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Overview of Health Care Reforms in Georgia

2004-2009

Tata ChanturidzeTata ChanturidzeConsultantConsultantOxford Policy Management, UKOxford Policy Management, UK

The Public Policy Discussion PanelThe Public Policy Discussion Panel (PPDP)PPDP)

Supported by USAID SME Support Project &The World Bank’s Public Supported by USAID SME Support Project &The World Bank’s Public Information Center (PIC)Information Center (PIC)

June 17, Tbilisi, GeorgiaJune 17, Tbilisi, Georgia

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Outline

The Aim of the Presentation WHO Health System Conceptual Framework Where did the GoG start in 2004? Key reform areas in 2004-2009 - Stewardship Function: key achievements and challenges - Financing Function: key achievements and challenges - Resource Generation Function: key achievements and challenges - Delivering Services: key achievements and challenges Where are we now? WHO& OECD Frameworks for Health Systems/ Reforms Performance

Assessment Georgia Health ranking among other countries The Way Forward

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Why looking at Health Reforms & Health Systems Performance?

To provide national decision-makers, key counterparts and the public with sound evidence:

To inform strategic decisions on health sector reform and health system organization

To stimulate improvements in implementation of programmes at local, regional and national levels

To monitor progress towards national targets for health and health systems

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WHO Health System Conceptual Framework: Functions & Objectives

Health System Functions Health System Objectives

Stewardship (Oversight)

Financing (collecting,

pooling, purchasing)

Creating Resources

(Investment and training)

Delivering Services

(Provision)Health

Fair (financial)

Contribution

Responsiveness (to peoples non-medical

expectations)

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THE WHO Health System Conceptual Framework

Source: WHO Health System Strengthening Strategy 2007

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Where did the GoG start in 2004?

Previous Reforms

There has been little consistency in the health care reforms introduced over the last 20 years.Different health authorities, representing the will of the governments in power, wereoperating in different contexts - economic collapse in 1990-94, some stabilization from 1995, and slight economic improvements until 2003, and liberal government after 2003directed towards rapid economic growth through the market orientation;

They were driven by diverse political values, and had varying commitment and capacity toimplement the reforms outlined.

These differences lay behind the strategic twists over the years, forcing governments to come upwith new policies instead of building on existing strategies and best practices, and adding value toachievements of previous actions.

Largely because of their short lifespan and alterations to commitments to the declared strategic decisions, almost all reform initiatives were implemented as activities, but produced very fewoutputs and outcomes.

But the technical inadequacy of those in charge, combined with incorrectly defined processes, theinefficiency of resource allocation, and the lack of capacity at an implementation level, also played

a significant role.  [

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Where did the GoG start in 2004?

Demographic Trends

Population growth has been negative since independence (-1,8 in 1995 and -0,9 in 2006)*

The overall population has shrunk by 19.1% between 1990 and 2006* It has been estimated that by 2025 the population of Georgia will shrink by a

further 0.8 million** The age profile of the population has shifted**:

- The proportion of children declining from 24.6% in 1990 to 18.4% in 2006;

- The proportion of the population aged 65 years and over has

increased from 9.3% in 1990 to 14.4% in 2006. By 2050 it is estimated that 24.2% of Georgia’s population will be over 65 years

old***

*WHO Regional Office for Europe 2009 **World Bank, Chawla, Betcherman et al. 2007

***Tsuladze, Maglaperidze et al. 2003.

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Where did the GoG start in 2004?

Health Status Average life expectancy rose from 70,3 in 1995 to 71,3 in 2004 and further to 73,8 in

2006 The maternal mortality rate increased by almost 20% between 1990 and 2000, from 41

to 49 maternal deaths per 100,000 live births*. The peak rate - in 1997, when 70.6 maternal deaths per 100,000 live births;

The maternal mortality rate fell from 51.5 in 2000-2002 to 40.3 in 2003-2005** Infant mortality declined from a rate of 40.7 per 1,000 live births in 1990-1999 to 21.1

per 1,000 live births in 2000-2004 The neonatal mortality rate fell from 25.0 to 16.8 per 1000 live births but the post-

neonatal mortality showed the most significant drop falling from 15.7 to 4.3 per 1000 live births in 1999-2004***

The child under-5 mortality rate declined from 45 per 1,000 live births to 25 per 1,000 live births between 2000 and 2004***

TB rates have been growing since 1990, reaching a peak in 1995 with a prevalence of 166.9 and incidence 86.6 per 100 000 population ****.

Vaccination dropped dramatically from around 95% to just 30-50% in 1990-1995 for major vaccine preventable diseases (TB, diphtheria, pertussis, tetanus, polio, measles), and only started to improve after 1995 to around 70-90% coverage in the 2000s*****

In 2003, WHO reported 86% immunization coverage for measles, down from 97% in 2000;

*NCDCPH**Chkhatarashvili, Chikovani et al. 2006

***Serbanescu and et al 2007****Centre for Medical Information and Statistics 2007

*****World Health Organization Regional Office for Europe 2009)

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Where did the GoG start in 2004?

