This paper focuses on the specificdimension of informal payments by health users in Georgia, agrowing pattern within many ECA (East Europe and CentralAsia) countries. Using newly collected data from in-depthinterviews and focus groups in rural and urban areas of thecountry, it investigates the determinants of out-of-pocketpayments for health services that are supposed to bedelivered free of charge under the Georgian Basic BenefitPackage (BBP). The study finds that the demarcation betweenformal and informal components of these Out-of-Pocketpayments is extremely imprecise because of: (a) the spreadof "health rights unawareness" around the countryand, (b) the prices outside the BBP differ from provider toprovider. The study also found that some informal paymentsare based on cultural/social patterns ingrained in theGeorgian tradition. Georgian now about the low health sectorsalaries and compensate the doctors with small payments.Finally, some recommendations to help the Georgiangovernment to break the vicious cycle (excess capacity,decreasing demand of health services, lack ofaccountability) are proposed in this study, includinggreater role of the government in leading reforms, and thewider participation of the private sector in designing newgovernance arrangements in the future.