- It has been less than a month since you have taken over the management of the Ministry of Labor, Health and Social Affairs. For many, your appointment to that position came as a surprise. Do you have detailed information about those spheres in Georgia and about problems existing there?
During the past month, I have met with many people, with representatives of the health care, social and health insurance sectors. That period of time is long enough to become well aware of specifics of our health care and social assistance system and sufficient to see existing problems too. These are difficult spheres, but I am optimistic because a good foundation has been laid. The state has succeeded in transferring insurance principles into the health care system and, based on that, has started renovating infrastructure. We cover virtually the whole of Georgia with brand new or rehabilitated hospitals and thus ensure geographic accessibility of medical care for citizens. A key challenge which remains is the financial affordability of that service.
- How are you going to ensure better affordability?
It is important that a so-called “household evaluation” scoring system has been established. A family submits an application to the state, saying that it considers itself a low-income or a no-income family and needs state assistance. Then, a social agent visits that family to evaluate it according to certain criteria. Overall, that system works and more than 800,000 people receive social aid from the state. That is a rather strong mechanism for assisting the most indigent.
- One of the priorities in the action plan is improving the rating system for assessing socially vulnerable people. What are the shortcomings of the current system?
While visiting regions, I saw first-hand how those people to whom we provide social assistance really live. Our objective is not only to assist those people, but also to create preconditions for them to exit poverty. Therefore, we must better adjust the rating system to the reality. For example, bordering districts face a problem. Under the existing model, if a member of a family crosses Georgia’s border, it is assumed that family has income and that may push up scores so that the family loses social assistance. Hence, I am thinking of revising the border-crossing item in the evaluation system.
- But, the simplification of criteria will lead to an increase in the number of socially vulnerable people. Besides, a rating system can never be perfect and some statistical error will exist anyway.
The number may increase a little, but we must assist those who are really needy. On the one hand, the state declares that a computer is no longer a luxury item in the Twenty-First Century and that children need it to receive quality education. On the other hand, a computer in a family automatically raises evaluation scores and may result in withdrawal of that family from the social database.
Who to blame when a family exceeds the upper margin of scores is an arguable issue. Under the conditions of economic growth, the population develops other types of demand. It is important to ensure that the system keeps pace with real life.
- To go back to the health care sphere, one of the key directions of reform is the privatization of hospitals. Given those conditions, will excessive activity on the part of the state impede investors in freely running their businesses and, consequently, impede any greater incentive to develop hospitals?
Quite the contrary: Steps taken by the state have created the prerequisite for attracting investments to that sphere. When hospitals were state-owned, an investor had to come, invest his capital, and then wait for a patient to come to his hospital. Therefore, an investor found it difficult to take the first step and estimate whether a hospital would prove efficient.
By creating a social database and insuring so many people, the state has made it clear that it puts huge resources into the system. Just imagine how much money the state gives to insurance companies. That has encouraged investors to take that first step, has attracted additional investments, and has renovated the health care infrastructure within a short time span. Today, virtually every district countrywide has its own renovated hospital equipped with modern technique.
- You noted yourself that huge amounts are allocated for insurance. In the action plan, you say that, by the end of this year, at least every second citizen will be insured. On what estimates is that plan based? Does the state possess such necessary means, including financial resources?
At present, the state insures more than 800,000 people. Starting in September, that number will be increased without exception by every pensioner, including those who live in medium- and high-income households and do not need social assistance, as well as children under the age of five. By the end of the year, more than 1.6 million people will have state insurance in addition to those citizens who have private insurance.
Resources are, naturally, calculated. Otherwise, the state would not have taken such a step. We will fulfill obligations to people which we assume.
- If the state insures increasingly more people, will that evaporate the motivation of people to take care of their own health and to choose insurance companies for themselves? Will that not impede competition in the health care sector?
The majority of those insured by the state belong to that category of people who cannot buy insurance themselves.
That will not impede competition. In parallel with the fact that the state channels resources toward the health sector via insurance companies, the insurance companies themselves broaden the private insurance base too.
The health insurance culture in Georgia is low. We realize the need for that only when we encounter a problem. Beginning in September, many families which do not now deem it necessary to buy an insurance policy will have at least one member – an elderly relative or a child – with insurance. When they start using their insurance that will create a motivation for other family members to purchase insurance and insurance companies will broaden the private base.
- Considering that taxes are paid by everyone, including the population living below the poverty line, it turns out that the poor will have to subsidize affluent groups in order for the latter to receive state insurance. Yet all that is done in the name of “social equality.”
People who are assisted by the state and have no other income practically do not pay taxes. But there is a category of citizens in the country who have income and pay taxes to the budget. We all agree that part of the taxes paid by us must be directed toward assisting the poor in the form of social aid and insurance policy. That is why that system is built upon solidarity and mutual assistance.
- Why is it necessary for the state to insure as many people as possible and not just that population living below the poverty line?
Pensioners are a high-risk group to insure, and insurance companies avoid insuring that group even though that segment of the population needs care most of all. The state says, “We take care of the future generation and the elderly. It is important that all of them are insured.”
