What is the price of price inspection

Bondo Jgenti

In pre-election demagogue politicians often use healthcare as a slogan of free medical service while avoiding serious consideration of difficult, poignant and problematic issues.

Yet, everyone feels that medical aid can not be completely free of charge. The main thing is to make medical aid affordable for all citizens. National insurance derives 40 millions from municipal institutions, but in reality no one knows what the amounts are spent for. It is high time for the private insurance to enter healthcare system along with the national one. Private insurance companies became more active and healthcare became compulsory for private sector, too.
On the one hand, Georgia inherited more or less organised hospitals, laboratories and medical institutions of the Soviet Union, on the other hand, it inherited 48 thousand qualified medical staff. Yet, nowadays Georgia needs only 8 thousand doctors for providing medical services to the population. The number is calculated in accordance with the International Standards. Georgia needs only 30-40% of the hospitals or, to be more exact, of the present medical centres. There arose the problem of extra 40 thousand doctors and 60% of hospitals. Yet, great amounts of money are required for maintenance, repair and salaries of medical staff. Thus, medical institutions should get rid of extra staff and property through competition. With this purpose, it is important to make investments in medical institutions. However, here we encounter with a property problem. A mistaken decision was taken in the past. It said that medical institutions were not subject to privatisation. However, supervisory council members still manage property of medical institutions. Hospitals are leased for 30-50 years, i.e. they are privatised secretly. The supervisory council members do not have the real right to make investments, which results in a distorted form of private clinics. Yet, this does not concern all clinics. Therefore, healthcare reconstruction will not progress unless the property problem is settled.
We do not mean that a country should not have national municipal hospitals. All cities as well as Tbilisi should have such hospitals. There should be a four-type restructuring of hospitals following the settlement of the property problem.
The first type will cover hospitals and medical institutions financed by the City Executive Board from local budgets. Salary in such institutions will be much lower than in private clinics. They will serve socially unprotected and poor population. Citizens with incomes lower than subsistence minimum will be provided with insurance. They will be provided with treatment at the expense of state. According to preliminary estimations, A type institutions will make up approximately 10-15%. B type will include private medical institutions that will work in co-operation with insurance firms. Thus, an insurance firm will undertake healthcare process. If healthcare is completely entrusted to B type institutions, this will result in high prices and taxes unaffordable to population.
The third direction is the most important one. It includes C type well-paid hospitals. The most difficult operations will be made in such hospitals. Perhaps, the hospitals will also use the help of foreign specialists. Insurance firms will co-operate with the hospitals. Insurance firms will offer customers high-quality medical service of mixed type. Thus, part of treatment costs will be paid by insurance firms, the rest costs will be covered by a patient.
The fourth-type D hospitals will offer special medical treatment, for instance, transplantation of organs, important bio-chemical operations, etc.
Medical service should be divided into four types provided that A type hospitals will proceed with free-of-charge treatment (different from what it is now with hospitals allegedly offering free service) of oncological diseases of little children, families with many children and with no livelihood. Medical aid will be offered to the rest of people on the basis of private insurance. If the above-mentioned health insurance plan is implemented, Georgia will have enough funds for insurance process. A greater part of social taxes is concealed due to the high tax rate. Therefore, a single employment tax should be introduced. The employment tax will include four elements: income, social and insurance tax (this concerns private insurance and pension insurance). The amount of the four elements should not exceed 18% of a person’s income. In this case there will be full legalisation of employed population. An employer will find it hard to conceal incomes, if we introduce single tax, with income share being 8% ,with 4% social taxes, 2% insurance and 2% pension tax thus totalling 16-17%. This will, certainly, cause labour legalisation.
Today, 3-4 pensioners fall at the share of one employee in our country. First of all, it is necessary to determine the exact number of pensioners and then to use labour legalisation method. After that we will receive a picture very different from the present one. The correlation will be as follows: 4 employees per 4 pensioners. This would be endurable. As a rule, 2 pensioners should fall at the share of 4 employees. Economic theory or practice could not think of a better development way for humankind.