Since 21 November 2019, pursuant to Resolution 520 of the Government of Georgia, tariffs on high-tech and costly medical services, such as cardiology, cardiac surgery, arrhythmology and reanimation services, have been equalised as part of the Universal Healthcare Programme.

The decrease/equalisation of tariffs on costly medical services will temporarily put a cap on the Universal Healthcare Programme’s expenses. However, Resolution 520 might threaten the development of the high-tech cardiology field. In addition, the aforementioned change cannot ensure the reduction of the population’s healthcare expenses and their affordability of quality healthcare.

Medical establishments state that the tariffs set by Resolution 520 are less than the cost of the medical services. They add that a discussion on tariffs has not taken place either with the sectoral association or with the clinics. Medical establishments demand a revision of the set tariffs and otherwise, they clarify, a deterioration of medical service quality and a drainage of highly qualified personnel going abroad would be inevitable.

Different prices on this or that medical service are stipulated by the quality of medical care and the qualification of medical personnel. Therefore, the imposition of a single tariff for all clinics is not appropriate. However, clinics are protesting against a tariff reduction and not against a tariff equalisation. An open letter, authored by the clinics, reads that for instance, in the case of arrythmology, the cost of implanting a device is higher as compared to the set tariff. It is logical that reduced tariffs endanger the development of the cardiology field. Clinics will try to decrease expenses which would be directly reflected on the quality of medical care.

As clarified by the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia, the set tariffs do not envision expenses for such services which are not stipulated by a medical emergency (selection of a particular doctor, VIP room, etc.) because the Universal Healthcare Programme does not provide funding to them. Most probably, clinics will increase tariffs for such services which are paid out of the patients’ own pockets.

The Minister of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs, Ekaterine Tikaradze, stated that it is unacceptable for her to look at healthcare as a profitable business.

If we do not consider the healthcare market in the country as a profitable business, then, at least, there would be no technological development of the field and it would be impossible to attract or/and keep highly qualified personnel.

Challenges of the Universal Healthcare Programme

After six years since launching the Universal Healthcare Programme, one of its biggest challenges still remains the management of its expenses. The statistical data of the previous year indicate that the government is unable to cap the expenses of the Universal Healthcare Programme. The government’s planned budget increases annually, although every year it is running a deficit (see FactCheck’s article).

This year, the Universal Healthcare Programme’s expenses have already exceeded the annual budget. In 2019, funding for the Universal Healthcare Programme was GEL 754 million whilst according the State Treasury’s operative data on 12 December 2019, the expenses of the Universal Healthcare Programme amounted to GEL 757.6 million. The government has accumulated debt of the clinics. The clinics say that the money they receive as part of the Universal Healthcare Programme comes with five-to-six month delay.

By equalising the tariffs, the government seeks to cap the expenses of the Universal Healthcare Programme; however, this change, as mentioned previously, provides new challenges in the healthcare sector.

Of note is that in order to minimise expenses, important changes were enacted in the Universal Healthcare Programme in 2017 and differentiated health insurance packages, based on income, have been introduced (see FactCheck’s article). However, it was not enough to cap the Universal Healthcare Programme’s growing expenses.

The launch of the Universal Healthcare Programme marked two important changes in the healthcare policy: first, a universal principle replaced a target principle and second, the funding rule was altered. Until 2013, state health insurance programmes were run by private insurance companies and the Social Service Agency is the one which runs the Universal Healthcare Programme. The government provides direct funding to the Universal Healthcare Programme and, therefore, financial risks associated with insurance are on state budget, too. It is a fact that the government is unable to manage the programme’s expenses.

Population’s Healthcare Expenditures

The Universal Healthcare Programme failed to reduce the population’s healthcare expenditures which points to its inefficiency.

In accordance with the 2017 National Health Report, the population still pays 55% of their healthcare expenditures out of their own pockets. In 2012-2017, the share of out-of-pocket payments in the total healthcare expenditures dropped significantly, although this was stipulated not by but by increased government funding for healthcare and not the decreased expenses of the population.

UNICEF’s population welfare reports show that the population’s healthcare expenditures have increased which is largely stipulated by increased prices on medication. In addition, the number of those households with a catastrophic health expenditure rate has also increased.

In 2017, the population’s healthcare expenditures increased by 16.4% on average as compared to 2015. In 2015, the population’s healthcare expenditures increased by 31% as compared to 2013.

Equalised tariffs on medical services cannot reduce the population’s healthcare expenses. Most likely, prices will increase on those medical services which are beyond the scope of Resolution 520. In addition, given the growth of prices on medication which occupies a large portion in healthcare expenses, it is possible to assume that the population’s healthcare expenses will increase further.