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$ 148.34 million
Concessional ordinary capital resources lending US$ 10.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

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

Gender Equity and Mainstreaming Gender equity
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 exercise the 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 (1.8 2.1 times higher in rural areas than the national average), and stillbirths (1.1 6.1 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 public private 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.

Impact 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 Tranche 1 approved on 24 October 2019 and became effective on 4 March 2020. Start-up activities were significantly delayed due to disruptions caused by the COVID-19 pandemic but there has been good progress in the implementation arrangements for the project.
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)

1. Tranche 1 consultant recruitment were initiated in Q4 2020.

2. To be initiated under Tranche 2.

3. Terms of reference (TOR) for CS07 under Tranche 1: consulting services for establishment of strategic purchaser model is being reviewed prior to advertisement. The consulting services aim to support the MOH and other key stakeholders (the MOF, Ministry of Labor and Social Protection, HIO) on their efforts to further develop the strategic purchaser of health care system in order to promote outcome/results-based financing of health care services and improve both quality and efficiency in health care provision.

4. Terms of reference (TOR) for CS08 under Tranche 1: consulting services for strengthening agencies' procurement, financial contract management capacities is still being reviewed prior to advertisement. The consulting service will support central and decentralized structures of the MOH, GPA, UCHD, and Khovd and Uvs aimag health departments with the implementation of related financial, procurement, and contract management processes.

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 Urban and Social Sectors Division, EARD
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 29 Sep 2021

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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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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Tender Title Type Status Posting Date Deadline
Resettlement expert Individual - Consulting Closed 07 Sep 2022 13 Sep 2022
JFJCM consulting services/The consulting service for low-carbon technology Firm - Consulting Closed 28 Apr 2021 27 May 2021
Establishment of an emergency medical services system Firm - Consulting Closed 13 Apr 2021 12 May 2021
Primary Health Care and Emergency Care Specialist Individual - Consulting Closed 11 Jun 2020 15 Jun 2020
Project manager Individual - Consulting Closed 29 May 2020 08 Jun 2020
Medical equipment procurement officer Individual - Consulting Closed 29 May 2020 08 Jun 2020
Hospital Coordinator service specialist Individual - Consulting Closed 29 May 2020 08 Jun 2020
Civil Works procurement officer Individual - Consulting Closed 29 May 2020 08 Jun 2020

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.