- As regards the qualification of medical personnel, what makes you say that there are problems in that area?
Today, the managers of new clinics conduct tests to ensure that qualified people are not left outside the system or that unqualified people do not remain within the system. Risk to the health of each patient is connected to that.
We must understand that even qualified personnel may fail to save a patient. Every disease has its specific mortality rate, which cannot be avoided by any health care system. We must explain to the society that we have qualified doctors, but, if there are unprofessional ones, they will leave the system.
The state is ready to assist in this area as well. We plan to establish a training center for medical personnel where the existing contingent will regularly upgrade their qualifications. Given that any mistake by medical personnel entails high financial sanctions, insurance companies and hospital management regularly try to train medical cadres. That is an important point. We must be confident that, when we enter a hospital, we will receive qualified service.
- Why do you believe that that must be coordinated by the state and that the labor market cannot regulate the level of qualification?
The labor market does that today. But, since we see many problems in this area, the state will support the private sector. If that would take the private sector five or seven years, state intervention must shorten that term. We cannot put the health of our citizens at risk.
- As regards the mediation service which protects people with insurance, what is the need for a body that interferes in the relationship among a person, hospital and insurance company?
That very relationship must be regulated by rules of the game, which we will present to the public soon. That means that a person who enters a hospital must not be denied medical service on any ground whatsoever, regardless of which insurance company policy he or she holds.
- Will that rule not inflict financial harm on hospitals?
No, it will not. A hospital is interested in attracting patients. Its financial sustainability depends on a correct business strategy and the number of patients. A patient goes to a hospital when he or she knows that the hospital employs good and qualified doctors, has appropriate medical equipment, and provides decent service.
- What then is the motivation of hospitals to serve insured patients?
A legal or financial dispute between a hospital and an insurance company could become a problem. An insured person could go to a hospital, the hospital could spend its resources on that person, and the insurance company could say that the policy does not envisage the service provided and will not cover that sum.
Often disputes arise on the issue of adequacy of treatment provided. To receive more money, a hospital might administer unnecessary procedures to a patient. An insurance company, for its part, is interested in paying as little for a medical service as possible. In order to prevent such disputes from occurring, and to protect insured patients’ health from harm, such rules of the game must be established that will be favorable for every party.
- But, if there is competition between insurance companies and no regional monopolies exist, it would be in their interest to settle such disputes between each other, without the interference of the state.
We will have virtually no regional monopolies any longer. No matter which insurance policy you hold, you will be treated at a district hospital. There may be problems in individual cases, but that is what happens today. The state spends a lot on insurance for citizens and is also obliged to track whether citizens receive medical service commensurate with that amount.
- The action plan refers to “wise regulation.” Could you provide more details? What does that imply?
Standards must be established in clinics, and we must evaluate to what extent the quality of service provided complies with those standards. In older hospitals, it was easy to “regulate” because grave conditions and quality were conspicuous. In newer hospitals, where license requirements are observed and medical equipment operates smoothly, wise regulation is needed for the quality control of service. An essential part of that regulation will be the introduction of protocols in hospitals. These are standards of treatment establishing what specific procedures must be undertaken in case of this or that disease. Thus, we will be able to control easily whether or not everything has been done for the treatment of a patient.
That is favorable for doctors and paramedics – no one will challenge that they have not done everything necessary for a patient. If a patient files a complaint against medical personnel, they will refer to the protocol which is recognized by an association in the relevant field.
On the other hand, that will be advantageous for insurance companies by enabling them to control easily the fulfillment of a contract with a hospital. Where a protocol is introduced, it is easy to establish a tariff for treatment as well.
- Given that the state assumes quite a responsibility in the health care sector, can it be said that the main goal of health care policy remains the liberalization of the service sphere? I mean, freeing hospitals from state management too?
Of course, it does. We should, however, not forget that there is public health care – the spheres which state management will never let go. Psychiatry and AIDS will always remain in the hands of the state. In other cases, that is exactly what happens – hospitals are independent business entities.
- Let us touch upon the pharmaceutical sphere as well. The former Minister of Health, Andria Urushadze, told Tabula that work on deregulation of the pharmaceutical market would continue. That reform has already brought about result – competition and the emergence of new drugstores have pushed prices down. How do you view that process?
That policy will continue in that direction. We see one important problem in this area: Medicines have become cheaper in some cases by as much as thirty percent, but the medication share of the total health care expenditure is still disproportionally high. By liberalizing the market, we must achieve a decrease in the medication share of total health expenditures and an increase in the share of in-patient service. Grave illnesses must be detected at initial stages.
- What is your vision concerning the labor relationship?
We have a liberal Labor Code. Georgia needs fast economic growth. We respond to the problem of unemployment by creating an attractive economic environment for investors which generates new jobs. Had we not had an attractive market and investments, we would have had no budget revenues for health care expenditures.
Nevertheless, we may still need to reassess the situation in this area in the future. We shun excessive regulation, but, wherever it is needed, we are prepared to consider any proposal. However, at this stage, we think the Labor Code meets the requirements of the country.
This article first appeared in Tabula Georgian Issue #96, published 16 April 2012.