Georgia's Health System: Critical Analysis and Reforms

This report provides a comprehensive analysis of the health system in Georgia. It begins with an introduction to the topic, followed by a critical examination of the system's policies, initiatives, and influencing factors, including political, economic, cultural, social, and institutional elements. The report delves into the structure of the Georgian health system, highlighting its key components such as the Ministry of Labour, Health and Social Affairs (MoLHSA), the Ministry of Economic Development, the Ministry of Finance, and other regulatory bodies. The analysis also includes an assessment of past and future reforms, drawing lessons from international models and addressing emerging issues in the region. The report further explores the economic and political contexts impacting the health system, including the impact of economic changes and the role of various governmental and regulatory bodies. The report concludes with an overview of the health status of the population and a discussion of the system's challenges and opportunities.

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Health System: Georgia

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Table of Contents
Introduction......................................................................................................................................3
Task 1: Critical Analysis of Health System of Georgia..................................................................4
Task 2: Analysis of Health System Reforms...................................................................................9
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
This report is prepared for developing understanding and knowledge about health system of
Georgia. For this purpose, the report will focus on critical analysis of health system policies and
initiatives of the selected country. Different factors or elements will be taken into consideration
while accomplishing the critique of health system of Georgia such as political influencing
factors, economic and cultural factors, social factors and the institutional factors. Apart from this,
the report will emphasize on evaluation of future as well as past reforms in the health system of
selected country. It will also facilitate the responses to different emerging issues that are
observed in the selected region.

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Task 1: Critical Analysis of Health System of Georgia
In accordance to definition provided by WHO, health system can be defined as the joint efforts
of different institutions, resources and organizations for promoting the better health of population
residing in country. In this context, the health care system of a country consists of different
components like rehabilitation and care, treatment, secondary and primary prevention, activities
of delivering healthcare services, administrative and management functions, resource generation,
funding etc. In other words, all the activities, resources, institutions, organizations, policies and
human being involved in delivering healthcare services across country are part of health system
of the country. Main purpose of health system of a country is to achieve socio-economic
development of country and well being population residing in it. According to model of ‘System
Building Block’, there are six building blocks that are needed in an effective health system of a
country (Georgia Parliament, 2018). Example of these building blocks involves leadership;
governance; health information system; health financing; drugs & technologies, medicines,
human resources; and the health care service delivery.
The main goal of ‘Health System of Georgia’ is to ensure availability and protection of
fundamental right to health to all citizens of Georgia through creation of an efficient health care
system. The core aim of health system Georgia is also to ensure that population of country can
afford the high quality health care products and services without facing any financial problems.
As per the review of latest stats of Georgia, there is no any shortage of healthcare facilities across
the Georgia. As per the analysis of statistics data of Georgia, it is evidential that charges show
the deteriorating effect on low income families while accessing or availing the necessary services
(Richardson and Berdzuli, 2017). From the analysis of health system of Georgia, it can be

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observed that health expenditure by government of Georgia is very high as compared to other
countries. It is also analyzed from the observation that about 70.9% of the health expenditure by
government is made in the form of out of pocket payments (direct) for healthcare services at the
point of use.
The health system of Georgia is anticipated to highly support the more expensive outpatient
services for both tertiary and secondary hospitals/ healthcare organizations rather than the cost
effective healthcare services. But the health system of Georgia is characterized by low utilization
rate and extensive capability that means overall the current system is showing low productivity
(Sulaberidze et al., 2018). In other words, the country is consisting of a poor regulatory
environment that signifies that in Georgia there is no particular way or technique for
measurement of quality of the care. There are different improvements visible in the healthcare
status of Georgia such as improvement in the maternal and infant mortality rates.
Economic Context:
There was a high standard of living in Georgia prior to the Independence in Soviet Union. After
decoupling from Soviet Union, it has faced the rapid introduction to civil war and market
economy. Due to these situations, the economy of Georgia has faced economic collapse. For
example, the rate of inflation has increased by 1500% in Georgia from 1990 to 1994. At the
same time, value of GDP of the country declined by 68% in same period of time (Chanturidze et
al., 2018). But after 1994, the economic situations of Georgia have started to improve with rapid
pace. For example, the GDP of country has shown growth rate of 8%. At the same time, inflation
rate of country has remained stable. Macro-economic indicators of the economy of Georgia are
shown through below table:

