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The Health Financing and Primary Health Care Development Project implementation was initiated in September 1997 when a loan agreement between the Republic of Armenia and the World Bank was signed. The project, which was elaborated by a national group of experts working at the Ministry of Health and in consultancy with World Bank specialists, comprises two main components, aiming to make health care more effective, efficient, accessible and equitable:
  • Strengthening Primary Health Care
  • Strengthening Health Financing System

Under the World Bank supported first health project (1998-2003) eighty-one community micro projects have been implemented which was a considerable input in reforming and modernizing the rural primary health care system of Armenia. Particularly, ambulatories were renovated or newly constructed, provided with ambulance cars, equipped with necessary and up-to-date equipment. Armenia has also developed, published and distributed practical guidelines for family doctors (127 guidelines) and family medicine nurses (56 guidelines). The health care financing agency has introduced capitation based financing system and rewards more extensive PHC provision by newly qualified family doctors with higher rates.

The Health System Modernization Project (HSMP) was a two phased Adaptable Lending Program (APL) to be implemented over a period of approximately ten years. The rationale behind the HSMP was to support the reform of the health sector in Armenia in three main areas: development of primary health care, hospital optimization and modernization and strengthening of the government institutional capacities.

The first phase (APL1 - Credit Agreement # 3920-AM and PHRD Grant Agreement # 053436 TF) started in December 2004 and ended in June 2010. The second phase (APL2) of the project - the Health System Modernization Project 2 (APL2, Credit Agreement # 4267-AM) started in June 2007 and was completed in December 2012. The Additional financing to the APL2 Project (Loan Agreement # 7987-AM) approved by the World Bank Board of Executive Directors on December 21, 2010 is expected to end in December 2014.

The development objective of the Phase 2 Project was to strengthen the MoH's capacity for more effective system governance, scaling up family medicine-based primary health care and upgrading selected healthcare service delivery networks in marzes to provide more accessible, quality and sustainable health care services to the population.

The program continued supporting the GoA to: (i) complete the family medicine based PHC reform that was launched in 1996 so to ensure that every Armenian citizen and legal resident will have access to a qualified and well motivated family doctor and nurse of his/her choice; (ii) consolidate the hospital sector to minimize waste of scarce resources and improve quality of care; and (iii) strengthen GoA's competencies for effective stewardship in policy making, regulation, oversight and public accountability ensure effective and targeted use of public resources in accordance with the health and healthcare needs of the population, especially the poor.

The Additional Financing project to Health System Modernization Project APL 2 finances the costs associated with financing gap for ongoing activities under APL 2 as well as to scale up activities. The aim of the Additional Financing project is quicker transition to family medicine based PHC, completion of the marz hospital modernization process and further institutional strengthening of the system.

Below are presented the completed activities by Project Components.

Family Medicine Development Component

The goal of this component is retraining of the currently practicing PHC providers in family medicine and strengthening of PHC infrastructure in order to complete the transition phase of moving the PHC system from current ambulatory-polyclinic system to family medicine practice. The total number of reconstructed and newly constructed ambulatories/health centers and family medicine offices amounted 147 as of 2012, implemented country-wide within the credit projects during 2000-2012, 68 of which were reconstructed and 79 constructed (including family medicine offices in Syunik Marz), as well as all rural ambulatories were provided with standard sets of medical equipment, medical furniture and IT equipment. Re-training of family physicians and nurses within WB health projects was completed in March 2012. During 2000-2012 years totally 1655 family physicians and 1770 family nurses were retrained.

Hospital Network Optimization Component

Hospital Network Optimization Component intends to support the optimization of selected hospital networks in Yerevan and in the regions. Three of the Yerevan hospital mergers-namely "Yerevan State Medical University Hospitals", Surb Grigor Lusavorich" and "Surb Astvatsamayr" have been included in the scope of the APL-I "Health System Modernization Project (loan agreement N# 3920AM). During 2002-2007 the following project activities have been carried out in the scope of the mentioned project in Yerevan city: Civil works of renovation of maternity hospital of "Surb Grigor Lusavorich" MC and construction of a new boiler unit for heating of both hospital and polyclinic buildings were carried out. Civil works in "Surb Astvatsamayr" Medical Center related to re-location of services from hospital #6, as well as in maternity hospital related to consolidation of obstetrics and gynecology services were carried out as well. All three mergers were provided with essential medical equipment for diagnostic imaging, laboratory services, operating theatres, intensive care unit, functional diagnostics and computer equipment, the project hospital staffs were trained on HCWM. In 2005 in the scope of the APL-I "Health System Modernization Project regional optimization initiatives were undertaken through development of general master-plans of regional health care delivery systems, which were approved by the Government on November 2006 by decree of Government #1911-N on optimization of the marz health care delivery systems. Marz Medical Centers were created by merging the hospitals, policlinics and maternity hospitals.In the scope of APL-I Ijevan and Hrazdan Medical Centers of Tavush and Kotayk Marzes were renovated and provided with medical equipment and furniture. During 2008-2012 in the scope of the HSMP APL-2 (loan agreement N# 4267 AM) the following activities were performed.

Renovation of Armavir MC of Armavir marz, Ararat MC of Ararat marz, Aparan MC of the Aragatsotn Marz, renovation of Goris MC with construction of extension in Syunik marz and renovation of Gavar MC with costruction of extension in Gegharkunik Marz were completed, all mentioned medical centers were provided by modern medical equipment and furniture. In the scope of APL-2 Gyumri new Medical Center was constructed and put into operation on September 4, 2012. In the scope of Additional Financing to Armenia Health System Modernization APL 2 Project (loan agreement # 7987-AM) the following activities were performed.

Full reconstruction of mortuary for Aparan MC, as well as construction of new mortuary and renovation of Infectious Diseases Sub-building for Gavar MC were completed. The Gyumri MC was provided with modern medical equipment, medical supplies and furniture.

The following project activities are planned under the Additional Financing to Armenia Health System Modernization APL 2 Project (loan agreement # 7987-AM)

During 2012-2014 within the frame of the project Kapan MC of Syunik marz, Abovyan MC of Kotayk marz, Berd MC of Tavush marz , as well the policlinic part of hospital sub-building of Alaverdi MC will be renovated. A new medical center will be constructed in Megri region of Syunik marz. All medical centers included in the project will be provided with modern medical equipment, medical supplies and furniture.

Institutional Development Component

Institutional Development Component aims to strengthen capacity of the Ministry of Health of RA and its key agencies to perform its major functions of policy development and implementation monitoring, regulation and oversight of the health sector. In the framework of Health System Modernization Project 2 (APL2) Health Policy Development and Health System Performance Assessment was implemented, mainly Health System Performance Assessment for the years 2007 and 2009(C1) and National Health Accounts for the years 2004, 2005, 2006, 2007, 2008, 2009 were developed.Within the framework of component activities Strengthening of Regulatory, Oversight and Management Functions were carried out, through further revision and improvement of health legislation, as well as strengthening of State Health Agency capacities to use efficiently public funds for procurement of health care services, and supporting the reforms for the undergraduate and continuous medical education system.


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