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Health Sector Development Program: Project Completion Report

sector: Health | country: Lao, People’s Democratic Republic

The program tested a new fund flow mechanism for the health sector. Based on the successful trial the government has increased funding for health at the provincial level, resulting in expanded health services coverage, particularly for maternal, newborn, and child health care (MNCH) services and the provision of free health care for the poor. The framework engendered the provinces to allocate additional funds for non-wage recurrent costs to support the additional services, and demonstrates that block- grant transfers based on sound fiscal planning can be an effective mechanism to reduce transaction costs and expand social services.

The coverage for the health equity fund (HEF) scheme supported by the program increased from three pilot provinces to cover all eight target provinces. This resulted in a higher number of eligible beneficiaries and health service utilization by the poor. Despite this, a large percentage of the eligible beneficiaries were not accessing the free HEF-funded services. There are many reasons: (i) potential beneficiaries didn’t know about the services, suggesting a need for better social marketing; (ii) services at health facilities are still substandard; (iii) most ethnic and poor villages are geographically remote, with no health facilities; and (iv) cultural beliefs that favor the use of traditional medicine or birthing at home. District health services need to be more proactive and reach out to communities in remote areas. Assisted birthing in the home would help, while growth monitoring, nutrition and food security, and proper immunization of infants, children and adults could make substantial impacts on the population’s health and nutritional status.

Funding is necessary, but is not sufficient for building capacity in the provinces and districts as they move to decentralized governance. Strengthening regulatory arrangements and institutional capacity is dependent on good management and financial procedures. A number of the provinces have increased management and technical competency and can play a valuable role through mentoring and/or twinning programs to help expand successful initiatives to others provinces.

Output and outcome performance monitoring was generally limited to the baseline, midterm and end of program survey. Key core performance data should be collected, analyzed and reported on a quarterly basis, in alignment with standard government indicators. This provides provinces and the national level with an up-to-date status of program performance and comparative data across provinces. These data should inform the annual planning process and identify where additional support is needed.

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