Introduction
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Peru’s (APL2) Health Reform Program Project sought to reduce maternal and infant mortality rates in Peru’s nine poorest, largely rural and indigenous, regions. The targeted regions (Amazonas, Huánuco, Huancavelica, Ayacucho, Apurimac, Cusco, Cajamarca, Ucayali and Puno) are characterized by greater population dispersion, fewer health facilities, lower service demand and generally a higher incidence of infant and maternal morbidity and mortality. Therefore, the interventions targeted by the Project improved maternal and infant mortality in the regions where health improvements are more difficult to achieve.
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Higher maternal and infant mortality rates and malnutrition in children under 5 are associated with higher poverty levels and lower access to health services.11 According to data from ENDES 2005-2007 neonatal mortality was 11 times higher among newborns of the poorest income quintiles (23 per 1000 live births) compared to those of the richest income quintiles (2 per 1,000 live births). Likewise chronic malnutrition has a very unequal geographic and income distribution.12 Maternal mortality, double the LAC average also reflects wide disparities in Peru, with Lima measuring an MMR of 52 in 2000 while the MMR for Huancavelica and Puno were 302 and 361, respectively in the same year. In these two regions only 21 and 27.8 percent of the total births were professionally attended.
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Studies have demonstrated that public spending on rural infrastructure is one of the most powerful instruments that governments can use to promote economic growth and poverty reduction.13,14 In particular, maternal, newborn and child health (MNCH) interventions are recognized by the literature as highly cost-effective investments. Particularly effective interventions in MNCH packages include labor and delivery management, preterm birth care, and serious infectious diseases and acute malnutrition treatment 15 ― all key focus of PARSALUD. Many maternal and infant deaths can be prevented with cost-effective health interventions and services targeted at those most in need.16,17 Studies show that the direct health benefits of investing in family planning and maternal and newborn health services is dramatic, reducing the healthy years of life lost due to disability and pre-mature death. Furthermore, the implementation of cost effective MNCH interventions not only has direct benefits for women and children but also for the health sector and societies as a whole.18 Targeted investments can support the response of health systems to other urgent medical needs, curb sexually transmitted diseases, while reduce unplanned births and family size, thereby improving educational and employment opportunities for women, saving public-sector spending for health, water, sanitation and social services and reducing pressure on scarce natural resources.
Project Costs
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Lack of infrastructure and medical personnel attention are an obstacle to health service provision for women and children in rural areas. Closing the gap in health care access requires targeting resources on those least likely to be receiving care, such as the indigenous and rural population in Peru. Investment in health care infrastructure is cost effective and supports the improvement of health outcomes in rural and poor areas. A recent study prepared by Juan Jose Diaz and Miguel Jaramillo evaluating Peru’s PARSALUD program found infrastructure investments (and training) cost effective through the prevention of blood loss.19 Eighty three percent of Peru’s Health Reform project funds (USD$138 million) went to fund Component 2 (demand side interventions), which was one of the most effective in terms of PDO achievement.20
Table 1: Component Effectiveness21
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PDO 1
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PDO 2
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PDO 3
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PDO Achievement
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0.70
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0.79
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0.94
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Costs for related component
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5,861,770.32
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138,555,014.74
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3,262,626.36
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Indirect costs per related component
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4,522,123.35
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4,522,123.35
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7,787,229.78
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Total costs for related component
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10,383,893.67
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143,077,138.09
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11,049,856.14
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Feasibility Study Benefits
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The GOP conducted a feasibility study (FS) during project preparation evaluating two project investment options. The project was selected for its low cost-effectiveness ratio vis-à-vis alternative projects. Though the FS was not updated during the ICR, the assumptions made regarding the estimation of Project costs and effectiveness for the feasibility study appear adequate. The economic valuation was undertaken following accepted international standards for estimating the present value of future costs avoided in the target population. The Project’s costs were assumed to be US$162.4 million, the discount rate 11 percent in soles and the benefit of Project implementation USD$4.45 million. The actual project cost was USD$164 million, (USD$13 million World Bank financed, USD$15 million IADB financed and USD$138 million GOP financed). The benefits were estimated applying the methodology of Quality Adjusted Life Years (QUALY). Measuring benefits through QUALY’s not only measures the number of years gained due to loss of mortality but also as a result of the decrease in chronic or temporary incapacity due to chronic illnesses.22 The method considered the following effectiveness indicators: the number of avoided deaths; the number of avoided disease cases and the number of days that an individual is prevented from of being ill due to the project effects. Chart 2 includes some of the main health benefits assumed and quantified from project implementation.
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In order to evaluate the study’s assumptions we compared (when possible) the actual change in indicators impacted by the targeted interventions. The interventions used in the FS study for applying the QUALY methodology (and for which a reduction in deaths or cases is assumed) are similar to those targeted in the Project. Generally the assumptions regarding health improvements (and years of life gained due to reduction in deaths and incapacities) were reflected in health improvements in the Project regions though the actual number of death avoided/cases is difficult to compare. The largest benefits (in economic terms) from the interventions assumed in the study stem from the leading causes of maternal and infant mortality (hemorrhages and preeclampsia/eclampsia, and delayed fetal growth, fetal malnutrition, short gestations and low birth rate, respectively), since one year of premature death is the equivalent of one year of healthy life lost (see Table 2).