Some Effectiveness and Efficiency indicators*

31,4% occupancy rate in Hospitals (2004) 61% of policlinics had basic equipment (1999-2000) On average 2.2 hospital beds per physician and 1.5 hospital beds per nurse 4.7 qualified doctors per 1000 inhabitants; and the lowest number of nurses per population in PSC; On average 1,2 patients a day per PHC doctor (2004); On average 40 surgery per year per surgeon (1999);

*Imnadze, Tsintsadze et al. 2006

200

300

400

500

600

1990 2000

ArmeniaAzerbaijanGeorgiaRussian FederationEU CIS

Physicians per 100000

Figure 5.2 Physicians per 100000 population in Georgia and other selected countries since 1990 to latest available year

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Key Reform Areas in 2004-2009 STEWARDSHIP FUNSTION: Policy Development Process

2004-2005: Almost no decisions in, despite of accumulated technical work supported by aid partners;

January-June 2006: Transparent and participatory process for developing a health reform concept, lead by the MoLHSA and with the involvement of all key stakeholders;

Outcome: Draft Health Sector Reform Concept, June 2006;

October 2006: Shift in the policy making process: - The Governmental Commission for Health and Social Reforms created as a decision

making body for health care reforms, headed by the Prime Minister, with members of line ministries and the State Minister of PR;

- The Secretariat for the Governmental Committee created, headed by the State Minister of PR, with only a technical role for the high representatives of the MoLHSA;

Outcomes: Hospital Master plan; Decision to give State funds to Private Insurance companies for administration; Draft PHC Master Plan II,

2008: Shift in the policy making process back to MoLHSA leadership Outcomes: Modification of State Funded Programs;

FINAL OUTCOME: NO HEALTH POLICY

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Key Reform Areas in 2004-2009 STEWARDSHIP FUNSTION: Regulation

Approach: Liberalizing the regulation

Main feature: Key transformations undertaken without preparation and enforcement of respective regulatory background

Simplification of both licensing and certification procedures

Relying largely on self-regulation of both service providers and purchasers, and delegating most regulatory functions to independent entities

Refusing to develop accreditation standards or undertake accreditation, in the belief that supply side regulation should be vastly liberal

OUTCOME: Highly Liberalized Regulations No Enforcement in the sector

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Key Reform Areas in 2004-2009 STEWARDSHIP FUNSTION:

Organizational Arrangements

More then fifteen institutions affiliated to the MoLHSA abolished in 2004-2007 (including NHI);

Regional MoLHSA abolished in 2006; NCDC unsuccessfully merged with the PHD in 2006; SAHSR merged with the Drug Agency in 2007;

OUTCOMES: Unclearness around Public Health function, Regulation of Medical services and Pharmaceuticals, and Oversight function of the

MoLHSA in a context of privatization

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Key Reform Areas in 2004-2009FINANCING FUNCTION: Collecting, Pooling, Purchasing

OUTCOME: INCRESED STATE ALLOCATIONS FOR HEALTH

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Key Reform Areas in 2004-2009FINANCING FUNCTION: Collecting, Pooling, Purchasing

Trend in targeting social transfers, by consumption deciles, 2004-07

- 12.3% SHB allocated to services for the poorest households in 2006;- 26.9% SHB allocated to services for the poorest households in 2007; - Allocations almost doubled in 2008;

OUTCOME: BATTER TARGETING HEALTH NEEDS OF THE POOR

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*X ღერძზ ე აღებუ ლიასაქართველოს მოსახლეობა10 თანაბარ ნაწილად ყველაზ ე გაჭირვებუ ლიდან მდიდრებამდე

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FINANING FUNCTION: Key Challenges _Share of OOPs

Table 3.1 Trends in health expenditure in Georgia, selected years

2003 2004 2005 2006

GDP (current prices, US$, millions) 3991.5 5125.9 6410.9 7747.1

Total health expenditure (US$, millions) 337.8 436.2 550.7 651.4

Public health expenditure (US$, millions) 40.5 67.2 107.5 140.5

Private health expenditure (US$, millions) 262.2 342 427.7 477.1

Donor aid (US$, millions) 25.2 27 15.6 33.8

Total expenditure on health (THE) % GDP 8.5 8.5 8.6 8.4

General government expenditure on health (GGHE) % THE 14.9 15.4 19.5 21.6

Private expenditure on health (PvtHE) % THE 77.6 78.4 77.7 73.2

GGHE % General government expenditure 7.7 5.3 5.9 5.6

SUSIF expenditure on health % GGHE 64.3 62.8 45.5 51.4

Out-of-pocket spending on health % PvtHE 99.5 99.0 99.0 98.5

Private prepaid plans expenditure on health % PvtHE 0.5 1.0 1.0 1.5

Externally funded expenditure on health % THE 7.4 6.2 2.8 5.2

Source: (Policy Division of MoLHSA 2008)

