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The Effect of Universal Health Care on the Out‐of‐Pocket Health Expenditures: Evidence From a Natural Experiment

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Listed:
  • Muhammad Asali
  • Valida Pantsulaia

Abstract

In the first two quarters of 2013, the Georgian government introduced and fully implemented a universal health care (UHC) programme covering all those not yet publicly or privately insured. Using panel estimation methods and difference‐in‐differences estimation with synthetic treatment and control groups, we estimate the effect of the UHC programme on the level of out‐of‐pocket (OOP) health expenditures of households. The programme saved households an economically and statistically significant monthly amount of 105 Georgian Laris (64 USD then) per household, amounting to approximately 16% of the average household monthly income at the time. The reduction in OOP payments is almost entirely attributed to people utilising essential, emergency, and life‐saving health services. About half of the resulting increase in household disposable income has been rechannelled to other non‐health expenditures such as transportation, education, clothing, and other household items. All in all, the UHC programme is hypothesised to have improved the overall health status and the quality of life in the country.

Suggested Citation

  • Muhammad Asali & Valida Pantsulaia, 2026. "The Effect of Universal Health Care on the Out‐of‐Pocket Health Expenditures: Evidence From a Natural Experiment," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 34(3), pages 459-473, July.
    • Handle: RePEc:wly:ectrin:v:34:y:2026:i:3:p:459-473
    DOI: 10.1111/ecot.70024
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    References listed on IDEAS

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    1. Belli, Paolo & Gotsadze, George & Shahriari, Helen, 2004. "Out-of-pocket and informal payments in health sector: evidence from Georgia," Health Policy, Elsevier, vol. 70(1), pages 109-123, October.
    2. Erkan Erdil & I. Hakan Yetkiner, 2009. "The Granger-causality between health care expenditure and output: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 41(4), pages 511-518.
    3. Patrick Richard & Regine Walker & Pierre Alexandre, 2018. "The burden of out of pocket costs and medical debt faced by households with chronic health conditions in the United States," PLOS ONE, Public Library of Science, vol. 13(6), pages 1-13, June.
    4. Muhammad Asali, 2018. "Military service and future earnings: Evidence from an Informed Difference-in-Differences (IDID) approach," Economics Bulletin, AccessEcon, vol. 38(3), pages 1583-1589.
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    More about this item

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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