Mongolia : Improving Access to Health Services for Disadvantaged Groups Investment Program

Sovereign Project | 49173-003

The investment program will reinforce past and ongoing sector reforms by expanding and improving access to quality primary and secondary health services in disadvantaged areas of Ulaanbaatar ger [traditional tent] areas, in Khovd and Uvs aimags (provinces), and selected soums (aimag subdistricts). It will also improve the health financing systems and reduce out-of-pocket health care expenses nationwide.

Project Name Improving Access to Health Services for Disadvantaged Groups Investment Program
Project Number 49173-003
Country / Economy Mongolia
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0111-MON: Improving Access to Health Services for Disadvantaged Groups Investment Program
Japan Fund for the Joint Crediting Mechanism US$ 3.48 million
MFF Facility Concept 0111-MON: Improving Access to Health Services for Disadvantaged Groups Investment Program
Ordinary capital resources US$ 99.34 million
Concessional ordinary capital resources lending US$ 59.00 million
Operational Priorities OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
OP4: Making cities more livable
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Health / Health care finance - Health insurance and subsidized health programs - Health sector development and reform - Health system development

Gender Gender equity theme
Description The investment program will reinforce past and ongoing sector reforms by expanding and improving access to quality primary and secondary health services in disadvantaged areas of Ulaanbaatar ger [traditional tent] areas, in Khovd and Uvs aimags (provinces), and selected soums (aimag subdistricts). It will also improve the health financing systems and reduce out-of-pocket health care expenses nationwide.
Project Rationale and Linkage to Country/Regional Strategy

Despite successful health reforms over the past 20 years, Mongolians continue to experience inadequate and inequitable access to quality health services, especially among disadvantaged groups, mainly due to high out-of-pocket expenditures, which represents 42% out of the total health expenditure. The health sector''s total expenditure is 3.4% of gross domestic product, below the World Health Organization's target of 5%. Major risk factors associated with noncommunicable diseases (tobacco and alcohol consumption, obesity, and lack of physical exercisethe major cause of mortality in Mongolia) are above targets. Although Mongolia had achieved its Millennium Development Goal (MDG) targets for infant and under-5 years old mortality, and maternal mortality, disparities still exist which are directly linked to poverty, age of the mother, educational level, and location. Child malnutrition is 1.7 times higher in rural areas, and proportion of underweight children in poor households is 3.9 times higher. Significant regional variations are recorded in maternal mortality due to pregnancy complications (1.82.1 times higher in rural areas than the national average), and stillbirths (1.16.1 times).

Shortage and deficient quality of primary health care. Rapid influx of migrants to Ulaanbaatar is overwhelming available health infrastructure and the government's capacity to provide health services. The situation is worsened due to deficient laboratory services, minimal outreach activities, poor maintenance, weak human resources capacity, and unregulated private sector. There are 35 family health clinics (FHCs) lacking in Ulaanbaatar alone. A recent survey covering ger areas of Ulaanbaatar shows that FHCs substantially underperform in terms of service readiness. Primary health care (PHC) in rural areas is facing similar challenges as to urban areas, especially scarce financing and improper maintenance. Integrated models of care, where services are coordinated across the primary and secondary health care levels, have not been introduced. The emergency care service in Ulaanbaatar is underperforming causing increased waiting times, incorrect treatments due to missing equipment, and a compromised ambulance fleet with safety concerns.

Need for improving secondary health services in Khovd and Ulaanbaatar. The district hospitals in Khovd and Ulaanbaatar are inadequate to meet service delivery with national standards. Most district hospitals were not designed as hospitals, therefore, provide a narrow range of services (e.g., absence of surgical capacity and maternity services). They are often poorly maintained, with outdated equipment and under capacitated staff. Few private hospitals are operational and not affordable for most of the population. Integrated public and private hospital planning is absent. Residents of Khovd aimag, Ulaanbaatar ger areas, and other nearby aimags suffer from high-priced and deteriorating primary and secondary health care services. These locations are not covered under any ongoing or planned national program for PHC.

Inefficient health financing system. Mongolia's input-based health financing model is outdated, inefficient, and not sustainable to meet the medium- and long-term needs of the sector. It is not in line with evidence-based good practices on health financing. The current state funding model reflects negatively on hospital service quality. Moving away from input-based financing (budget lines) towards more efficient output-based financing (purchasing of services) is constrained by the health insurance organization (HIO) capacity to properly plan, cost, and negotiate to purchase services.

