Mongolia: Strengthening Hospital Autonomy

Sovereign Project | 49278-001

The Government of Mongolia requested assistance from the Asian Development Bank (ADB) to strengthen public hospital autonomy. A fact-finding mission took place in Ulaanbaatar in August 2015, and ADB reached agreement with the government on the impact, outcome, outputs, cost and financing, implementation arrangements, and outline terms of reference for consulting services for the policy and advisory technical assistance (TA). Concept clearance was obtained on 22 October 2015.

Project Details

  • Project Officer
    Jigjidsuren, Altantuya
    East Asia Department
    Request for information
  • Country/Economy
    Mongolia
  • Modality
    • Technical Assistance
  • Sector
    • Health
Project Name Strengthening Hospital Autonomy
Project Number 49278-001
Country / Economy Mongolia
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9037-MON: Strengthening Hospital Autonomy
Technical Assistance Special Fund US$ 1.10 million
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Health / Health sector development and reform

Gender Equity and Mainstreaming Some gender elements
Description

The Government of Mongolia requested assistance from the Asian Development Bank (ADB) to strengthen public hospital autonomy. A fact-finding mission took place in Ulaanbaatar in August 2015, and ADB reached agreement with the government on the impact, outcome, outputs, cost and financing, implementation arrangements, and outline terms of reference for consulting services for the policy and advisory technical assistance (TA). Concept clearance was obtained on 22 October 2015.

The capacity of the Ministry of Health and Sports and other central and local government agencies to engage in a broad hospital reform process needs to be strengthened. This will require a phased approach to hospital autonomy with built-in mechanisms to learn from the implementation process and readjust implementation tools as required. Senior hospital management staff, board members, and selected community representatives will require substantial enhancements to their capacity to face their new responsibilities to manage autonomous facilities. The Ministry of Finance's capacity to oversee and monitor hospital financing reform will also need to be reinforced.

ADB has supported the government to improve sector governance, and strengthen health financing and health insurance under the Third Health Sector Development Project and the ongoing Strengthening the Health Insurance System, which resulted in a high consensus among stakeholders on key policy reforms in the health sector, including provider and purchaser split, autonomous status of providers, health insurance as a strong purchaser, and pooling of funds; and fair competition between public and private providers. The Third Health Sector Development Project also assisted the government in identifying factors that influence hospital efficiency and supported the government in revising the Health Law (2011).

Based on this momentum, the government has requested ADB support to (i) further advance the regulatory framework for hospital autonomy, (ii) build capacity of the government and hospital staff to manage hospitals within the improved legal environment, and (iii) provide technical support in the gradual implementation of hospital autonomy.

Project Rationale and Linkage to Country/Regional Strategy

The Government of Mongolia has made some initial attempts to reform hospital management. The revised Health Law (2011) has provisions for the establishment of hospital management boards in state-owned tertiary level hospitals. However, because of changing priorities and lack of technical capacity of MOHS, no regulations and operational tool for improved governance and financial and human resources management were developed to facilitate the implementation of hospital autonomy. Implementation of hospital autonomy in a few tertiary-level public hospitals in 2011, resulted in merely adding another administrative layer to the management board, which complicated hospital administration as hospitals continued to operate under direct control of MOHS. MOHS ceased this attempt in 2013.

Overall, Mongolia is developing a policy environment to improve quality of health services through the introduction of competition and market elements in the management of public hospitals. This objective is in line with the implementation framework of the Health Sector Strategic Master Plan, 2005 -2015, to ensure transparency, accountability, autonomy, and appropriate delegation of authority in public hospitals. In July 2015, the government submitted to Parliament a proposed package of draft legislations, which aims to improve the governance (enhanced decision-making power) and management of public hospitals in a comprehensive way. These new pieces of legislation will be closely interconnected with the revised Health Insurance Law (approved by the Parliament in January 2015), which enabled the health insurance organization to act as the main purchaser of health services. Autonomy of hospitals is a precondition to a sound purchasing process, as it allows hospitals to negotiate with the health insurance organization.

