Ukraine Health Reform Project The following is the initial proposal for the Bank support to the Ukraine health reform program.  This needs to be confirmed during the proposed pre-identification mission. The objective of the program would be to support the Government reforms to improve access to, financial viability and quality of health care.  These are in line with the key objectives for the EC in health sector. The Government has come up with two strategic directions: strengthen primary health care system through an institution of a family doctor  as the first line essential health care service; and, health financing reform (also dubbed as health insurance). Implementation of these reforms require significant changes of laws and regulations, financial instruments, new institutional capacities and skills.  MOH.s ability to carry out the key stewardship functions of policy analysis and development, monitoring and evaluation, reform advocacy, etc. is a cross-cutting issue.    The objectives are in addition to the objective of HIV/AIDS project that focuses on a specific public health challenge.  The HIV/AIDS project does not address the key structural issues of health care delivery system that are the focus of policy dialogue under PAL.    The proposed project would complement policy dialogue, identification of feasible policy options, designing main framework regulations under the PAL health components and help to ensure adequate institutional capacity to implement these reforms, upfront investments into new skills and systems, activities to ensure the buy-in by stakeholders and produce first successful experiences. The project would provide incremental resources to accelerate implementation of reforms.  The design of operation would focus on (could comprise project components):    PHC reform: fill the institutional gaps (training capacity in faculties of family medicine, quality assurance systems, financial instruments); provide incremental resources to accelerate training and infrastructure restructuring needs.   Possible inputs TA, training, training aids, basic medical equipment and IT equipment, civil works.  Outputs:  internationally comparable training capacity in key training institutions . staff, curriculum, training materials, number of PHC providers trained, practice guidelines developed and disseminated, infrastructure optimized and upgraded in mostly rural areas, on pilot basis urban setting.    Health financing reform: support upfront investments needed to build institutional capacity at national level and perhaps on pilot basis a complete system in a pilot region (organizational structure, skills, management systems, by-laws) to move to needs based regional allocation of resources and performance based financing of health care institutions.  Inputs: TA, training, IT systems.  Outputs:  operational institutions financing health care providers in a reformed way.    Health system optimization: support first cases of hospital optimization under the new enabling environment to be best practices for replication.  Inputs: TA, training, IT, medical equipment, civil works (no new construction), support to retrenchment. Outputs: significantly improved hospital performance of a targeted catchment area in terms of efficiency and management.    MOH stewardship function: support to develop appropriate skills and structures under reforms, most likely focusing on analytical, monitoring-surveillance,  policy making and supervision/governance functions of the MOH.  Inputs: TA, training, IT systems.    The key outcomes would be improved uptake of essential health services and reduction of differences in access among different socio-economic groups; evidence of improved sustainability of health services finance (benefits better defined and costed) and delivery (no arrears, capacity and performance indicators closer to international benchmarks), improvement in health outcomes that are amenable by health system performance (e.g. under5 mortality), improved perception of public perception of key health reform components . PHC and health financing.