Road map. The State Policy on Health, 2017-2026 and Mongolia's Sustainable Development Vision 2030 govern the sector road map. The key sector targets by 2026 are to (i) utilize at least 5% of gross domestic product and 12% of government spending on health with an increasing proportion going to PHC; (ii) limit out-of-pocket expenditures to 25% of total health spending; (iii) maintain universal health coverage; (iv) further reduce infant, child, and maternal mortality from 2015 levels; (v) reduce alcohol and tobacco consumption; (vi) increase the number of facilities that have adequate equipment maintenance from 10% to 80%; (vii) establish an integrated digital health system; (viii) shift to an output-based financing system of hospitals; (ix) integrate public and private health services planning and delivery through publicprivate partnership (PPP) and nongovernmental organizations; (x) strengthen the technical capacity of relevant institutions; (xi) promote good governance; (xii) improve the legal and regulatory framework to provide health care in an equitable and inclusive manner; and (xiii) introduce evidence-based modern diagnostics and treatment techniques. Appendix 2, Table A2.1 details the alignment of the sector road map and the proposed investment program.

Policy framework. The State Policy on Health, 2017-2026, is the overarching policy framework for the sector. It aims to increase average life expectancy of Mongolians by improving quality and inclusiveness of health care services through universal health coverage. The Health Law regulates the range and quality of services in the health sector and defines financing strategies, including users' financial contributions. The Health Insurance Law defines the scope of compulsory insurance and regulates the roles between the key actors). It also determines the size of health insurance benefits, in which disadvantaged groups can enroll free-of-charge. There is a relatively well-developed and regulated framework for PPPs, however, with few results and traction in the health sector. The Budget Law regulates public health services at the local government level, the Public Procurement Law guides all procurement in the sector, and the Development Policy and Planning Law supports multistakeholder participation for health concerns in policy making. This broad policy framework provides a solid foundation for the health sector, however, it will require adjustments as new challenges arise (e.g., aging population) and policy priority changes (e.g., private sector involvement in health insurance).

Strategic context. Since 1997, the Asian Development Bank (ADB) has successfully supported policy reforms linked to global health commitments such as universal health coverage, MDG's and sustainable development goals. Mongolia almost reached universal health coverage in 2017 and realized significant increase in financing for PHC (24% of government spending in 2017), which was nonexistent prior to ADB engagement. All previous health investments supported by ADB were rated successful and ongoing projects are on track and expected to be completed by 2020. Today, assistance is provided to establish a model district hospital in Ulaanbaatar with comprehensive set of services; increase the hygiene, blood safety, and medical waste management capacity of hospitals; and improve the governance and autonomy of hospitals for better efficiency. ADB''s long-term presence in the sector, with its broad experience in reforming the sector, makes it an ideal and trusted partner. The proposed investment program is in line with ADB's Strategy 2030; country operational business plan for Mongolia, 2019-2021; country partnership strategy for Mongolia, 2017-2020; and Operational Plan for Health, 2015-2020.


Health status of Mongolians improved

Project Outcome
Description of Outcome

Access to affordable quality primary and secondary health services in Khovd and Uvs aimags (provinces), Ulaanbaatar ger (traditional tent) areas, and selected soums (aimag subdistricts) improved

Progress Toward Outcome The project administration was delegated from EASS to MNRM effective 30 Sep 2021. The Tranche 1 implementation is significantly delayed in 2020-2021 due to the challenges of the COVID-19 pandemic. Currently, the implementation progress is estimated at 9% against the elapsed time of 45%. The project experienced significant delays in 2020-2021 due to: (i) the COVID-19 pandemic has placed a significant burden on all MOH staff as the key agency responsible for COVID-19 response and prevention, (ii) lockdowns in Ulaanbaatar City have prevented project meetings from taking place, and (iii) changes in MOH leadership had delayed selection of key positions including the Project Director and Project Steering Committee.
Implementation Progress
Description of Project Outputs

Urban and rural primary health care strengthened

District and aimag hospital services improved

Health financing system strengthened

Procurement and financial management capacity of government health entities strengthened

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

Output 1: Urban and Rural Primary Health Care Strengthened. Output 1 will (i) establish four Family Health centers (FHC) in poorer ger areas of Ulaanbaatar, three of which uses low-carbon technology (LCT), and five Soum Health Centers (SHC); (ii) establish a national emergency care center (NECC) backed by telemedicine and air services; (iii) reform primary health care (PHC) financing, staffing, contracting, and quality management at the Ulaanbaatar City Health Department and aimag health departments; (iv) implement models of integrated primary and secondary health care services; and (v) implement public-private partnership (PPP) maintenance model.

