The publication aims to analyze hospital financing and delivery of inpatient services, financial requirements of the hospitals, and their ability to meet these determinant requirements. There were different types of methods used during this work. By means of standardized questionnaire data on financial performance of 41 hospitals were collected. Patient survey, group discussions with hospital administrators, and interviews with policy-makers were also used. As a result it appeared that thirty-three hospitals were unable to recover full costs, and 29 were unable to recover full costs excluding capital consumption cost. Medium-sized hospitals recovered only 63.5% of full costs. They employed salary equalization policies, which increased the share of fixed costs, perpetuated the oversupply of medical personnel, and yielded low pays. Hospitals charged in excess of their officially accounted costs but, and due to the low collection rates, cost recovery rates were below the officially accounted costs (87.6%).In conclusion it can be said that low official reimbursement rates and patient unawareness of official hospital costs creates conducive environment for shifting major turnover of the real hospital costs to the patients, resulting in illegal patients charging.

Authors:Avtandil Jorbenadze, Akaki Zoidze, David Gzirirshvili, George Gotsadze.

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