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(Source: Chanturidze et al., 2018)
The economy of Georgia has not impacted by the external shocks like ban of Russia on exports
from Georgia, and rouble crash of 1998. For example, the GDP growth rate of Georgia has
remained as 9.5% in 2006 and 12.3% in 2007. But from the analysis of GINI index of country, it
is evidenced that all the sectors of country were not benefited from this economic growth
(Chanturidze et al., 2018). 25% of GDP of the Georgian economy was contribution of the foreign
investment in 2007 in country. The incidents of poverty percentage in country have fallen 24.6%
in 2004 to 21.3% in 2003.
Political Context:
Until the end of 1991, Georgia was constituent of Soviet Union. This way, the centralized rule of
Moscow was controlling power in Georgia. In 1991, the independence was obtained by this
country. Since then the republican of Georgia has become a country governed by presidential

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democracy. The supreme power in Georgia is president that is elected by elections that are
organized at a period of 5 years. The executive branch of administration in country is headed by
President of country that is supported by cabinet of ministers. These ministers are indirectly or
directly accountable to the president. There are total 150 seats of unicameral parliament that
forms the legislative branch of executives. In contrast to this, the judicial branch of Georgia is
comprised of Supreme Court. The judges of Supreme Court are elected by recommendations of
constitutional court, president or the chair of Supreme Court. On the global corruption index, the
score of Georgia was recorded as 3.9 in 2009. This score is very low. It is so because the score
below level of 10 is perceived as country without presence of corruption.
Health Status:
There are different types of socio-economic situations that have occurred in Georgia and
impacted the health status of people of Georgia negatively such as civil war, economic crisis and
the increasing quantity of IDPs. Due to these issues, the rate of unemployment has also increased
significantly in Georgia after 1990s (Sehngelia et al., 2016). The increased rate of unemployment
has also affected the health status of population of Georgia adversely.
Overview of Health System of Georgia:
In current health system of Georgia the regulatory functions, service delivery functions,
purchasing, and policy making are separated. Following diagram is quite helpful to understand
different elements of health system of Georgia:

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(Source: Chanturidze et al., 2018)
The health system of Georgia is comprised of different departments like ministry of labor health
and social affairs (MoLHSA), ministry of economic development, ministry of finance, ministry
of education and science and the other ministries. The MoLHSA has different types of
accountabilities or roles in the health system of Georgia. Example of these roles includes
ensuring equity and the quality of health care services across country, ensuring health and well
being of population, and to stay as a central actor in social and health issues in country
(Chanturidze et al., 2018). There are different functions that are performed by MoLHSA such as
gathering and developing reports on health statistics of country, maintaining supervision of
enforcement of laws related to health and wellbeing, designing/ drafting laws and regulations for
healthcare, design and implementation of country level health care policies, ascertainment of

