The Health Sector Strengthening and Modernization Project consolidates a health sector modernization process launched in 1993, with support from an earlier World Bank-financed project.  The new project will continue that support by financing measures to increase the capacity of government institutions to regulate health care providers to control quality, as well as purchase and distribute pharmaceuticals. It will also help to strengthen hospital management, increase ambulatory care, extend health services to low-income areas, and introduce a formula-based plan to ensure that hospitals and local health centers receive the staff and equipment they need to meet local demands for health care.  

"Costa Ricans enjoy the highest life expectancy and lowest infant mortality in Latin America," said Maria-Luisa Escobar, the World Bank's project manager.  "This project will protect and build on this accomplishment, by ensuring that they have continued access to high-quality health care that is delivered efficiently at an affordable price."

Although Costa Rica's health system has a record of significant achievement, the government plans further improvements to guarantee that the quality of care provided is of comparable quality across the country.  As the Caja Costarricense de Seguro Social (CCSS) purchases health care services from decentralized health units, and possibly others, it is critical that all health service providers have clear performance guidelines that are properly monitored.  The CCSS also plans to upgrade its information systems to implement reforms in revenue collection, billing, purchasing, and allocation of expenditures.

The project will benefit four million Costa Ricans whose health care services are managed by the CCSS and regulated by the Ministry of Health, by improving the quality and equity of these services, reducing wait times, and delivering easier access to needed pharmaceuticals.

"Costa Rica's innovative health system modernization strategy will offer valuable lessons to other countries in Latin America," said Donna Dowsett-Coirolo, Director of the World Bank's program in Central America.  "The World Bank is honored to be a partner in this initiative."

The fixed-spread loan on IBRD terms, to be disbursed over six years, matures in 15 years with seven years of grace.