Industry Trend Analysis - Changes To State-Funded Healthcare To Boost Access - AUG 2017

BMI View: Funding issues have plagued Georgia ' s healthcare system since the introduction o f its Universal Healthcare Program in 2013. A set of reforms was introduced in May 2017 that aim s to improve the efficiency of public funds by differentiating state-funded coverage by income level. Although growth will remain restrained in a regional context, we anticipate that these reforms will improve healthcare access and quality to the wider population.

Changes to Georgia's Universal Healthcare Program, implemented on May 1 2017, will continue the transformation of the state-funded service to redress the funding issues it has faced. While these changes will result in a reduction of government healthcare as a percentage of GDP over the long term, they will result in a more positive outlook for healthcare in the country, both in terms of quality of services provided and access to treatment.

We forecast total healthcare expenditure to increase from GEL2.31bn (USD1.00bn) to GEL2.94bn (USD1.47bn) by 2020, reflecting a local currency compound annual growth rate (CAGR) of 4.9% (7.9% in USD terms). This growth rate positions Georgia as one of the slowest-growing markets in the Central and Eastern Europe region on account of the funding issues faces by the state, as well as the declining population size. The high contribution of private spending to total expenditure (78.2% in 2016) will also cause a headwind to growth given the weak purchasing power of the population.

Improving Growth Outlook
Georgia - Healthcare Expenditure Breakdown (GELbn)
f = BMI forecast. Source: World Health Organization (WHO), BMI

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