Strategic Report 01 Overview 02 03 04 Performance Indicators (“KPIs”) for service providers. It is also Polyclinic (outpatient) expected to increase the quality of services for patients since only The number of outpatient encounters per capita has increased over the providers who have enough experience would cater to the the past decade from 2.0 in 2007 to 3.5 in 2017, but remains still low population within the UHC. compared to the EU and the CIS, with average encounters of 7.04 • The number of GHG’s beds is growing in line with its and 8.9, respectively.4 expansion strategy. • Increased competition is mainly coming from small and The outpatient clinics segment remains highly fragmented (with medium-sized hospitals. none of GHG’s competitors having more than 1% of the market, with Group’s own market share at c.3%) and underdeveloped in Georgia for several reasons. Historically, patients in Georgia have preferred Bed market dynamics 20161 20172 20183 hospitals, which are associated with a better reputation and a higher Total number of beds 10,948 12,284 13,352 quality of services. The widespread practice of self-treatment and low Competitors 8,391 9,270 10,032 health awareness also contribute to a lower number of outpatient GHG 2,557 3,014 3,320 visits as compared to the developed countries. In the next few years, however, the trend may reverse, since the Government is aiming to GHG market share 23.4% 24.5% 24.9% pay more attention to this segment, increase administrative oversight on prescriptions practice and favour primary care, which is expected to provide a boost for the number of outpatient visits. Progress in Georgia in respect of the provision of inpatient and outpatient services over the last decade The number of hospital discharges has increased by 59% since 2008 Outpatient visits per capita, Georgia Number of surgical operations at outpatient, Number of surgical operations at hospitals, Georgia (thousands) Georgia (thousands) 4.5 3.93.93.5 120 300 268.1 3.5 101.6 105.6 246.5 3.5 3.3 102.1 250 253.6 2.8 90 78.7 189.5 2.3 2.52.5 68.6 200 165.7 2.5 77.3 204.6 60 150 134.9 1.5 47.6 143.3 100 123.9 30 34.4 37.7 0.5 50 0 0 0 Source: NCDC Long-term, high-growth prospects Outpatient visits per capita by country, Per capita expenditures on healthcare by Bed occupancy rate by country, 2014-2016 2014-2016 country, 2014-2016 (%) 10.0 9,403 8.4 88.088.3 3,935 7.4 .767.970.2 1,611 64.865.0 67 49.050.0 53.4 3.94.04.1 4.4 3.2 893910 2.5 568570 324 456 228 75 0 0 0 Source: Frost and Sullivan. 1 NCDC, data as of December 2015, updated by GHG to include the changes before December 2016; excluding speciality beds. 2 NCDC, data as of December 2016, updated by GHG to include the changes before December 2017; excluding speciality beds. 3 NCDC, data as of December 2017, updated by GHG to include changes before 31 December 2018; excluding speciality beds. 4 WHO 2014-2015. 29 acirfA htuoSdnaliahT9002aigroeG0102SU1102EAU2102aisyalaM3102dnaloPyekruT4102aissuR510261027102aidnIdnaliahT9002aigroeG0102aisyalaM1102yekruT2102acirfAhtuoS3102aissuR4102dnaloP5102EAUKU6102SU7102dnaloP9002EAU aigroeG0102SU1102acirfAhtuoS2102aisyalaM3102yekruT4102dnaliahT5102aissuRKU61027102