Since the inception of health reforms in Georgia in 2013, the Government has striven to improve access to quality care. In alignment with WHO's universal health coverage (UHC) guidelines, the country aimed to minimize financial hardship by increasing the share of the population with publicly financed health coverage and decreasing reliance on out-of-pocket payments (OOPs). Efforts led to OOPs dropping from 73% in 2012 to 40% in 2022.[1] Despite this success, key issues like balance billing - where healthcare providers were allowed to bill patients for the difference between the provider's charge and the amount covered by the government funded program - and unregulated medicine prices remained, contributing to financial hardship for many people in Georgia. To combat these issues, in late 2022 and early 2023, the Government rolled out two pivotal reforms: a reference pricing system for medicines, and the abolition of balance billing in hospitals as part of a provider payment reform to introduce Diagnosis Related Groups (DRGs).[2][3] According to reports from the Georgian Government, these measures have significantly reduced medicine prices and patient co-payments for inpatient care (which decreased from 27 percent of the total cost of inpatient care in 2022 to 10% in 2023), alleviated financial hardship, and increased funding for hospital services in 2023. [4] This is in line with SDG 3.8, which aims to ensure that everyone can use quality health care without experiencing financial hardship, which is included in the United Nations Sustainable Development Cooperation Framework in Georgia. These measures are also an example of putting “Delivering United Action for Better Health – a strategy for collaboration between the WHO Regional Office for Europe and Member States in the WHO European Region,” into practice, tailoring WHO’s support to the country’s needs, balancing responsive support with longer-term strategic goals.

-Ilia Ghudushauri, Deputy Minister, Ministry for Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs, Georgia

In late 2022 and early 2023, the Government rolled out two pivotal reforms to address these challenges: 1) introducing a reference pricing system for medicines and 2) abolishing balance billing for hospital care as part of a provider payment reform to introduce Diagnosis Related Groups (DRGs). [7] WHO Georgia conducted analyses, drafted reports, spearheaded policy dialogues with the Government and international experts, and offered technical support in rolling out these reforms. WHO also collaborated with partners, notably the World Bank, on these matters. The subsequent drop in medicine prices for patients was so significant that it contributed to a reduction in Georgia's overall inflation rate, as noted by the World Bank.[8] The list of reference-priced pharmaceutical products continues to grow, now encompassing over 2300 medicines, including antihypertensive, anticoagulant, antihistaminic, antibiotic, gastrointestinal, analgesic, anti-inflammatory, and oncological medicines.[9]

The new hospital payment system standardizes pricing for priority population groups and curtails balance billing.[10] The success of the reference pricing and DRG payment system, coupled with the elimination of balance billing, is credited to several factors: a commitment to increased health funding; robust national leadership aligned with UHC goals; unwavering political commitment from both the Minister of Health and parliamentarians; strategic guidance and policies from WHO; an effectively managed and transparent price regulation system ensuring monitoring and enforcement and therefore distributor and pharmacy compliance; and the synergistic collaboration between stakeholders and development partners. Notably, the implementation of reference pricing and DRGs is tied to disbursement linked results for loan and grant allocations by the World Bank and the Asian Development Bank (ADB).

WHO's efforts in Georgia were anchored in the WHO Biennial Collaborative Agreement (BCA), which prioritized reducing financial hardship and enhancing access to medicines. By implementing these changes, Georgia has made significant strides in making health care more affordable for people, potentially serving as a model for global initiatives