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Levan Kalandadze: Partnership between State and Private Sectors will Boost Medical Sector Development

The Georgian Authorities plan to carry out management of three hospitals in Tbilisi as part of the partnership model between the state and private sectors.

This model was first established in 1980s in Europe and it has become a widely applied and experienced method for managing and developing major facilities.

Economic expert Levan Kalandadze overviews the mentioned issue.

As reported, the three specific hospitals in Tbilisi will be developed under the PPP model. What does this model imply and how would it promote the Georgian health system?

-This is a conceptually new vision and approach in the Georgian health management, on which the Georgian Health system, especially, the hospital sector development strategy will be based.  I mean the PPP model, i.e. the model of partnership between the private and state sectors. This model does not have an alternative, in practice, in terms of current challenges. Investments and involvement promotes the private sector and develops the field. On the other hand, this model enables to maximally meet the public and state interests and implement the components of this policy in terms of hospital sector development.

Should we expect important results from establishment of this model? Do you think this model will lead the Georgian Health System to the correct direction?

The western experience in terms of PPP model application proves that currently the Georgian Authorities have valuably and efficiently determined all priorities from the conceptual point of view. Maximal involvement of public and state interests, on the one hand, and the private sector’s co-participation, on the other hand, along with a high degree of self-control provides excellent opportunity for valuable development of the field.

What are the positive aspects of this model? What is the benefit from bilateral involvement of state and private sectors?

It is wonderful that foreign investors show interest in this sector jointly with our Authorities. The healthcare field is unique in its nature. On the one hand, it is a business direction that creates gross domestic product, pays taxes, employs professionals, but, at the same time, it is an important leverage for the government’s social policy. In this respect, this is a proper investment in the future and this is a way to make the healthcare sector an attractive business field, on the one hand, and to maximally improve and polish and refine the state social policy component. Hence, development of three major clinics will maximally contribute to growing the competition quality.

The competitive environment in the health sector is of crucial importance today amid high inflation tendencies. Competitive environment enables to develop high-technology directions and maximally envision and meet the public interests and needs for optimal pricing.

  • What do you expect from successful implementation and establishment of the PPP model in Georgia?
  • We will receive the so-called cost-efficient model that will guarantee high-quality services for comparatively lower prices. I think the state-announced startups in the form of the mentioned three clinics will be the first step for the state involvement and drawing the private sector’s interest in this field. I believe we follow the proper way. Anything else depends on efficient operation of the Health Ministry and the Government’s economic team, in general.