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health priorities, providing licenses and permit to different health and well being organizations,
and ensuring proper regulation and control of pharmaceutical markets and healthcare
professionals.
Ministry of economic development (MoED) is also a key player in health system of Georgia. All
the public health care facilities are governed and managed by MoED. MoED also plays the
central role in divesture of healthcare organizations. It has the duty of formulation of facilities for
key processes like auction as well as tendering in the healthcare sector. There are two major roles
of the ministry of finance (i.e. MoF) such as to conduct budget formulation process and to
overview the spending procedures of different ministries in accordance to predesigned plan
(Aliyev, 2014). In context of healthcare sector, the approval is needed from MoF with regards to
composition of benefit packages.
Another important part of the health system of Georgia is HeSPA or Health and Social Programs
Agency. The HeSPA was originally developed in 2007. The roles of administration and
governance of service purchasing are performed by HeSPA in compliance with the State Health
Programs. HeSPA alkso has the responsibility to facilitate annual report on procurement in state
health programs to MoLHSA (Sehngelia et al., 2016). HeSPA will need to approach Ministry of
Justice, MoF, and MoLHSA for obtaining the legal permission, whenever it is planning to
introduce any change in the service purchasing. This is so because such types of changes will
require the budget legislation changes.
MSRA is also an important regulatory body in the overall health system of Georgia. MSRA
stands for medical service regulation agency. The duties and responsibilities of MSRA include
giving permits and issuing licenses to different healthcare facilities and also to issue certification
to different medical professionals. It is also a major function of MSRA to conduct investigation

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of any complaint or complaints received from patients with regards to the quality of medical
services. A Drug Agency was developed by MSRA in year 2008 that is currently known as the
Drug Agency Department. This department has accountability or duty for implementing the state
drug policy in Georgia (Chanturidze et al., 2018). It is also the main duty of Drug Agency
Department to ensure that all the registered pharmaceutical products in Georgia are effectively
meeting different criteria like efficacy, safety and quality. Drug Agency department also has the
responsibility of ensuring that market is free from f counterfeit pharmaceutical products. Final
role of this agency is to ensure that physical conditions in retail pharmacies and manufacturing
units are complied with regulatory standards.
Example of other regulatory authorities in the health system of Georgia includes NCDCPH,
HSPIC, and local authorities. The establishment of NCDCPH was done in 2007 as a result of
merger between Centre for National Disease Control and Medical Statistics and Public Health
department. Core role of NCDCPH is to ensure public health of entire population of country.
HSPIC has responsibility to regulate the loans from donor supported projects and international
financial institutions (Chanturidze et al., 2018). The local authorities in Georgia were enacted in
2005 for performing different roles and duties like promotion of better health, better life style
and the tactics or measures that should be adopted by people for prevention of diseases and
illness.
Task 2: Analysis of Health System Reforms
The government and regulatory bodies under health system of Georgia have learned a lot of
lessons from the international reforms. The health care system of Georgia carries out some of the
features or European values. At the same time, it is more similar to the health system of United
States. Total expenditure by USA on the health care segment is 16% of its total GDP. It is

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highest expenditure in the world. However, the total expenditure on health care is 5.8% of the
GDP of country (Gabritchidze, 2018). These facts and data should be taken into account by the
reformers in Georgia while planning the future reforms. But in reality, it does not happen in the
country. The Georgian reformers state that they will design and have their own “Georgian
Model” for the health system and this will not be the same copy or health system of different
countries like Unites States or other models.
Privatization of Hospitals was a major reform in health system of Georgia. Initially, the political
parties and government have used a strong political effort for the privatization of hospitals across
country in 1990s. But this effort was failed. But gradually with the passage of time, privatization
started to seen in health care sector of country in June 1995. In 1995 to 1996, most of dental
clinics and pharmacies were privatized. In 2007, privatization was approved by Government and
almost of hospitals was sold to private sector (Gotsadze et al., 2015). This was done under State
Hospital development Master Plan. Apart from this, the government also emphasized on
adoption of public private partnership for the development of 100 new hospitals. The adoption of
privatization business model was anticipated to improve the quality of health care service in
country.
Permitting Private Health Insurance was also a major reform in the healthcare sector of Georgia.
The government of Georgia has given regulatory permission and license for health insurance for
the insurance coverage of people living under poverty line. In Georgia, the state united social
insurance fund was abolished. After this, health and social programs agency was created as a
successor agency. The roles and responsibilities of this successor entity were very limited. In this
context, Government of Georgia has planned that in future, only private health insurance
companies will be running for insurance coverage of population under poverty (Gabritchidze,

