Cost of Health in Georgia

• Containing healthcare costs remains one of the priority topics of Georgia health system from the perspectives of both the public and private sector. Government expenditure on health has been increasing between 2013-2019 after introduction of Universal Health Coverage program, but with the existing health financing methods (capitation, fee for service, input-based payment covering salaries and fee for medicines, supplies and utilities), the efficiency of increased investment of public financing in healthcare remains questionable. On the other hand, private health insurance sector is developing under the competitive market environment with promising outcomes but claims management is becoming rather challenging.
• Since there is a considerable growth in healthcare expenditure in Georgia, driven by both supply and demand, health system would benefit by implementing alternative payment models that will reduce costs and improve quality of care. As mentioned above, existing health financing methods encourage financial resource growth, but do not stimulate healthcare providers to work efficiently and improve care coordination for delivering quality care.
• A bundled payment is one of the alternative payment methods and is defined as a one-off or periodic lump-sum payment for a range of services delivered by one or more providers based on best practices or by following clinical pathways with an increasing emphasis on outcomes
Bundled payment models’ overarching mechanisms to reduce healthcare expenditure is based on the following:
 By providing a single lumpsum payment, providers assume the risk either individually or collectively for delivering effective and efficient care at a set price.
 This type of payment system encourages providers to carefully consider care options that can decrease the total costs of the bundle while providing equal or more effective treatment
 Providers feel accountable for the quality and cost of care delivered during a predetermined episode.
Impact of bundled payment on health care cost, utilizations and quality
• According to the best available evidence, bundled payment decreases healthcare cost in many of the fields where it has been implemented including orthopedic care (joint replacement, arthroplasty), cardiac care, gastroenterology and oncology (gynecology); except for spine surgery and diabetes care for which the evidence is inconclusive.
• Bundle payment creates financial incentives for providers to coordinate care over the entire episode. Thus, these payment models promote patient care quality through improved coordination between providers by encouraging communication, shared resources, and clinical continuity.
• Besides its strengths, the model has some weaknesses – there is potential for inappropriate treatment owing to perception of constrained resources, in particular, providing care to low-risk patients and denying care to high-risk patients with complicated health history. However, there are counterstrategies to prevent such practice:
o A bundle could be coupled successfully with population-level screening quality measures such as frequency of procedure to standardize some of the variation in provider decisions by specifying services included in the bundle and ensuring that providers are meeting quality thresholds
o Risk stratification must be considered for reimbursement fees per episode of care for higher risk patient populations