Impact

Public hospitals'' management performance improved

Autonomy of general and specialized hospitals in managing financial and human resources ensured

Project Outcome
Description of Outcome Autonomy in pilot hospitals strengthened and decision to expand autonomy nationwide taken
Progress Toward Outcome

The TA implementation is proceeding well according to the schedule. The overall project implementation progress is estimated at 92.5% against elapsed time of 99%.

The piloting of hospital autonomy elements in selected hospitals is succeeded as of September 2019. The M&E framework needs to be approved by the MoH and will be applied to those hospitals that have an established Hospital Board.

Implementation Progress
Description of Project Outputs

1. Regulatory environment for hospital autonomy analyzed and developed

2. Institutional and human resource capacity for hospital autonomy strengthened

3. Hospital autonomy implementation piloted

4. Public awareness on hospital autonomy increased

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

Output 1. The TA consultants reviewed best international practices in hospital autonomy applicable to the Mongolian context, including experience of Germany, England, France, Estonia and Kyrgyzstan. The consultants also conducted a desk review of policy and regulatory documents that govern operations of public hospitals in the areas of (i) hospital governance, (ii) human resources and management functions and (iii) financial management. Based on the review and consensus reached with the MOH technical working group (TWG), the consultants prepared the draft Conceptual Framework (CF), which includes the following three domains: (i) governance and management, (ii) finance, and (iii) human resources and two options of autonomy (low-to- medium and medium-to-high) per each domain. The CF also highlights specific risks of certain options and provides recommendations for preferred or phased approach. The draft CF was accepted by TWG in December 2018 and presented to stakeholders in March 2019. The consultants were tasked to assist MOH in drafting procedures and regulatory documents to ensure implementation of MCSL in areas related to hospital autonomy. In 2018, the TA made a good progress in supporting MOH and finalizing the (i) bylaw of the hospital board, approved in November 2018; (ii) selection criteria and selection procedures for the hospital director, approved in November 2018; (iii) selection procedures for the community representatives in the hospital board, approved in 2018; and (iv) sample contract between the hospital board and the hospital director including two appendixes on job description of the hospital director and performance indicators. The TA will further contribute to defining and preparing the required regulatory documents based on a chosen autonomy option. The TA helped MOH revise the healthcare facility standards according to the new requirements set off by the MCSL. With the technical inputs supported by the TA, six healthcare facility standards were revised, including the standards for the (i) specialized center, (ii) central hospital and (iii) general hospital, which were approved by the relevant authorities. The new standards reflect the consultants recommendations, including (i) removal of the input-related requirements, such as the number of staff per bed and number of beds in wards and units, (ii) inclusion of general functions and hospital services to be provided by a facility regardless of the ownership type, (iii) minimum requirements for medical equipment by level of facility, and (iv) new provisions related to patient and staff safety. A comprehensive desk review was conducted in January-February 2019, the report and findings presented to the MoH in March 2019 and to the TWG in May 2019. The conceptual framework and literature review were presented to MOH and to Directors of Central hospitals of provinces during the nationwide consultative meeting on 30 Aug 2019. MOH has committed to issue a Ministerial order on the Conceptual Framework which includes the implementation plan. Other related documents were distributed to all stakeholders including staff and directors of the MOH and the directors of central hospitals urban and rural area during the final conference.