OUTCOME: Share of OPPs in THA remains very high, despite of the slight decline in last years

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FINANING FUNCTION: Key Challenges _ Rapid Privatization of Service Purchasing

Issue I: rapid delegation of purchasing function to the private insurance industry for health care services provided in the frames of the state funded programmes

International experience shows that any bold ‘privatization’ of service purchasing has many associated risks; - the administrative costs of private insurance largely exceed the costs when public expenditures are administered by a public purchase - the existing capacity of private health insurance is largely inadequate to administer the volume of health insurance to be purchased through the state health programmes for the country’s most vulnerable households; - the regulation, reporting and accountability instruments to supervise the private insurance function in the framework of the state health programmes remain weak;

Concussions: It is too early to make judgements on outcomes; If well proceeded, it could lead to the universal insurance;

Issue II: Introduction of “cheep insurance” - Based on the way the insurance works worldwide, was not it evident from the begging that the programme will face challenges? - Is the “cheep insurance” proper substitution for the State programmes for PHC and others that were abolished?

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Key Reform Areas in 2004-2009 RESOURCE GENERATION FUNCTION

Investing in Infrastructure and Health Human Resources

Table 5.1 Number of beds per 100 000 people in acute care hospitals, psychiatric hospitals and long-term institutions, 1980–2007

Years Acute care hospital beds per 100000

Psychiatric hospital beds per 100000

Nursing and elderly home beds per 100000

1980 879.9 95.9 …

1985 865.6 93.6 …

1990 857.5 84.9 …

1995 679.7 54.6 …

2000 434.2 26.9 6.8 (1999)

2005 374.6 28.4 …

2006 343.6 35.0 …

2007 291.5 26.1 … Source: (World Health Organization Regional Office for Europe 2009)

Fig. 5.1 Acute care hospital beds per 100000 in Georgia and selected countries, 1990 to latest available year

200

300

400

500

600

700

800

900

1000

1100

1990 2000

ArmeniaAzerbaijanGeorgiaRussian FederationEU CIS

Acute care hospital beds per 100000

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Key Reform Areas in 2004-2009: Resource Generation Function

Investing in Infrastructure and Health Human Resources

Hospital Master plan The Master Plan called for the complete replacement of existing hospital infrastructure

within a three-year period (2007-2009) by transferring full ownership rights from the state to the private sector through an “Investment programme”

Master Plan approved in January 2007; Master Plan shortfalls:

- Right to participate in privatization rendered to all (including Pharmaceutical companies);

- Rapid process, envisioning privatization of about 70% of hospitals within a year; Implementation shortfalls:

- Significant delays in tendering and contracting processes;

- Lack of GoG capabilities to enforce contract implementation in current economic context;

OUTCOME: The probability for realization of the GoG plan on “100 New Hospitals” is extremely low

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Key Reform Areas in 2004-2009 Resource Generation Function: Investing in Infrastructure and Health Human Resources

PHC Master Plan (s)

PHC Master Plan I: Aimed to create a territorially-based publicly-owned network, ensuring accessibility to

PHC centres within 15 minutes for the entire population of Georgia, and calling for the establishment of 717 PHC facilities throughout the country;

The government reconsidered this plan in March 2007, regarding it as unrealistic resource wise for mountainous regions, and unnecessary for urban areas.

PHC Master Plan II (draft): It differentiated urban and rural models of PHC provision, with about 900 PHC providers

in rural areas, and an unlimited number of PHC facilities in the cities and regional/district centres, which were all to be privatized.

The vision of having one PHC facility in every village was packaged as a component of the “50 days programme towards elimination of poverty in Georgia”, which was articulated and implemented in 2008/09.

OUTCOME: Defragmentation and lack of holistic strategic vision on PHC development nationwide;Absence of State responsibilities on funding PHC;

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Challenges: Is this all for five years?

Implementation of the GoG program on “100 New Hospitals” under the question;

Overall picture for PHC development in Georgia unclear; State program on universal PHC coverage abolished in 2009; Success of the “Cheep Insurance” program questionable; Multiple players substituted single purchaser in state funded

health service procurement; Organizational restructuring difficulties at the central and

regional levels; Ultra- liberalized and not enforced regulations; Challenges with Public Health;

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&Where does it bring Georgia in terms of

International Ranking?

