Healthcare is a growing and rapidly developing sector in Georgia. From 2013 to 2022, the output of the healthcare sector exhibited a consistent upward trend. Preliminary data for 2022 shows that the sector’s output reached 2.4 billion GEL, which is 2.6 times higher than the corresponding indicator in 2013. Throughout this period, the sector achieved a Compound Annual Growth Rate (CAGR) of 10%.
Despite of low rate of accessibilities to medical services, healthcare sector is well diversified in terms of number of participants and their market share, leading to high levels of competition. According to the report by TBCcapital, financially, the health sector has shown positive performance, with total revenue increasing from 1.2 billion GEL in 2018 to 1.8 billion GEL in 2021. The COVID-19 pandemic had a significant impact on clinic revenues and expenses in 2020, putting pressure on revenues and costs and pushed down NI margin to as low as 3%, however, in 2021, with the increase in funding for the management of the pandemic, the EBITDA margin in the healthcare sector increased to 25%, and the profit margin increased to 17%.
Healthcare expenditure in Georgia experienced a consistent increase from 2013 to 2022. In 2022, total healthcare expenditure amounted to 4.1 billion GEL, a 72% increase compared to 2013. The pandemic contributed to higher healthcare costs in 2020 and 2021, but with the end of the pandemic in 2022, Covid-19-related expenses decreased compared to the previous year.
With the expansion of the state’s universal healthcare program from 2013 to 2022, the share of out-of-pocket costs in total healthcare expenditure decreased from 65% (2013) to 43% (2022). Additionally, the share of private health insurance in total expenditure decreased from 14% to 7%, while the corresponding share of public expenditure increased from 20% to 50%.
The largest share of government healthcare spending (on average 57%) is allocated to the universal health insurance program. Government of Georgia also implements targeted programs, with organ transplantation (bone marrow and liver transplantation) being added in 2022, offering future development prospects.
The demand for healthcare services is influenced by the population size, which has been declining over the past decade. However, in 2022, the influx of migrants to Georgia increased due to the Russia-Ukraine war. Despite this, emigration of the young population and a decline in birth rates continue to have a negative impact on the demand for healthcare services.
As for the supply side, from 2013 to 2021, the number of healthcare service providers and beds in Georgia increased. However, the average bed occupancy rate remained low at 50%, indicating inefficient utilization of resources. Although the number of medical personnel also increased during this period, the nurse-doctor ratio in Georgia is low (0.98), suggesting potential strain on nursing resources and potential negative effects on patient treatment and monitoring.
The study identified the following future perspectives of the healthcare sector:
Hospital mergers: Market competition and recent or planned regulations present opportunities for consolidation. Through the consolidation of resources and services, hospitals can achieve cost reduction and enhance operational efficiency.
Partnerships with universities: Collaborating with universities through equity participation enables clinics to access a skilled workforce and explore development prospects, while simultaneously providing students with valuable practical experience opportunities.
Development of medical tourism: Georgia has a potential to foster medical tourism and attract patients from neighboring countries (Armenia, Azerbaijan), Central Asia (Kazakhstan, Uzbekistan, etc.), and the Persian Gulf countries.
Areas with high growth potential: The healthcare sector in Georgia holds great promise in several areas, including organ transplantation, stroke management, and post-operative rehabilitation. Additionally, there is significant potential for growth in plastic surgery, dentistry, hair transplantation, and aesthetic medicine, which are not covered by the DRG system.
Pensioners in Republic of Georgia are covered by the Universal Healthcare Program. In addition, socially vulnerable chronic patients additionally benefit from the Program for Providing Medicine for the Chronic Diseases (PPMCD). The research aims to assess the financial accessibility to outpatient medicines for the elderly in Georgia. Totally, 700 pensioners were surveyed within the quantitative research. The study showed that PPMCD (launched in 2017) has facilitated the affordability of medicines for elderly, especially the socially vulnerable chronic patients. However, the out-of-pocket spending on medicine is still high for most respondents. The main problem for the family is the high unaffordable price (26%). Nearly a third of respondents (31%) could not fully purchase all the outpatient medicine prescribed by the doctor, and 15% could not purchase them at all due to the high costs. Most of the respondents (57%) buy outpatient medicine without visiting family doctor and 37% self-medicate. This shows the irrational choice of elderly people during their health problems. In this regard, the pharmacy and self-treatment play an important role in the informal network of medical service. A significant part of the respondents (36%) does not know about PPMDC. The low level of awareness of the PPMCD among pensioners increases the risk of impoverishment. It is necessary to increase pensioners’ awareness about PPMCD. It is recommended to include not only socially vulnerable people in the PPMDC, but also chronic patients of pension age, because the expenses may often be catastrophic for them.
Covid
Over 82 per cent of respondents are worried that someone in their immediate family will become seriously ill with COVID-19 yet 33 per cent of unvaccinated respondents remain unlikely to get vaccinated against COVID-19 and 35 per cent are undecided, according to the results of the sixth and final wave of the Real Time Monitoring Survey
The Real Time Monitoring Survey, carried out by the National Statistics Office of Georgia in partnership with UNICEF and with support from USAID, showed that 11 per cent of households were unable able to receive a needed health service and 38 per cent of households could not afford medication in the two weeks prior to the survey.
Only 60 per cent of children age 2 to 4 years and only 66 per cent of children age 2 to 5 years attended early childhood education since the beginning of the 2021-2022 school year.
Over 71 per cent of children age 6-17 years attended only classroom teaching, 22 per cent – only distance learning, 5 per cent – combined learning, while 2 per cent did not attend school at all. Up to 15 per cent of families had no access to internet, with rural households more than twice as likely to have no internet than urban households, making online learning a challenge and increasing the digital divide.