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2018). But the private insurance market is not efficient in itself. For example, the adverse
selection of causes, morale hazards can result in the market failure.
(Source: Chanturidze et al., 2018)

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Georgia receives major external financial for healthcare program from different countries like
World Bank, NGOs, United States and other countries (Rukhadze, 2013). There are different
reforms that were seen in healthcare sector of Georgia. Example of these reforms includes
development and implementation of fully tax funded healthcare in 1991, adoption of health care
system reorganization through presidential decree number 400 in 1994, composition and
implementation of state medical programs by Georgian cabinet of the ministry through resolution
no 399 in 1995. In the period of 1995 to 1996, the government of Georgia has introduced the
compulsory payroll taxes as part of the state health fund or SHF. In this reform, the government
has also introduced social health insurance in country. In 1996, a reform was made to the
formulation of municipal health funds. In 1996 – 1997, the SHF or social health fund was
replaced by SMIC. In the same year, government started to provide accreditation and
certification to higher education institutions in the field of medical and healthcare sector. The
development of national health policy has taken place in 1999 (Richardson and Berdzuli, 2017).
In 2000, the strategic health plan for 2000 – 2009 was developed and published. In 2004, the
social insurance plan was abolished. By the end of 2008, approximately 80% of public sector
hospitals were sold to private sectors for privatization of health facilities. In 2007, the public
health law was also adopted by parliament of Georgia.

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Conclusion
On the basis of above analysis, it can be concluded that health system of Georgia is highly
influenced by health system of other countries like USA and European countries. Prior to
independence, Georgia was a part of Soviet Union. The health system and healthcare policies of
Georgia are effective to serve the healthcare needs of its population. The health care environment
of Georgia is highly characterized by privatization. For example, by end of 2008, 80% of all
hospitals in country were sold to private sector.

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References
Aliyev, H. (2014) The effects of the Saakashvili era reforms on informal practices in the
Republic of Georgia. Studies of Transition States and Societies, 6(1), pp. 01-20.
Chanturidze, T., Ugulava, T., Durán, A., Ensor, T. and Richardson, E. (2018) Georgia: Health
system review. Health Systems in Transition, 11(8), pp. 001-114.
Gabritchidze, S. (2018) An Analysis Of Recent Health System Reforms In Georgia: Future
Implications Of Mass Privatization And Increasing The Role Of The Private Health Market.
[Online]. Available at: http://www.isp.org.pl/files/3078643590340099001202129832.pdf
(Accessed: 03 October 2018).
Georgia Parliament (2018) Vision for Developing the Healthcare System in Georgia by 2030.
[Online]. Available at:
http://www.parliament.ge/ge/ajax/downloadFile/81366/Health_Strategy_Eng (Accessed: 03
October 2018).
Gotsadze, G., Murphy, A., Shengelia, N. and Zoidze, A. (2015) Healthcare utilization and
expenditures for chronic and acute conditions in Georgia: Does benefit package design
matter?. BMC health services research, 15(1), pp. 88-97.
Richardson, E. and Berdzuli, N. (2017) Georgia: Health System Review. Health systems in
transition, 19(4), pp. 01-90.
Rukhadze, T. (2013) An overview of the health care system in Georgia: expert recommendations
in the context of predictive, preventive and personalised medicine. EPMA Journal, 4(1), pp. 08-
20.

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Sehngelia, L., Pavlova, M. and Groot, W. (2016) Impact of Healthcare Reform on Universal
Coverage in Georgia: A Systematic Review. Diversity & Equality in Health and Care, 13(5), pp.
349-356.
Sulaberidze, L., Green, S., Chikovani, I., Uchaneishvili, M. and Gotsadze, G. (2018) Barriers to
delivering mental health services in Georgia with an economic and financial focus: informing
policy and acting on evidence. BMC health services research, 18(1), pp. 108-120.