The MOH engaged JV of Monconsult LLC and GOPA Worldwide Consultants GmbH, the consulting firm for Primary Health Care Development (CS01) in December 2021. CS01 will assist MOH (i) in reviewing and updating PHC sector analysis and reform concepts, (ii) developing and piloting a new PHC service model, (iii) strengthen performance-based contracting and financing, (iv) developing and piloting integrated service models at primary and secondary service levels. CS01 prepared an inception report and currently is assessing the current situation of the primary health care with a focus on governance, leadership, ethics, patient rights, quality management, patient safety, facility safety, and emergency management with the involvement of 154 FHCs in UB and 206 SHCs in aimags.

CS01 developed functional plans and layouts for three new FHCs to be constructed in UB under the project considering current regulations and requirements. Detail design of FHCs will be developed by Khatanbaatar LLC, consulting firm recruited by MOH in February 2022, for Design and Supervision of Construction Works for FHCs, SHCs, and NECC (CS03). The project will apply LCT in four FHCs in the periphery of Ulaanbaatar without access to central heating systems by installing ground source heating pumps. In December 2021, the MOH engaged JV of Azusa Sekkei Co.Ltd., Kokusai Kogyo Co.Ltd and PCDP LLC, consulting firm for Low Carbon Technologies (CS10), to assist in the installation of a ground source heating pump in FHCs. Detailed design and draft bidding documents for construction of three FHCs in UB applying LCT are planned to be prepared by 3Q 2022.

The project will establish four SHCs. One out of the planned five SHCs in Tranche1 is dropped from the project because the government started its construction using its own budget. CS01 developed functional plans for four SHCs. The functional plans will be reviewed and approved by MOH. CS03 will prepare detail design and procurement of civil works for contraction of SHCs is planned in 1Q 2023.

Establish a NECC backed by telemedicine and air services. The MOH has initiated the procurement of a consulting firm for Establishment of Emergency Management System (CS02), which will assist in improving the emergency medical service (EMS) system in Ulaanbaatar by (i) assessing the current situation, (ii) proposing a sustainable model to ensure the effective operation of the EMS, (iii) linking telemedicine services with EMS, (iv) developing a concept for upgrading the existing UB city Emergency Center into a National Emergency Care Center. The contract negotiation for package CS02 failed, and the package was re-advertised.

Output 2: Improve District and Aimag Hospital Services. Output 2 will (i) expand the Khan-Uul district hospital using LCT; (ii) improve Khovd and Uvs aimag hospitals; (iii) strengthen hospital autonomy; and (iv) implement PPP maintenance models for district hospitals.

Expand the Khan-Uul district hospital. In May 2021, the government proposed using the detailed design of the model Songinokhairkhan district hospital (SDH) for the new Khan Uul district hospital. Therefore, project will not engage a consulting firm to develop a detailed design of the new Khan-Uul hospital. Still, it hired an individual national consultant (CS16) to adjust the SDH drawings to the land and physical infrastructure of the existing Khan-Uul hospital. The consultant prepared four options for the general hospital plan; the Technical Working Group chose the fourth version. CS16 also reviewed the detailed design of SDH and proposed some changes and modifications based on new standards and construction requirements enforced by the government since 2015, after the approval of the detailed design of SDH. In addition, CS10 reviewed the detailed design regarding the application of LCT and provided recommendations on introducing an energy-efficient HVAC system, high insulation windows, solar photovoltaic rooftop. Based on these recommendations, the MOH requested the author of the detailed design of SDH (Building Technology LLC.) to revise and update the detailed design for Khan-Uul hospital by reflecting above mentioned recommendations. The Building Technology LLC (CS18) was engaged in March 2022; the revision of drawings completed in June 2022. The revised detailed design for the Khan-uul hospital were reviewed and approved by authorities. The project plans to advertise the construction of Khan-Uul hospital in 4Q 2022. The construction of Khan-Uul district hospital requires the demolition of five small buildings in the hospital compound. The UBMO approved the budget and contracted a company to demolish them.