Output 2. Institutional and Human Resource Capacity for Hospital Autonomy Strengthened. The TA conducted a rapid assessment of training providers that offer training for hospital managers. The assessment result revealed that the training providers predominantly focus on management theory and concepts, rather than developing practical skills and capacity in hospital management. Therefore, it was proposed that capacity building under the TA should address these deficits by developing a competency-based training. A training needs assessment was conducted by the consultants with a view to increasing capacity with respect to new tasks and decision-making skills. The training needs assessment covered 32 management competencies, grouped under four areas (i) performance and change management, (ii) human resource management, (iii) financial management, and (iv) governance and accountability, and analyzed the training needs of six different groups in the hospitals, such as hospital directors, management teams, heads of departments, and managers in charge of human resource, finance and service quality. Based on needs assessment, the consultants developed a training concept, training programs and materials grouped into 10 modules under the four areas. During the screening of the potential training providers, the consultants identified around 20 lecturers and individuals that were trained as the trainers for the hospital management training under the TA. As of end of 2018, the consultants conducted 13 trainings in 5 modules which were attended by 300 managers of 4-6 pilot hospitals. MOH proposed to do not limit the capacity building activities to pilot hospitals, but to extend to all tertiary and secondary level hospitals nationwide. All training programms have been implemented successfully. The national capacity building specialist conducted supported by the PIU administration and finance coordinator a post-training evaluation among the selected hosptials. The results of the post training evaluation were compiled in a technical report.

Output 3. Hospital Autonomy Implementation Piloted. The TA aimed to pilot-test the implementation of the approved hospital autonomy framework in selected 5 hospitals. The consultants drafted a list of criteria to select hospitals for piloting and, in 2016, MOH selected six hospitals, namely the Third Central Hospital, the National Dermatology Hospital, Chingeltei District Health Center, Tuv Aimag General Hospital, Selenge Aimag General Hospital and Uvurkhangai Regional Diagnostic and Treatment Center. Later in 2017, the two hospitals were removed from the list (Uvurkhangai Regional Diagnostic and Treatment Center, and Chingeltei District Health Center), and MOH established the hospital boards in remaining four hospitals. The MOH established hospital boards in the pilot hospitals. Training of board members and hospital management in five modules (Induction, Strategic planning, Strategic Human resources management, Performance management and Financial management) is ongoing. The TA will facilitate the hospital board meetings, selection of the hospital director and the development of operational procedures and practical guidance, such as a sample of job description for hospital board secretary, guidelines for board meeting and etc. The TA will also develop monitoring and evaluation framework and facilitate the MOH monitoring of the hospital operations under the pilot. However, the MOH management is hesitating to accelerate the pilot due to political sensitivity of the issue and concerns of being politicized in case of a failure or any mistakes under the pilot. All members of the four hospital boards (HBs) are appointed, some have already been reappointed, each hospital board underwent 5 one-day trainings, but the HBs are not functional yet due to various pending decisions (e.g. financial compensation). Once they are functional, the hospital director and the management team can be selected. Once the M&E framework will be approved, operations under hospital autonomy can start and then performance assessed.

Output 4. Public Awareness on Hospital Autonomy Increased. On the request of MOH, the TA planned activities to plan and implement an advocacy campaign to increase public awareness on hospital autonomy was cancelled. ADB and MOH, through the Memorandum of Understanding (MOU) signed in November 2017, agreed to support the hospital financial autonomy concept by assisting MOH in defining and weighting disease groups (DRGs) for hospital services funded by the state budget and developing the output-based payment system. In June 2018, the TA engaged two NGOs to develop the DRGs in coordination of the ongoing initiatives at the Ministry of Finance (MOF) and the National Health Insurance Agency (NHIA). The NGOs (i) collected disease and cost data from 18 hospitals, including eight tertiary level hospitals and 10 aimag/district hospitals, (ii) aggregated the cases by similarity of clinical conditions, complications and resource requirements into 22 diagnostic categories, (iii) defined 558 diagnostic-related groups by ICD10 and ICP9 codes using the international grouping system (recommended by WHO), (iv) assigned weights of the DRGs, and (v) estimated unit costs for the DRGs. Technical reports on DRG development were discussed at the TWG meetings and were accepted by MOH in December 2018. The NGOs finalized the reports by addressing the MOH comments by the end of February 2019. Based on the newly developed DRGs, which cover almost all cases (inpatient, outpatient and emergency cases), the government (MOH and MOF) plans to re-design the current line item-based financing from the state budget into a case-based provider payment system and revise the payment tariffs for the health insurance fund and the state budget. In 2019, MOF plans to use the new DRGs to pilot global budgeting in 10 hospitals including four hospitals under the hospital autonomy pilot. The global budgeting in combination with the case-based payment system will greatly contribute to the hospital efficiency. A comprehensive desk review was conducted in January-February 2019, the report and findings presented to the MoH in March 2019 and to the TWG in May 2019. The conceptual framework and literature review were presented to MOH and to Directors of Central hospitals of provinces during the nationwide consultative meeting on 30 Aug 2019. MOH has committed to issue a Ministerial order on the Conceptual Framework which includes the implementation plan. Other related documents were distributed to all stakeholders including staff and directors of the MOH and the directors of central hospitals urban and rural area during the final conference. The project prepared a knowledge product in August 2019 and incorporated the feedback from ADB in the final version which was submitted to ADB in September 2019.The TA final conference was conducted in 6 Sep 2019 and all documents including CF, implementation plan, related orders etc., were presented and distributed to all stakeholders.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design An extensive review of international and national experiences will help in developing a conceptual framework and a strategic implementation plan for hospital autonomy based on extensive consultations with relevant stakeholders.
During Project Implementation Readiness for implementation of hospital autonomy will be ensured through intensive institutional and human resources capacity development. A phased action plan for hospital autonomy will be implemented in five selected facilities. Hospital performance will be monitored and evaluated, and lessons learned will serve for the formulation of policy recommendations for further improvements of hospital autonomy.
Business Opportunities
Consulting Services In dialogue with MOHS, ADB has recruited a consulting firm using quality- and cost-based selection with the ratio of 90:10 and a simplified technical proposal to provide 21 person-months of international and 20 person-months of national consultants' inputs, including experts in hospital autonomy, governance, health and hospital management, and capacity building. In addition, two national consultants, to assist in developing and implementing an advocacy plan and public campaign (2 person-months) and a community participation plan (4 person-months), will be recruited on an individual basis. A PIU has been established to facilitate project implementation and day-to-day organizational and technical matters. A project coordinator (24 person-months) and an administration and finance coordinator (27 person-months), who will comprise the PIU, have been recruited individually. The consulting firm and coordinators have been hired and national individual consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement The PIU will be responsible for procuring the office equipment under the supervision of MOHS in accordance with ADB's Procurement Guidelines (2015, as amended from time to time). MOHS will retain the equipment upon TA completion.
Responsible ADB Officer Jigjidsuren, Altantuya
Responsible ADB Department East Asia Department
Responsible ADB Division Mongolia Resident Mission
Executing Agencies
Ministry of Health (formerly Ministry of Health and Sports)
1st Floor, Government Building VIII
Olympic Street 2, Ulaanbaatar
Mongolia
Timetable
Concept Clearance 22 Oct 2015
Fact Finding 17 Aug 2015 to 24 Aug 2015
MRM -
Approval 09 Dec 2015
Last Review Mission -
Last PDS Update 30 Sep 2019

TA 9037-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Dec 2015 01 Apr 2016 01 Apr 2016 31 Mar 2018 30 Sep 2019 02 Dec 2019
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,100,000.00 0.00 100,000.00 0.00 0.00 0.00 1,200,000.00 17 Jun 2022 1,015,667.79

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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.

None currently available.


Evaluation Documents See also: Independent Evaluation

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Related Publications

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The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

Tender Title Type Status Posting Date Deadline
Administration and finance coordinator Individual - Consulting Closed 18 Aug 2018 24 Aug 2018

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 9037 14 Jun 2016 GFA Consulting Group GmbH (Germany) | Eulenkrugstrasse 82 D-22345 Hamburg Ministry of Health and Sports 582,500.00

Procurement Plan

None currently available.