Out-of-pocket and informal payments in health sector: evidence from Georgia

This study presents an in-depth investigation of out-of-pocket payments for health services, formal and informal, in the Republic of Georgia. The main purpose of the study is to: (a) analyze the process of collection and distribution of out-of-pocket or direct payments and particularly of the informal component; (b) explain why they seem to be so prevalent; (c) investigate their consequences, especially on access and quality of health care services. The findings of this study are derived from in-depth interviews and focus group discussions with users as well as providers. The study found that in general paying for health services in Georgia has become a really common and mostly accepted practice, and that a significant share of these payments are completely unrecorded. The extent of direct payments for health services are producing severe consequences on both equity and efficiency, making services unaffordable for most people, and leading to under funding of essential inputs. The policy implications of the study findings are challenging. First, the study clearly points out the deep-rooted and multidimensional reasons why out-of-pocket payments are pervasive, and why an important share of them is collected informally. Second, the study highlights that there is no simple solution. In particular, some of the solutions frequently proposed in the international debate, such as simply formalizing user charges, in the Georgian context appear impractical.