Aid Effectiveness in Peru: How a bottom-up health reform model strengthens organizational and management structures to effectively utilize national and donor resources

Health systems reform is needed to strengthen the organizational and management structures that contribute to more efficient and effective utilization of donor support. In the case of Peru, bottom-up reform promotes direct citizen participation to improve accountability and transparency, modifications in public financial management that promote efficiency and reduce corruption, and implementation of results-based budgeting through the Shared Administration Program. This program was initiated on a small scale in 1994 and currently covers one-third of Ministry of Health (MOH) primary health care (PHC) services. It is now a permanent feature of health reform with a new law on “Co-management and citizen participation in PHC facilities of the MOH and the Regions”. Community non-profit associations called “Comunidades Locales de Administración de Salud” (CLAS) co-manage government funds to administer PHC services. This in effect is public-private collaborative management.

The CLAS model illustrates the Seed-Scale approach (developed by Future Generations) which itself reflects the development paradigm envisioned by the Paris Declaration, whereby outside change agents (experts, NGOs, universities, donor agencies, etc) catalyze sustainable development by empowering communities to engage in partnerships with government, while strengthening government health services to work in reciprocal fashion with communities for more effective and efficient channeling of resources.

A hybrid public-private management model, CLAS utilizes public funds primarily from the national health budget but also mobilizes resources from municipalities, other public entities, and external donors to meet health sector goals, with community members involved in planning, purchasing, contracting, and oversight with transparency and efficiency. Donor funding can support public insurance schemes that channel reimbursements or per capita payments through the government system to decentralized public service delivery facilities. For example, CLAS receive reimbursements from the Integrated Health Insurance (SIS) program for poor mothers and children. Due to SIS, CLAS achieve nearly twice the coverage of key MCH services as compared to non-CLAS primary care services which are partially and indirectly reimbursed by SIS.

Donor funding should support the provision of technical assistance by change agents such as NGOs and universities for capacity building in new roles for government and communities for more effective and transparent public services.