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“Without PRONICASS and this reform process, we would likely be stuck where we always have been. All our budgeting was based on past spending, we didn’t work toward goals or target results. It was a nightmare.”
—Ministry of Health Central Office Official

The Case of Nicaragua

Leadership & Management Development, Institutional Reform, and Budgeting for Results Across Social Sectors

The Case of Nicaragua

Clients at a MiFamilia center in Managua. Photo by Michael Paydos, 2006.

A study by MetrixGlobal LLC, a U.S.-based consulting firm, showed that for every dollar spent on leadership development within a corporation, nearly eight dollars were returned on that investment. A similar return has been shown in the delivery of health services as well. Whether talking about the central level of the Ministry of Health (MOH) or a community health post, effective leadership makes a difference. MSH has years of experience linking improved leadership and management to improved health results. At MSH, we believe leadership is about achieving results. What about other social sectors, such as education? The keys to social sector activities are delivering services, using resources effectively, improving lives, and achieving sustainable results. In contexts such as Nicaragua, the challenges are similar: shortages of quality human resources, funds, access, and awareness of existing services. The objective of this paper is to show how strong management and leadership practices, institutional reform, and results-based planning and budgeting are the pathway to effective service delivery across the social sectors.

 

Managua, Nicaragua. In 1990, Nicaragua embarked on a rebuilding effort. Despite significant progress, the Central American country of 5.5 million people remains one of the poorest in the Western Hemisphere. Nearly three quarters of the population lives on less than $2 per day. And although the national government has increased education expenditures, fewer than half of Nicaraguan children will finish primary school. Mortality and morbidity among women and children from preventable diseases remain high and public investments in the health sector—while steadily increasing—are inadequate. Insufficient social services are an obstacle to development and economic growth. Effective social sector management increases the economic and social capacity of citizens. Without a comprehensive approach to improving all social sector services, individual results in health or education may be short-lived. For the families of Nicaragua, access to quality health, education, and other social services are critical in their lives.

The objective of this paper is to detail MSH’s partnership with the public sector of Nicaragua in developing management and leadership capacity, strengthening systems monitoring capacity, and modernizing the planning and budgeting systems of public sector offices. As a result of this work, critical social sectors are now planning and budgeting for results at the local level.

"The leadership program significantly improved our teamwork, especially the relationships between the different offices. Before, we often had feuds between the different groups, and everyone would work independently from the others. Now things are more coordinated.”

—Nidia Icaza, Ministry of Health

The Leadership Development Program (LDP) was launched in 2001 under MSH’s USAID-funded Management and Leadership (M&L) Program in collaboration with the MOH and the PROSALUD Project. Intended to strengthen the capacity of health managers and personnel at the municipal and SILAIS levels, the LDP was designed to complement PROSALUD’s Fully Functional Service Delivery Point strategy which includes criteria for improving, monitoring, and evaluating participating health units. The LDP helped develop leadership skills such as communication, negotiation, prioritization, and systemic thinking in managers and health workers. The program was subsequently expanded to the central MOH. Implemented in phases from 2001 to 2005, the LDP scaled up to involve 63 municipalities, seven SILAIS, and the central level MOH. The program trained 2,053 managers and health workers at all the levels, while developing a network of 550 facilitators. The MOH has institutionalized the LDP curriculum, making leadership development a part of the ministry’s employee training and development.

Management & Leadership Development

Leadership and management is a critical pathway to solving challenges in the social sectors. MSH has partnered with USAID and multiple public- and private-sector institutions in Nicaragua since 1994. In 1994, MSH launched the Decentralized Health Services Project, a management development program designed to increase the capacity of the MOH to ensure quality of services and monitor performance in facilities. Since then, MSH’s partnership has grown to include multiple social sectors, including education and family welfare, working at all levels of these sectors—the community, municipal and departmental (SILAIS), and central. In addition to public sector institutions, MSH is working with local hospitals, faith-based organizations, and nongovernmental organizations to increase sustainability, foster leader-ship at all levels, and improve institutional efficiency. So how does a health management program lead to nationwide reform in the social sector and change in practices, attitudes, processes, and systems?

Developing Fully Functional Service Delivery Points

In 2001, MSH and the MOH embarked on an effort to develop “Fully Functional Service Delivery Points,” or AMAS (Abordaje para Mejorar la Atención en Salud or “approach to improve primary health care”) using a systems-based process. AMAS was first developed under the PROSALUD project, implemented by MSH with MOH counterparts in 12 municipalities (of 153). The Ministry used this approach to develop a comprehensive health unit monitoring approach. Managers use AMAS to improve management practices at the health facility level. AMAS guides managers in planning, organizing, and monitoring services at their health units. AMAS offers managers a means to view the entire service delivery process, helping them to make good decisions about staff, resources, and client care. By the end of 2004, the Ministry realized notable increases in the quality and coverage of maternal and child health services throughout the country. The Ministry of Health has scaled up the application of AMAS to over 60 percent of the 1,000 primary health facilities without MSH project funding or support.

