Reforms implemented in the health care system of Georgia in 2008-2010 were intended for the creation and support of a competitive environment in the medical marker. Since 2010 competitive health insurance has been changed by a monopolistic system of insurance companies within one corresponding region. The goal of the research is to study the reasons for transferring from a competitive to a monopolistic health insurance system.
The advantages of the competitive insurance model were expressed after the reforms implemented in Georgia in 2008-2010.The competitive insurance model increases the free choice of the insurer by insured ones. Free choice of the customers stimulates the insurer to consider customers’ preferences and conclude selective contracts with the providers of medical services who deliver high-quality services for relatively low prices. This motivates physicians and hospitals to improve the quality and decrease prices continually.Free choice of insurance funds stimulates the activity of insured ones between the funds. The insurance funds having less financed medical services or low-quality services, in addition to the basic insurance policy, lose their insured ones.
The competitive insurance model positively affects the quality of medical service. These are conditioned by the right of the insurance company to choose the provider of desired medical service. In such cases the physicians and hospitals have more motivation to improve the quality of medical service as their choice and correspondingly conclusion of the contract is implemented by the quality indices developed in advance. The policyholders try to assess critically the services suggested by each insurer and make the decision themselves to choose the desired insurer. The medical organization itself tries to deliver the patient a high-quality service.
During the competitive insurance model between the government and the deliverers of medical services, there are insurance companies widely using the method of monitoring and management of delivered medical servicesforthe purpose of controlling and holding the expenses. One of such methods is request management meaning the activities in the future affecting the requests for medical services. Insurance companies try to control services in order to hold expenses, for which they study in detailthe prolongation of hospitalization, also, complex chronic high-cost medical services.
A competitive insurance system positively affects the transparency of insurance policy and awareness of insured ones needed for the customers to compare existing insurance products and choose products desirable for them. Transparency of medical services is obligatory for insurers and providers of medical services to agree on the price and the quality.
After 2010 competitive insurance model was changed by the regional monopolistic insurance model.Thus the right of free choice of insurers and providers was limited by the users of the healthcare program. As the result of changes implemented in 2010 the market relations formed since 2008, environment, roles, and functions significantly changed. A beneficiary of a state program lost not only the right of choosing an insurance company but also a quite significant right – to choose a hospital him/herself as the patient had to use only the services and conditions of the insurance company, clinic, and the physician acting in his/her region, as this opposed the law on “Patient’s rights”. Competition between insurance companies disappeared. Insurance companies became monopolies in corresponding regions. These changes returned the insurance system to the form unacceptability of which somehow became a background for the decision tocancelthe monopolistic insurance system.
The system where one insurance company acts in each region is a single-payer system as the patient has a relationship only with the insurance company presented at inhabiting area. Thus, the insurance company is in a monopolistic condition. In a non-competitive environment, the insurance company tries not to compensate medical staff services as on the medical market it does not have competitors. The medical staff itself is forced to conclude a contract with the insurance company on any compensation rate as it does not have another choice. All the abovementioned negatively affected the quality of medical service and patient satisfaction.
low level of insurance education greatly affected the cancellation of a competitive insurance system. It is also important that, despite other factors, the low number of references to the physicians was conditioned by the uncomplimentary physical condition of old medical institutions. As the result, the collection of insurance vouchers for insurance companies from the insured population and increasing the number of insured ones were practically risk-less practices. In conditions of a low reference number of insured ones “the loss” was low as well. Thus, the effort of insurance companies was not directed to the delivery of qualitative medical service but just to attract more and more insured ones and correspondingly get more vouchers.
The reform was negatively affected by the fact that the insurance premium determined by the government did not correspond to the risks and its calculation was not conducted by urgent calculation rules. In their opinion, in the countries where the competitive insurance model works different variations exist. So when implementing the competitive model the specificity and the peculiarities of the country must be considered.
Competitive health insurance increases the quality of medical services, positively affects effective management of insurance programs, and reduces healthcare expenses. The regional single-payer insurance model restricts the right of free choice of insurers or providers and it negatively affected the satisfaction of the insureds.When introducing the competitive model specificity of the country, its peculiarities must be considered.

Keywords: Managed competition, competitive insurance model, non-competitive insurance model, informing the insured.
JEL Codes: G22, I10, I11, I18

References:
• Verulava T. (2014). Regulirebadi konkurentuli sadazrvevo modelis evropuli gamocdileba da saqartvelos reformebi [European Experience of Regulated Competitive Insurance Model and Georgian Reforms. Collection of Materials of the International Scientific Conference "Actual Problems of the Development of Economics and Economic Science". Ivane Javakhishvili Tbilisi State University, 323-326]. (in Georgian).
• Verulava T. (2017). Shezguduli konkurencia jandacvis bazarze: gadawyvetis gzebi. [Limited Competition in the Healthcare Market: Solutions. I International Scientific Conference "Competition Policy: Modern Trends, Challenges". Ivane Javakhishvili Tbilisi State University] (in Georgian).
• Asatiani M., Verulava T. (2017). Georgian Welfare State: Preliminary Study Based on Esping-Andersen’s Typology. Economics and Sociology, 10 (4): 21-28.
• Chanturidze T., Ugulava T., Durán A., Ensor T., Richardson E. (2009). Chanturidze T., Ugulava T., Durán A., Ensor T., Richardson E. (2009). Georgia: Health System Review. Health Systems in Transition, 11(8):1–116.
• Enthoven A. C. (1993). The History and Principles of Managed Competition. Health Affairs, 12(1):25-48.
• Enthoven A. C. (1989). Effective Management of Competition in the FEHBP. Health Affairs, 5;33-50.
• Enthoven A. C., Baker L. C. (2018). With Roots In California, Managed Competition Still Aims To Reform Health Care. Health Affairs, 37(9):1425–1430.
• Gabrichidze S., Kechinashvili G., Baker S. (2011). Georgia Health System Strengthening Project. Washington DC: USAID.
• Greß S. (2006). Regulated Competition in Social Health Insurance: a Three-Country Comparison. International Social Security Review, 59(3):27–47.
• Hauschild T., Berkhout E. (2009). