The World Bank Board of Executive Directors today approved a US$ 19 million loan for the Additional Financing of the Second Phase of the Health System Modernization Project for Armenia. The project will support the Government of Armenia efforts to expand primary health care (PHC) services on the basis of family medicine, and upgrade hospital networks in the regions. The aim of the project is to provide the population, in particular the most vulnerable groups, with improved access to quality health care services, and also to better manage public health threats.

The project will continue supporting the Government’s Health Reform Program of streamlining, consolidating and upgrading health care facilities, fully restructuring the PHC network, and also improving the allocation of limited financial and human resources to expand free access to essential health care services for the most of the population. In particular, this project will:

• Upgrade the physical conditions of additional 14 rural ambulatories, provide modern equipment, and retrain medical personnel (family physicians and family nurses) on family medicine;
•  Finance purchase of equipment, supplies, and furniture for four regional hospitals in Ararat, Armavir, Aparan, and Goris;
• Fully equip the Gavar and Gyumri medical centers;
• Finance the construction of a new hospital building in Gyumri;
• Equip five regional hospital networks in Meghri and Kapan (Syunik region), Abovian (Kotayk), Alaverdi and Vanadzor (Lori), and Berd (Tavush) with modern technology. The medical staff of the hospitals will be trained on clinical case management and provided with reference materials.

“The process of modernization of hospitals in the regions has already resulted in a consolidation of services, improvement in efficiency and reduction of costs, better access to quality health care in five regions of Armenia,” says Asad Alam, World Bank Regional Director for the South Caucasus countries. “Based on the lessons learned and encouraged by the success of the project, this second phase will scale up the process of optimization in the country’s remaining ten regions in order to deliver better quality care to the population.”

“The project will also help improve the governance and management structures of health care facilities,” says Susanna Hayrapetyan, Head of the World Bank Team that designed the project. “Strengthening the Health Ministry’s effective stewardship in policy making, regulation and accountability will ensure better and targeted use of public resources.”

In addition, the project will address activities of institutional capacity strengthening critical to the reform agenda.  Those include: human resource development and licensing of medical facilities;  completion of health services costing study;  piloting case-mix hospital financing system; introduction of hospital Quality Assurance system;  establishment of a computerized student examination system at the State Medical University; and independent financial audits at each project hospital and public disclosure of audit reports.

Under the World Bank project, 1200 family doctors and more than 1300 family nurses have been trained.  New out-patient facilities were built in 79 communities of Armenia.  In 66 communities, these facilities were completely refurbished. All 255 out-patient facilities and health centers received new medical equipment, furniture and other necessary items.

Total financing of the Project is US$ 25.3 million, of which the Government of Armenia will finance US$ 6.3 million from its own resources. The IBRD Loan of US$ 19 million has a maturity of 25 years and a grace period of 10 years included.

Since joining the World Bank in 1992 and IDA in 1993, commitments to Armenia total approximately US$ 1.409 billion.