Key to the success of AMAS is its participatory approach, involving dialogue among decision-makers and health care providers at all levels. It is a practical approach developed at the service delivery level through trial and error over several years.

Modernizing the Health Sector

The Ministry of Health has made great gains in recent years. It is responsible for more than 1,000 health centers and health posts, 32 full-service hospitals, and 30,000 employees. The Ministry’s facilities serve more than 13 million outpatients per year and it controls a budget of US$182 million per year, including loans.

Throughout the world, many ministries of health (and other public sector institutions) face challenges in the way they’re organized. While the staff are often capable and dedicated, large, centrally oriented bureaucracies slow down the decision-making process and taking action, hinder efficient use of resources, create competing institutional units, and often produce a culture without accountability.

The Role of MSH: Since 2005, MSH has provided technical support to three social sector ministries—Health, Education, and Family Welfare—and other public and private sector institutions in restructuring their operations for increased efficiency and to facilitate decentralization of authority for service delivery to the municipal level. The primary feature of this restructuring was recognizing that all results achieved or not realized are determined by the inputs and processes used. Applying a holistic, systems approach, the MOH and MSH identified how administrative and service delivery processes should work, ignoring how the often-broken systems operate. Using this approach, existing inputs and processes were mapped, then streamlined or rationalized to improve efficiency and more importantly to allocate human and financial resources more effectively to achieve planned results. This support has been provided by the USAID-funded Nicaragua Social Sector Reform Program (PRONICASS).

Community leaders from MSH's Community Leadership Development Program in Waslala. Photo by Michael Paydos.

What Results Have Been Achieved?
The Ministry of Health and MSH worked toward realigning the nation’s health goals. Tools were developed to assist managers in planning for results, and a top-down approach was taken to preparing Ministry staff for the shift. Through working with the top levels, PRONICASS was able to secure widespread buy-in and support for the reforms. These reforms resulted in an increase in resources and capacities with the working teams closest to the point of service delivery.

As the initial stages of the modernization process at the Ministry of Health came to a close, similar processes were proposed by USAID and the Government of Nicaragua and approved for other social sectors, particularly in education and family welfare. MSH staff, consultants, and staff at the Ministry of Health involved in the initial modernization process took part in getting these new initiatives running.

Achieving Organizational Reform - Additional information on the MSH process and results in each Ministry. (PDF 140KB) 

Ministry of Family Welfare (MiFamilia)

In just one year, MiFamilia has gone from having 80 percent of its funds spent at the central level to 80 percent being budgeted for expenditure in 2007 at the local level.
MiFamilia is the general family welfare institution in Nicaragua. Faced with many of the same challenges as the MOH, MiFamilia also engaged in an institutional reform process upon seeing the initial success in the health sector. Several MOH staff well-versed in the approach were invited to help apply it to MiFamilia. A consultant working with MiFamilia explained that “We’ve already seen a shift to more resources going to technicians placed at the local level who are more interested in doing their work well.”

Ministry of Education

The Nicaraguan Ministry of Education (MOE) is responsible for 7,000 schools, 1.5 million students (65% of all school-aged children), 40,000 employees, and an annual budget of approximately $175 million. The Ministry has recently undergone a major reorganization where the majority of its budget is no longer tightly controlled by the central office. Marta Palacio, the Director of Institutional Reform at the Ministry of Education: “What has happened is now the schools directly manage their own resources to handle payroll and other expenditures. The ministry only provides general oversight now. This puts the money closest to the communities and in the hands of those with the most knowledge of the communities’ needs.”

MSH provided support in management and leadership development for the MOE to assist it in its reform process. Marta explains that “this reform process is improving the provision of services not only to families but also the community at large. Local governments now are able to participate in the school planning process. We’ve now developed a comprehensive guide on the planning process with MSH which is being used at the municipal level throughout Nicaragua.”

What Does This Mean for Nicaragua?

The Ministries of Health, Education, and Family Welfare have all committed to preparing a results-based budget for 2009. With a new government in place and a new structure established for the Ministry of Health, the management and leadership systems institutionalized into the Ministry aided in the development of 3,000 new health managers within the system.

To fully provide a good quality of life for its people, Nicaragua—and all countries—must ensure a strong commitment to transparency in its investments and plans, being responsive, strengthening the economy, and working to achieve healthier, better educated people. In order for this to be achieved, strong leadership and management must be present at every level of all sectors. Resources must be allocated where they are most needed—in the communities. And those resources must be tied to the results needed. In addition, these systems must work together to achieve the greatest results for the people. As the members of the Community Leadership Development Program in Waslala stated, “let us walk together so we can grow together.”