Forum “Investments into the healthcare of the Republic of Kazakhstan” Astana, Republic of Kazakhstan 30 November, 2017

By Andrew UrushadzeFormer Minister of Labor, Health and Social Affairs of Georgia

Public and Private Partnership for Universal Healthcare. The Georgian case.

Partners:Asian Development Bank The World Bank European Bank forReconstruction and Development Kazakhstan PPP CenterRepublican Center for Healthcare Development

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Why health reforms?

PPP in Hospitals: international experience

Country profile

Health reforms: impact on access & quality

Transforming healthcare system: PPP in Georgian healthcare.

Contents

Health reforms chronicles

Health reforms: lessons learnt

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Georgia. Country profile

• Country Data

• Size: 69,700 sq km

• Population (2015): 3,7 million inhabitants

• GDP (2016): 14333 mil USD

• GDP per capita (2016): 3852,5 USD

• Healthcare Expenditure (% GDP)

• 2016: 8,5%

• Healthcare System

• Universal coverage

• Financed by general taxation

• PHE 2,8%;

• OPP 65 %

• Most hospitals and primary care centres are private

• Doctors and nurses 4.3 and 3.2 per 1000

• Hospitals beds 3,13 per 1000

• Main health indicators

• Life expectancy 70 &79

• IMR 8,4 %; U5MR 10,2 %

• MMR 32%

Total area:Geographical position: Georgia is located in on the border of Europe and Asia, bordering the Black Sea, between Turkey and Russia.

90% of OOP payments 65% was paid informally

Why health reforms? Georgian healthcare in 2003

Percentage of paying informally, 2001

per capita Health Expenditure $11 (in 2000) 77.5% of individuals reported were unable to afford or attend a skilled health

worker (in 2001) The highest probability among NIS of informal payment or a gift 65%. Bed Occupancy rate became alarmingly low at 27.6%. the lowest acute care hospital admission rates 6.3 per 100 people 17 European

Region and 20,7 in CIS Average monthly salary for physicians 10 USD in 2003

GeorgiaKazakhstan

Why health reforms? Georgian healthcare in 2003

Indicators of financial inaccessibility, 2001

94% of Georgians could not afford care

Declining life expectancy: a person born in Georgia in 2003 can expect to live 71 years on average

Infant Mortality Rate 20.1 in 2002 U5 Mortality Rate in 2001 27.6 Deaths caused by cardiovascular disease increased by 35% The overall age-adjusted mortality rate increased by 18% Rural- urban and poor -rich inequality -low income individuals were exposed to

unreasonable levels of morbidity and mortality

Why health reforms? Georgian healthcare in 2003

excessive and obsolete medical infrastructure, only 5% of ambulatories hadbasic equipment; old and outdated buildings, inappropriate equipment, poorsanitary facilities; an inefficient financing model with up to 70% of informalpayments, and an inadequate regulatory system. Doctor – Patient - Society -all were dissatisfied with the existing situation

In January 2007, the Georgian government approved the HospitalDevelopment Master Plan.

The master plan determined Georgia’s total hospital capacity and the

optimal location for inpatient facilities based on geographic

accessibility in a 45-minute radius.

An estimated 200 million USD were expected to be invested inhospital real estate during first two years and up to 700 million USD inthe following five.

New standards for licensing hospitals were approved. The number of business activities subject to licensing and permit regimes was reduced by 84%.

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Health Reform Chronicles: Hospital Development Master Plan.

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Main principles of Hospital Development Plan 2007-2012

Private service provision based

on PPP

- Government should concentrate

on its core functions;

- Private health service provision

proved more effective in Georgia;

- Demand driven vs. supply driven

approach

Geographic accessibility to quality

hospital services

- Hospitals will be located in all

districts of Georgia;

- 90% of population will have access to

hospital care within 30 minutes of reach;

New hospital infrastructure

- Above 70% of health care facilities

in Georgia are older then

40 years. Rehabilitation in this case

is not worthy;

- New buildings provide for rational

planning and long term

compliance;

Volume of investments ensuring cost

stability

- excessive investments stimulate

increase of hospital service costs,

diminish accessibility and erode capital

and human resources;

Health Reform Chronicles

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Health Reform Chronicles: procuring the private contractors

All procurement were based on competitive bidding; Exclusions were made only for the medical staff working in the same clinic. They had preferences in big cities;

Tender specifications stated the desired end goal and the bidders were invited to propose solutions;

In April 2010, the country outside of the capital was divided into 26healthcare districts, and insurance companies were invited tocompete for the opportunity to provide plans to the eligible poorfor a period of three years in each of the districts and to renovate,build, and operate hospitals in these health districts.- During 15 months 46 rayonal and regional clinics were build out total 253 (2013)

with the total number of 1244 (11%) hospital beds out of total 1160 (2013).

Georgia’s Hospitals in 2007 Georgia’s Hospitals in 2012

Hospital Development Plan - results

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Up to 150 new hospitals of all sizes had beenbuilt and opened for operation.