Improve Khovd and Uvs aimag hospitals. In November 2021, ADB, MOH and MOF agreed to move the extension of Khovd aimag hospital to Tranche 2.

The MOH has engaged Intermed Medical LLC, consulting firm for Hospital Planning and Management (CS04), which will assist MOH (i) in conducting feasibility studies and needs assessment for Khovd and Uvs aimag hospitals, (ii) developing service planning, functional design for the Uvs and Khovd hospital extensions, and (iii) assist in the operational management of hospitals with a focus on quality management and assets management. CS04 was mobilized in December 2021. CS04 prepared a draft inception report. CS04 developed a draft concept design and functional plan for Uvs aimag hospital extension. MOH recruited a consulting firm for Detail Design and Supervision of Construction Works (CS06) that will assist MOH (i) in developing the detailed design for Khovd and Uvs aimag extensions, and (ii) supervise the construction works in two sites.

Output 3: Health Financing System Strengthened.

In August 2020, the Great Khural of Mongolia approved principal changes in the law on health, law on medical care and services, and the health insurance law to allow to switch to a strategic purchasing system in the health sector. Therefore, instead of planned activities related to the development and design of the legal framework, the project will focus on strengthening the capacity of the health insurance organization and building the ability of the government entities involved in the health financing cycle. The MOH will engage a consulting firm for the Establishment of Strategic Purchaser (CS07) and two to three individual consultants to address gaps in specific needs of government officials of MOH, MOF, National Health Insurance Organization its aimag/city branches.

In close collaboration with the TA9701 team, the project developed capacity building training program for the government officials. In 2021, 66 staff of MOH (68%) received 2-module training on the strategic purchasing system. MOH also selected and trained 20 national trainers (ToT) to conduct on-the-site coaching training for all (50) public hospitals on the new health financing model and assist them in preparing annual financial planning budget proposals. As of today, ToTs conducted training for 2315 staff of 115 health care organizations, including aimag/city health insurance branches, aimag/city health departments, aimag/district general hospitals, and tertiary level state hospitals. The project also developed capacity building program for the General Agency for Health Insurance (GAHI) in strategic purchasing. As of April 2022, the project conducted seven capacity-building training for 163 staff of the GAHI (80.9% of them were female). The training covered key concepts in the new legal reforms, including selecting healthcare organizations, contracting, service quality and claim review, defining health services packages, reimbursement, and calculating demand.

Output 4: Procurement and Financial Management Capacity of Government Health Entities Strengthened. Outcome 4 will develop an institutional and capacity-building program for MOH and the government procurement agency (GPA) on procurement and financial and risk management. The MOH proposed a split of the Consulting Services for Strengthening Agencies' Procurement and Financial Contract Management Capacities (CS08) into several individual international and national consultant packages to have more tailored consultancy support in procurement, financial, and risk management. In November 2021, ADB agreed that the MOH would first recruit one international and one national procurement consultant who will (i) assist the MOH and GPA in evaluating bids for the construction of Khan-Uul district hospital, and (ii) assist in capacity building of members of bid evaluation committee on procurement related matters. The consultants were recruited in September 2022.