Reform Implications of Populations Health

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Health Systems

Reforms Performance Appraisal

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Health System PerformanceHealth System Performance

DimensionsDimensions

QUALITYQUALITY AccessAccess Cost/Cost/

ExpenditureExpenditure

Health care Health care needsneeds

EffectivenessEffectiveness SafetySafety Responsiveness /Responsiveness /

Patient centerednessPatient centeredness

Staying Staying healthyhealthy

Getting betterGetting better

Living with Living with illness or illness or disabilitydisability

Coping with Coping with end of lifeend of life

Outcomes Process StructureOutcomes Process Structure

OECDOECD FRAMEWORKFRAMEWORK

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Health Health

ResponsivenessResponsiveness

Fairness in financingFairness in financing

LevelLevel DistributionDistribution

EfficiencyEfficiency

QualityQuality EquityEquity

WHO’s HSPA Framework Goals

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Three Tier Approach

Final GoalsFinal Goals

Health Responsiveness Fairness of Finance

Equity

Intermediate GoalsIntermediate Goals

Effective Coverage

Quality Technical Efficiency

Health System DeterminantsHealth System Determinants

Human resource

stock

Physical infrastructure

Knowledge and

technologies

Adequate financing

MACRO EFFICIENCY – COMPOSITE GOAL ATTAINMENT

Inpu

ts

Pro

cess

O

utco

me

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Not All Goals Equally Matter Across Countries

Source: Health Systems Performance Assessment – Debates, Methods and Empiricism. Murray CJL, Evans EB, ed. Geneva, 2003.

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Source: World Health Report, 2000.

HEALTH: Life, Death and Disability

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Health/Health Systems In Selected Countries The World Health Organization's ranking of the world's Health Systems

Georgia’s health system ranks 114 among 190 countries, proceeding Moldova, Armenia, Syria, Azerbaijan, Ecuador and India among many other countries*;

The 2008 Fact Book: Death Rate(deaths/1,000 population) 2008 Country Ranks

Georgia ranks 78 out of 201 countries**

The 2008 Fact Book: Birth Rate(births/1,000 population) 2008 Country Ranks

Georgia ranks 184 among 218 countries***

The 2008 Fact Book: Life expectancy at birth – total (years) 2008 Country Ranks Georgia ranks 61 among 211 countries****

Georgia's performance on the Global Competitiveness Index 2006-2007

Georgia's overall rank for GCI was 85th place (out of 125 countries): and 61 in Health for 2006-2007*****;

*http://www.photius.com/rankings/healthranks.html**http://www.photius.com/rankings/population/death_rate_2008_0.html

***http://www.photius.com/rankings/population/*****http://www.photius.com/rankings/population/life_expectancy_at_birth_total_2008_0.html

***** <http://pdf.usaid.gov/pdf_docs/PNADL550.pdf>

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Responsiveness & Importance of its Domains Responsiveness & Importance of its Domains Comparison of 8 domain weights across 65 surveys, 2002-2003

Comparison of responsiveness domain weights from 65 surveys with that from key informant survey of 2000.-

Sources: WHO

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Responsiveness Index In Selected Countries

Responsiveness of Health Systems, 1999 (WHR,2000)

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Fairness of Finance

Improving protection of the population against financial risk of health care costs (the need for health care should not cause severe financial hardship for the patient and family)

Distributing burden of funding the health system “fairly” (as a percentage of their capacity to pay, poorer persons should not contribute more than richer persons, considering all sources of funds)

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Catastrophic Health Expenditures and Impoverishment in EURO Countries

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WHO: Total Health Expenditures as % of GDP, 2005 - Country Rankings Georgia ranks 34 out of 190 countries

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WHAT TO DO: Way Forward

Build on existing strategies and best practices, adding value to achievements of previous actions

Set up a transparent and evidence based process for policy making

Elaborate long term Health care Policy, medium term Strategy, and short term Implementation Plan

Create the Intelligence capacity in the MoLHSA and use it for informed and evidence based decision making

Elaborate Health Financing Policy addressing the critical issue of out of pocket payments

Introduce the simple ways for pooling relatively low resource base

Increase efficiency of service purchasing through developing systems, processes and tools for accountability, contracting, information sharing, and performance based management

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WHAT TO DO: Way Forward

Treat carefully the implications of the recent marketization reforms, emphasising on concerns of feasibility and sustainability of the system, as well as issues relating to quality, efficiency and equity

Develop the Regulations related to various aspects of health care, including the production of human resources, service provision and purchasing, and the quality of care

Make sure, that actively building the regulatory environment involves more stringent and transparent enforcement of laws and regulations

Improve and Rationalize service provision, emphasising on the quality and efficiency issues;

Proceed with positive trend in resource allocations towards the health care needs of the poorest households

Continue increase in state allocations to the health care services, desirably covering the essential package of medicines for the most vulnerable

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Thank You!