On 28 February, 2013, a new universal healthcare program was added to the existing two state insurance programs, making state-sponsored health insurance available on a massive scale.

Who will be the beneficiaries of the state universal healthcare program

The state universal healthcare program will guarantee insurance for all non-insured individuals living in the country. In other words, current beneficiaries of state insurance programs and those who have private insurance will not be covered by the program. For the first time in the country’s recent history state insurance will cover Georgian citizens as well as holders of neutral identification cards/neutral travel documents and individuals without citizenship status.

Who will implement the state universal healthcare program

The universal healthcare program, whose emphasis will be on emergency in-patient care and out-patient services, will be implemented by the Social Service Agency.

What will happen to the existing state insurance programs

The insurance programs that began in 2007 and 2012 (covering in total approximately 2.1 million people) insure the socially vulnerable and pension-age populations, children age five and younger, students, disabled children, and adults with severe disabilities. Private insurance companies were implementing these programs and for the time being, they continue to implement them.
It is important that private insurance companies continue to be involved in the state insurance programs. Given that the state health insurance sector accounts for approximately 75% of the health insurance market, the government would deal a serious blow to insurance companies and the health insurance market if it were to change the status quo. Apart from this, it is important that Social Service Agency have the ability to compare how effectively it is implementing the insurance programs and how effectively these programs are being implemented by private companies.

What is positive about the universal healthcare program

• The universal healthcare program includes more beneficiaries and covers wider population.

• The terms of service for emergency ambulatory and in-patient care are described in detail in the program, which provides beneficiaries with concrete information related to what illnesses their insurance covers; in particular, it lists hundreds of groups of illnesses and conditions, which has not been done for any other state insurance program.

• The program finances preventative care, which was one of our main recommendations for the Georgian government, and which has not been financed by any state insurance program before.
• Beneficiaries seeking to register for out-patient services are free to choose among medical service providers participating in the program on the condition that they can only change their medical centre of choice once every two months.

What is problematic about the universal healthcare program

• The state universal healthcare program will guarantee insurance for all non-insured individuals living in the country, which is too broad-brush an approach. We think that it is important to differentiate the non-insured portion of the population in order to ensure that budget expenditures and the corresponding fiscal burden do not grow too large. We also believe that it is possible to include people in the program based on their income. To determine the income limits, the government could use a database of all employed persons, which must be set up for the administration of the untaxed minimum in income tax collection.

• While the universal healthcare program describes in detail the terms of service for emergency out-patient and in-patient care, there are no guidelines or protocols for these diseases/medical conditions. This issue is important since clinical guidelines describe the treatments for groups of diseases or particular clinical conditions, while protocols describe the stages of treatment, necessary medications, the order in which they should be taken, the prices of services etc. The existence of guidelines and protocols facilitates reimbursements between insurance companies and non-private clinics and helps resolve disputes over the appropriateness of prescribed treatments.

• Another one of the program’s gaps is that it does not specify whether or not the state reimburses the service provider the cost of emergency in-patient or out-patient services when it is not clear whether the start of treatment for a beneficiary’s condition needs to be financed by the program.

What are the program’s challenges with regards to management

• If the new insurance program will insure all non-insured individuals, then it is expected that there will be a sharp increase in the number of these individuals at the expense of those insured in the private sector. In particular, if the state will insure everyone, there is a significant chance that employers will no longer expend resources on insuring their own employees. Employers may not stop insuring their own employees if the universal healthcare program offers the insured far worse conditions than the private insurance plan and if employers want to create additional incentives for their own employees. However, for many employers, the basic insurance coverage for employees will be more than sufficient. To prevent free-riding, health insurance taxes could be levied against employers or employees.
• The state insurance’s share of the health insurance market is approximately 75%. It is so large that not only the development of the insurance market, but the very existence of the market itself depends on the government’s decisions as to the implementation of the state insurance program.
• The universal insurance program’s greatest risk is that the Social Service Agency may not be able to manage the program effectively, which will ultimately increase the program costs. For example, medical service providers are paid for emergency out-patient and in-patient care on a case-by-case basis. Thus, medical service providers can deliberately aggravate a patient’s diagnosis or give a patient a different diagnosis in order to receive additional compensation/reimbursement for the treatment.
• For normal out-patient services, however, the state pays medical service providers participating in the programme a fixed price of GEL 0.86 (GEL 0.25 for laboratory tests) for each beneficiary. This, by contrast, creates a disincentive for medical service providers to provide medical services to a beneficiary, since the provider is paid a fixed amount per beneficiary whether or not it provides services to them. During the process of implementing the programme, it will become apparent whether or not this fixed amount is sufficient. If it turns out that it is not, the Social Service Agency must revise the premium accordingly.
• Considering that the program will not be implemented by private insurance companies, the fines imposed by the Agency could be entirely insufficient for medical service providers. For example, if the prescribed diagnosis does not correspond to the programmatic compensation or if it is increased in severity, or if it is represented as an accompanying diagnosis, the implementing provider will be required to return the reimbursed amount in full as a fine. Even by investigating on a large scale, the Social Service Agency cannot identify every violation, which is why we believe that the prescribed fines for service providers cannot be any lower than the income the providers collect in violation of the terms and conditions.
• In our report on the health insurance sector, we discussed in detail violations of the rights of the insured and cases of services not being provided to them. The Social Service Agency, in the interest of effectively implementing the universal healthcare program, must create an effective mechanism for monitoring as well as protecting the rights of beneficiaries, which has not as yet been done.

Transparency International Georgia expresses its readiness to get involved together with the government and the interested public in discussions about the recommendations presented here, which will help pave the way for reforms of the health insurance and wider healthcare sectors.