used for civil works contracts valued at $1 million or more. Civil works contracts valued less than $1 million will be procured using NCB procedures.
Responsible ADB Officer Altantuya Jigjidsuren
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission
Executing Agencies
Ministry of Health_and Sports
Dr. J. Tsolmon
Ministry of Health of Mongolia, 14210 Government Building-8, Olympic Street 2, Sukhbaatar District, Ulaanbaatar, Mongolia
Concept Clearance 02 Mar 2011
Fact Finding 09 May 2007 to 17 May 2007
MRM 22 Jun 2007
Approval 19 Nov 2007
Last Review Mission -
PDS Creation Date 23 May 2007
Last PDS Update 24 Mar 2015

Grant 0086-MON

Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Nov 2007 13 Dec 2007 27 Mar 2008 31 Dec 2013 30 Jun 2014 12 May 2015
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 17.60 Cumulative Contract Awards
ADB 14.00 19 Nov 2007 12.76 0.00 91%
Counterpart 3.60 Cumulative Disbursements
Cofinancing 0.00 19 Nov 2007 12.76 0.00 91%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory - - - Satisfactory

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Third Health Sector Development Project Environmental Assessment and Measures Jun 2007

Evaluation Documents

See also: Independent Evaluation

No documents found.

Related Publications

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