Table 2: Feasibility Study Calculated Benefits
Source: FS Module IV: Evaluation
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The FS assumed project interventions would result in a reduction in maternal death cases, from 321 cases if the project was implemented to 237 without the project (difference of 84).23 The actual decrease in maternal deaths in the Project areas was of 75 women between 2007 and 2015.24 A FS-assumed reduction in anemia cases was reflected in an actual reduction of anemia among children under the age of 5 in the nine project regions (PDO 2) from 69.5 percent (2005) to 57.3 percent (December 2014) and among pregnant women in the same area (PDO 4) from 41.5 percent (2005) to 36.4 percent (2014).25 The availability of iron/folic acid supplements during Project implementation in the targeted regions also suggests that the use of iron/folic acid supplements increased with Project implementation (as indicated in the FS study) thereby boosting maternal nutrition (with associated impacts on infant deaths).
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The FS study assumed a significant reduction in infant deaths with a high associated monetary benefit due to the prevention of considerable years of healthy life lost. The main targeted interventions (which are the main causes of infant mortality) are related to the diagnosis and treatment of asphyxia, sepsis, prematurity, low birthrate, neonatal hospitalization and postpartum control. The projected number of deaths avoided according to the FS due to various interventions ranged from 24,200 without the Project to 28,531 if the Project was implemented (difference of 4331). Though the Project did not measure infant mortality, one of the Project PDO indicators (PDO indicator 5) measured the hospital lethality rate among neonates in the nine selected Regions, which fell from 9.5 percent (2005) to 5 percent (2014). The under-5 mortality rate (per 1,000 live births) in Peru fell from 22.1 in 2009 to 16.9 in 2015, also displaying a downward trend.26 In addition to the interventions targeted, the project also lowered chronic malnutrition in children under 5 from 36.6 percent of the Project population to 23.7 percent. This was supported by an increase in exclusive breastfeeding in children under 6 months from 79.7 percent to 87 percent and in hand washing (for mothers) from 36.3 percent to 44.1 percent (project data). These interventions support the prevention of diarrhea, pneumonia, and respiratory diseases, all common causes of child illnesses.
Comparison among regions
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An experimental approach comparing the regions with and without Project intervention reveal substantial effectiveness due to favorable results in Project implemented regions. The fall in malnutrition and maternal mortality were greater in the Project regions than in the non-project regions. This is particularly significant when one takes into account the lag in health service demand in the project regions, partly due to the associated service access difficulties. A study prepared by the GOP revealed that (pre-project) only 57 percent of the poorest quintile had physical access to the obstetric network less than 2 hours from their residence.27.
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Malnutrition fell 12.8 percentage points in the project areas, compared to 6.9 percentage points in the non-project regions. The fall in the project areas narrowed the gap between the project and national averages from 12.8 percent in 2009 to 9.1 percent in 2014. Decreases in the rural project areas (13.5 percent) were significantly higher than in urban areas (7.9 percentage points). Furthermore, as hoped, the fall in malnutrition was higher for the lower income quintile (14.5 for quintile 1 and 16.7 for quintile 2 compared to no change in the superior quintile) 
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Malnutrition and infant mortality outcomes were driven by a number of improvements in interventions supported by the project. The proportion of exclusively breastfeed children in the project areas increased 7.3 percentage points while remaining practically the same in the non-project areas. However, in the project areas the increase was driven by the urban and higher quintile population (since approximately 90 percent of the lower quintile already exclusively breastfeed). Changes measuring the prevalence of anemia and EDA (extreme diarrhea) in children under 3 for the years 2009-2014 were similar for project and non-project areas. Both project and non-project areas experienced an increase in hand washing, 7.8 percentage points and 11.4 percentage points respectively, supporting a reduction in diarrhea and other illnesses. In the Project areas the increase was higher in the rural and lower income quintile populations. The proportion of children under 3 with health child appointment (control de crecimiento y desarollo – CRED) increased significantly in both the project areas and nationally.
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Maternal mortality in the project areas fell by 38 percent between 2007 and 2015, compared with a 28 percent drop in the non-project areas suggesting that the project had an important impact. This is particularly true when comparing the more difficult terrain and poorer access to services, in project versus non-project areas. The proportion of institutional births in Peru, a proxy for maternal mortality, increased 13.3 in the project areas, 16.3 in the non-project areas and 14.3 nationally between 2009 and 2014. The increase was most marked in rural project areas (13.3 percent increase) and in the lower income quintile (16.2 percent for quintile 1 and 14.5 percent for 2). The proportion of rural pregnant women that have an appointment within the first trimester increased for both groups. Though the neonatal mortality did not reach the target for 2014 of 3.8 it decreased slightly from 5.6 in 2009 to 5.02 in 2014.
Fiscal Impact and Sustainability
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The fiscal impact of the project was marginal limiting any sustainability concerns. As identified during project preparation and as revealed in Table 3 project implementation did not have a major impact on the MINSA budget, as it weighed an average of 0.08 percent throughout the period analyzed.
Table 3: Project Financial and Sustainability Analysis
Source: World Bank DataBank, at 2010 constant price
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