Origin and Scope of the Health Programme
In the last 20 years, China reform process involved, among others, the health sector and transformed the existing system, based on free services for all, into a user-pay based system.
The reform of the health sector determined radical changes in functioning and financing of the health system: public participation in financing medical expenditures has been decreasing and the management of the sector has been progressively decentralized leading to a cost increase for end-users and to a reduction in terms of public access to services, which also caused a widening of the gap between poor rural areas and rich urban centres.
The rural and district hospitals of the least developed areas in China face general backwardness of basic biomedical equipment, inadequate clinic, managerial and organizational skills as well as considerable pressures in terms of financial and economical sustainability. The main problems in the health sector to be tackled concern imbalanced provision of sanitary services between rural and urban areas and between 1st and 3rd level hospitals, shortage of adequate basic equipment and general technological backwardness, scarcity professional skills of medical, paramedical and not medical staff, high cost of medical services comparing with the average income per family in rural areas,serious disproportion between the quality of the services provided in 3rd level hospitals and services provided at lower levels.
Reaffirming the need expressed by the Government of People’s Republic of China to continue to implement the health system reform in order to provide a universal and sustainable access to health care, effective and affordable to the poor people, and considering the “Record of Talks Concerning the Perspectives of the Sino–Italian Soft Loan Development Cooperation 2003-2005” finalized and signed in Beijing on July the 9th, 2003 outlining an agreed strategy for the Sino–Italian Soft Loan Development Cooperation in the period 2004 – 2006, the Programme “Support to the Chinese County and District Hospitals of Western and Middle Provinces” was established.

Programme Objectives
The General Objective of the Programme is to contribute to the improvement of Chinese people’s health conditions through the strengthening of sanitary services provided by hospitals at county and district level in disadvantaged provinces.
The Specific Objective of the Programme is to contribute to improve diagnostic and therapeutic skills in about 20 hospitals at county and district level in the Central and Western provinces with particular focus on Jiangxi, Guizhou and Ningxia Provinces.

Programme Expected Results
The main expected results are the following:

• decrease of mortality and morbidity rates in hospitals due to “acute course” pathologies,
• more timeliness in diagnosis and care,
• maintained stationery tariffs list,
• better management of resources
• reduced gap between 3rd level hospitals and 2nd level hospitals

It is expected to produce a various range of benefits including a general improvement of sanitary conditions, life expectancy and living quality standards among target populations, with service provision prices and costs impact on users’ income remaining equal.

Project Activities
Supply of goods
Providing equipment for:

• outpatients departments and laboratories (internal medicine, surgery, paediatrics, cardiology etc.)
• diagnostics (x rays, ultrasound)
• operating rooms (anaesthesia, instruments, operating tables etc.)
• inpatient departments (beds and bedside-tables, chairs, wardrobes, etc.)
• first-aid departments

Supply of services
Providing technical assistance and training:
Technical: on the basis of the purchased equipment

• ordinary maintenance
• bio-security
• storage management
• rational utilization of equipment, etc.

Clinical:

• introduction of diagnostic and therapeutic protocols
• preventive medicine procedures, etc.

In the field of management:

• organisations of pre- and intra-hospital services
• information systems
• standardisation of procedures
• system of reference and feedback with the local health network and community
• computer technologies, internet
• tariffs management and reduction of non-productive outlays etc.

Environmental impact control of depreciated equipment proceeding

Financing
The Government of Italy will provide the Soft Loan to the Government of the People’s Republic of China on the following conditions:

• Repayment period: 23 years (including 11 years of grace period)
• Grace period: 11 years
• Interest rate: 0.15% (payable at the end of each period of 6 month from the date of the first disbursement).

Every hospital may consider purchasing of equipment, furniture and related services from a minimum amount of Euro 500.000,00 (five hundred thousand) to a maximum amount of Euro 2.000.000,00 (two millions).
Eligibility
Initiatives may be submitted by County or District Hospitals, supported by local MOF and Local Health Bureaus, and located in Central and Western Provinces preferably in the Provinces of Ningxia, Guizhou and Jiangxi.
For the selection of eligible initiatives, the following criteria will be followed:

• Initiatives aimed at reinforcement of preventive, diagnostic and therapeutic services of county and district hospitals, as well as providing health education, in particular utilizing “cascade” scheme of training and furnishing health education to the target population.
• Initiatives introducing scientifically proven technologies.
• Initiatives where an expertise is required, mainly in those sectors where Italy offers highly qualified professional and material resources.
• Initiatives with sound social and economic impact on local development.
• Initiatives that are in line with the strategy of the Italian Cooperation for the health sector and enter into the context of the Programmes already implemented with the support of the Italian Cooperation.
• Initiatives that are in line with the National strategy for the health sector.
• Initiatives aimed at upgrading technical and/or professional and/or managerial capacity of hospital.
• Initiatives that guarantee long-term sustainability, including ownership by beneficiaries; national policy support/consistency; institutional management capacity; economic and financial viability; durable benefits to disadvantage groups.
• Initiatives with demonstrated quality project management.

Procurement
The Soft Loan shall be used to purchase goods and services related to the Programme, which must be of Italian origin; no more than 30% of the Soft Loan may be used to purchase equipments and related services in China.
The contracts shall be awarded to Italian Companies through competitive tenders.
For further information please see the Procurement part.