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More than 800mln USD was invested by private sector in hospital sector development and PHC facilities by using different models of PPP and with no cost for the state

Inefficient financing model with

up to 70% of informal payments

a Pluralistic and Regulated System with the Participation of a Diversified Range of Providers

Excessive and obsolete medical infrastructure, monolithic, and BureaucraticSystem

old and outdated buildings, inappropriate equipment, poor sanitary facilities

Inadequate regulatory system. Badly paid, unmotivated, demoralized health professionals

Health Reform Chronicles

Corporate Management Modeland a New Health Financing system

Georgia Hospital development Plan 2007-2012 : District Hospitals Before and After

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Health Reform Chronicles: PPP in Primary health Care

For the end of 2012 in most rayon of Georgia were functioning well equipped,privately managed medical centers with integrated inpatient and out-patientservices. Village family doctors became private entrepreneurs, directlycontracted by state agency, or private insurer

in 2004-2011 almost 1726 General Practitioners s and 1771 General nurseshave been trained.

Number of GP per 100 000 population has increased from 264 in 2000 to 2091in 2012, from 6, 0% to 46, 6%

% of population addressed outpatient clinics for their services increased from24% (2001) to 83%

"I’m impressed by the reforms that are being implemented inGeorgia. The country is going in the right direction. I’ve said itmany times and I’ll repeat it that Georgia with the reforms ithas implementedmust be an example for other countries.”

Zsuzsanna Jakab

WHO Regional Director for Europe 2016

"Georgia has shown how it can take decisive action and turntrends around in a very short period of time,"

Hans Kluge

Director of the Division of Health Systems and Public Health at WHO/Europe, 2016

Georgian Health Profile after the Reforms

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Georgia has enjoyed impressive economic growth from the early years oftransition largely due to a wide range of reforms. GDP per capita has increasedfrom 690 USD in 2000 to 3597 in 2013

Economic growth was paralleled with progress in poverty reduction. The povertyheadcount has decreased considerably, falling from 21% to 14.8%. Extremepoverty has declined as well, falling from 6.7% in 2010 to 3.7% in 2012 andpoverty severity has fallen

Georgian reforms: impacts on poverty

Percentage of population covered by health insurance in Georgia(Government, private, or employer) %

Consumption Quintile

Year Total Poorest Second Third Fourth Richest

2007 14.1 18.5 14.8 12.5 14.4 8.6

2010 29.5 39.84 31.06 26.6 23.7 26.21

2012 56.7 N/A N/A N/A N/A N/A

2014 99.9 100 99.98 99.86 99.8 99.9

All citizens are provided with basicmedical services. About 3.2 millionpeople are involved in the UniversalHealthcare Program while 530,000are on private or corporate PHI

Georgian health reforms: impact on access

Over 90% of population benefits from universal health care

Public Health Expenditure trends, 2001-2015

Out-Of-Pocket Payment (OOP) on health as % of Total Health Expenditure

Life expectancy at birth in countries in the European Region, 2015

The average lifespan for Georgian women in 2012 was 79 years, and for men – 70 years

Georgia

Infant mortality in the FSC, 1990-2015

In Georgia, infant mortality rate has decreased from 25 deaths per 1000 infants in 2003 to 8,4 deaths in 2014

Georgian health reforms: impact on quality

Georgia

After the Georgian healthcare reform, mortality frischemic health diseases for under 65s has decreased and eventually it equaled EU average in 2010

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Maternal mortality in the former soviet countries, 1990-2012

Georgia has reduced maternal mortality rate per 100,000 live births (MMR) by more than half from 49.2 in 2000 to 22.9 in 2012

Mortality from ischemic health diseases for under 65, 1990-2012

Georgian health reforms: impact on quality

Mortality from diabetes under 50s in FSC and EU,1990-2011

Mortality from TB under 65s in FSC and the EU, 1990-2012

Georgia

By 2010 mortality from diabetes under 50s in Georgia was the same number as in the EU

universal access to TB diagnosis and treatment, including MDR-TB control interventions since 2008. The new TB cases per 100,000 population decreased from 96.5 in 2000 to 84.1 in 2012 and the prevalence in the same period fell from 133.4 to 110.7

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Georgian health reforms: impact on quality

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Georgian health reforms: lessons learned

Effective and sustainable legal and regulatory structure is essential forpromoting and fostering successful PPPs

The progresses in health sector were the part and continuation of thecountry's bold liberal reforms in the political, economic and social sphere

Taxes and Customs reforms

Police Reform

Energy Sector

Deregulating

Business

Reform of

public

Services

Social Sector Reform

See for more details: 1. http://documents.worldbank.org/curated/en/518301468256183463/Fighting-corruption-in-

public-services-chronicling-Georgias-reforms2. http://reformatics.ge/minfo/723. https://docuri.com/download/healthcare-reform-in-the-republic-of-georgia-a-healthcare-

reform-roadmap-for-post-semashko-countries-and-beyond_59c1e3a2f581710b286ac9ed_pdf