Geographical Location Ulan Bator
Summary of Environmental and Social Aspects
Environmental Aspects Environment (category B). An initial environmental examination and an environmental management plan (EMP) were prepared by ADB to comply with the Safeguard Policy Statement.21F21F21F Subsequent tranches may be category B or C, but any activities that trigger category A are excluded from funding. Environmental impacts are anticipated during the construction and demolition of structures, including dust and noise from earthworks, transport, and handling of aggregate materials and waste; temporary traffic disturbances; and risks to community and occupational health and safety. If renovation or refurbishment for any component requires removal of asbestos-containing materials, the particular activity will be dropped from the MFF program. Mitigation measures defined in the EMP, such as construction site management and regular monitoring of the project's environmental performance during construction and operation, will minimize anticipated impacts and reduce other construction-related health and safety concerns to acceptable levels. The environmental assessment and review framework (EARF) provides guidance for selection, screening, and categorization; environmental assessment; and preparation and implementation of the program's environmental safeguard plans. All three projects under the investment program must comply with EARF requirements to be eligible. The PIU and its environment and social safeguards specialist, assisted by implementation consultants, have adequate capacity to implement mitigations required by the EMP for project 1, and the EARF for subsequent projects 2 and 3.
Involuntary Resettlement Involuntary resettlement (category C). The components under project 1 will not trigger any land acquisition or involuntary resettlement impacts. Due diligence confirmed that land certificates and/or possessions have been issued, indicating ownership of land by the hospital, diagnostic center, and FHCs. A resettlement framework has been prepared by ADB for the MFF to guide the screening, preparation, and implementation of a land acquisition and resettlement plan for any components with involuntary resettlement impacts in subsequent tranches.
Indigenous Peoples 36.Indigenous peoples (category C). The Khovd and Uvs aimags are home to the following ethnic groups: Bayad, Buriad, Durvud, Kazakh, Khalimag, Khalk, Khoton, Myangad, Torguud, Tuva, Uriankhai, Uuld, and Zakhchin. The poverty and social analysis found that ethnic minority groups will not be adversely affected and that they will equally benefit from project 1. The SGAP includes measures to enhance access to and promote socially inclusive and culturally responsive health care services. An indigenous peoples planning framework has been prepared by ADB for the MFF to guide the screening, preparation, and implementation of ethnic minority development plans for any differentiated impacts on ethnic minorities for subsequent tranches
Stakeholder Communication, Participation, and Consultation
During Project Design The Community Awareness and Participatory Action Plan (CAPAP) was prepared to ensure that the various projects (and expected outputs) under the envisaged Health (VI) Sector Reform and Investment Program are inclusive with effective participation of all stakeholders especially the poor and vulnerable groups. The principal focus of the CAPP is to inform these groups of the envisaged investment projects and provide opportunities for (public) discussion and feed-back so that their voice is heard and taken into consideration at all levels of decision making.
During Project Implementation Communication with stakeholders will be managed by the PIU administration officer and eventually the environmental and/or social safeguards specialist. The PIU will ensure local stakeholders are consulted, that information on the project is disseminated, and that questions and complaints are addressed quickly and effectively. The community participation component builds off the participation process initiated under the transaction technical assistance and has a focus on community-based planning. During implementation, the development of a framework with a transparent mechanism to regulate the land redevelopment and integration of health facilities and its staff will support continuous dialogue with the communities and will ensure the integration of the population into the process.
Responsible ADB Officer Jigjidsuren, Altantuya
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission (MNRM)
Concept Clearance 05 Sep 2018
Fact Finding 04 Jun 2018 to 14 Jun 2018
MRM 18 Dec 2018
Approval 11 Oct 2019
Last Review Mission -
Last PDS Update 03 Oct 2022

MFF Facility Concept 0111-MON

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 163.51 Cumulative Contract Awards
ADB 158.34 - 0.00 0.00 %
Counterpart 1.69 Cumulative Disbursements
Cofinancing 3.48 - 0.00 0.00 %

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Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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Tender Title Type Status Posting Date Deadline
Employer's supervision for GSHP of the FHCs Firm - Consulting Active
Employer's supervision for SHCs of Tarialan (Khuvsgul), Dashinchilen (Bulgan), FHCs of Khoroo 17 in Bayanzurkh District, Khoroo 19 of Chingeltei district Firm - Consulting Closed
Employer's supervision for Uvs Aimag General Hospital Firm - Consulting Closed
Community consultation entity Firm - Consulting Closed
Health Technology Assessment Specialist Individual - Consulting Closed
Environmental impact assessment expert Individual - Consulting Closed
Establishment of strategic purchaser Firm - Consulting Closed
Health Economist Individual - Consulting Closed
Community consultation entity Firm - Consulting Closed
Establishment of emergency medical servcies Firm - Consulting Closed
Resettlement expert Individual - Consulting Closed
JFJCM consulting services/The consulting service for low-carbon technology Firm - Consulting Closed
Establishment of an emergency medical services system Firm - Consulting Closed
Primary Health Care and Emergency Care Specialist Individual - Consulting Closed
Medical equipment procurement officer Individual - Consulting Closed
Civil Works procurement officer Individual - Consulting Closed
Hospital Coordinator service specialist Individual - Consulting Closed
Project manager Individual - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.