Georgian Hospitals Face Challenges
01 November, 2012
Georgian Hospitals Face Challenges

A wave of the overall protests touched the hospitals across the country as well. The medical personnel discontented by their overdue and decreasing salary and the way the hospitals have been managed by the new owners organized the protest. Protests have reportedly taken place in the Black Sea outlets of Georgia Batumi and Poti, as well as Chiatura [where miners went on strike] and Tbilisi.

Transparency International Georgia (TI Georgia), a non-governmental watchdog, having researched the hospital and pharmaceutical sectors this past

summer, thinks the current situation stems from the large hospital privatization program, the lack of transparency regarding the new owners and their plans, and the lack of sufficient regulation to deal with the resulting problems. TI Georgia calls on the new government to deal with these problems that endanger the quality and sustainability of the health care system in Georgia.   
One of the problems seems at Amtel hospital 1st clinic (previously known as the first clinic) – one of the largest hospitals in Tbilisi - which is currently owned by Daniel Gupta. Daniel Gupta is the director of the Russian-based real estate company Amtel properties that mainly focuses on business centers and hotels.  According to Natalia Gogava, senior specialist of international and public relation of the Health, Pharmaceutical and Social Care Workers Independent Trade Union of Georgia, the medical staff did not receive their salaries for three months and the salary of doctors has been decreasing for the last years. This has prompted several specialists to leave the hospital, resulting in setback in terms of the quality of services at the hospital. What makes worry of the said hospital employees is that their working conditions have not changed for the better. Moreover the future plans of the owners are quite unclear.
Similar problems have been reported in Batumi, Poti and Chiatura, where the medical staff has urged the owners to improve the situation in the hospitals and keep terms of the existing agreements. Several months ago, TI Georgia visited the hospital in Chiatura where found a number of serious problems.
In the maternity hospital in Batumi the staff heard that the building was about to be sold to a private investor, while the equipment was already bought by a company called New Life LTD. The staff, however, did not know who the owner would be and started the protest, demanding more information regarding the plans to sell the hospital. After the protest, the Batumi City Hall announced that the building would not be sold. It is very difficult to obtain information about the New Life company or its owners and their plans.   
In Poti the medical staff claimed that the owners of the company Aldagi BCI did not fulfill their obligations, as the technical capacity to provide emergency medical assistance was still inadequate because of a human resource crisis. They filed the same complaints that TI Georgia had previously heard in various hospitals owned by insurance companies or private investors. It often happens that medical staff receives a different salary each month or do not receive salaries at all for several months and that there is insufficient capacity to maintain crucial services such as emergency care.
“The problems discussed above arise in hospitals in the regions as well as in Tbilisi and pose serious threats to the health care system. The deteriorating position of doctors, the lack of transparency about the privatization process and the plans of future owners, as well as the lack of enforcement of obligations, creates a situation that increasingly undermines the quality of health care,” TI Georgia reports. 
A major problem in this respect is that the privatization contracts of the majority of privatized hospitals only require the new owners to retain the hospital profile for seven years. TI Georgia’s previous research showed that it is unlikely that all the owners, or even the majority of them, will keep their hospitals running past that period of time.  
While the new government cannot be blamed for the current situation, it does have the responsibility to take care of it. TI Georgia therefore calls upon the new government to address the problems described above by creating more transparency in the ownership of hospitals as well as respective the future plans of invetsors.
The expansion of the private sector should be better accompanied by an effective regulatory system to ensure hospitals will sufficiently provide all the services. Setting up a comprehensive database about health providers to provide better insight about the situation within hospitals is a must. Sustainability of hospitals beyond the seven-year period should be guaranteed to prevent hospitals or crucial services from disappearing as well as a better regulatory system ought to be shaped out to hold private investors accountable for their assumed responsibilities.
Currently about 40% of the hospitals in Georgia are owned by insurance companies that trigger conflict of interest particularly in regions where the insurance company-based hospitals are key providers of health-insurance to the clientele of similar insurance company. This negatively affects the quality of services and has often led to cases where patients are denied in the service. One possibility to deal with this is to run hospitals by independent management companies rather than insurance subsidiaries. 
Alternatively, the government could buy the hospitals from the insurers and later sell them to other appropriate investors under better contracts and more efficient regulations.

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