Georgia rank higher than 19 Eastern European andCentral Asian countries. The country also achievedbetter results than several European Union (EU)member states, such as Hungary, Slovakia, Croatia,Bulgaria, Greece, Italy and Romania.According to the 2016 Corruption Perceptions Indexreported Georgia is the 44 least corrupt nation out of175 countries;

Corruption Perceptions Index reported by Transparency International

Georgia is the first worldwide in regards with the progress madein the fight against corruption and regulatory quality (whichcaptures perceptions of the ability of the government toformulate and implement policies and regulations for promotingthe private sector development).In number of indicators Georgia stands higher in the rating thansome of the central and Southern European Countries such as: TheCzech Republic, Slovakia, Italy, Greece, Macedonia, Hungary,Bulgaria and etc..

http://info.worldbank.org/governance/wgi/index.aspx#home

Georgia in World Governance Indicators 1996 - 2014

Corruption in public sector is ranked as the most important barrier for health reforms

Doing health reforms in any FS countries must be accompanied with anti-corruption measures and capacity building of public sector.

Georgian health reforms: lessons learned

Georgian health reforms: Lessons learnt

More transparency and participation Many stakeholders (the general public, health professionals, non-governmentorganizations) stated that they have not been properly consulted about proposedreforms and of the process by and grounds on which decisions were made

More attention to contract detailsPPPs imply a loss of direct management control by the public sector. Incompletecontracts carry risks of disadvantage. Private sector will do what it is paid to do andno more than that – therefore incentives and performance requirements need to beclearly set out in the contract

More attention to consumers protectionThe transfer of service delivery through private companies required stronggovernment regulators to monitor the performance of private sector and ensure theprotection of public interests. National strategy to address consumer protection and

safety is needed.

What Would I Do Differently if I could travel back in time

The prevailing concept is that in low and middle income countriesprivate providers can play only a supportive role by filling the gaps inan underdeveloped public sector;

The Georgian is the case where private sector works in tandem withthe public sector in helping to achieve universal and equitable access;

Healthcare reform in Georgia is a case example that the private sectorcan have a positive impact and contribute to efforts towards UHC, butonly if it works as an integral part of country health system and in fairlegal and regulatory environment. “Fair” in this context means free fromprejudice, favoritism and self-interest, or better to say corruption

Georgian health reforms: Lessons learnt

PPP in hospitals: international experience

Public-private partnerships can take many forms, each with a different degree ofprivate sector responsibility and risk. A government’s decision on the mostappropriate option will depend on country context and needs, thegovernment’s capacity to regulate and effectively control the quality of care, andthe public consensus on the need for reform – on political feasibility.

Source: J. Barlow. S. Wright. 2012

Sweden’s first PPP building. This public-private-partnership (PPP) between the Stockholm County Council and Swedish Hospital Partners comprised of Skanska and Innisfree will finance, build, operate and maintain the new hospital until 2040.

Area: 320,000 sq m Floors: up to 12 Rooms: approx. 10,700 Beds, inpatient care: 550, plus a 100-bed patient hotel Operating rooms: 36 Radiation therapy rooms: 8 Out-patient clinic rooms : app 168

Sweden, New Karolinska Solna (NKS) - the world’s largest PPP hospital

Hospital de la Ribera: Spanish pioneer of the PPP model.Concession Case In the Alzira Health District the Valencia Health Department (VHD) allows for newhospitals to be privately financed, constructed, and managed by a consortium of private firms. The VHDpays the consortium an annual capitation fee for residents of the area; it also pays a DRG fee for patientswho come from outside the catchment area. Since April 2003, new agreements have shifted focus to anintegrated delivery system and an increased capitated payment to cover the cost of providing primary

care services.

• 301 individual rooms, • more than 2000 professionals • more than 50 specialties< such

as Neurosurgery, Cardiac Surgery, Thoracic Surgery, Plastic and Reconstructive Surgery, Comprehensive Cancer Treatment or Radiotherapy

Spain, Hospital de la Ribera

Australia Mildura Base HospitalThe government selected a private operator to design, build, own, and operate a new, 153-bed hospital under a 15-year contract in 1999. The existing public hospital was closed, and its employees transferred to the new hospital. Capital costs for the new hospital came in 20 percent below those for public sector comparators, patient volumes increased by 30 percent in the first year, and the operator made a profit.

Mildura Base Hospital is a 165 bed tertiaryteaching Hospital. The hospital provides a rangeof Acute Services including Emergency,Maternity, Intensive Care, General Medicine andSurgery, Oncology, Medical Imaging, Pathology,Dialysis, Mental Health (Inpatient andcommunity services) and a range of AmbulatoryServices

Australia Mildura Base Hospital

Transforming healthcare system: PPP in Georgian healthcare

Thanks.Any Questions?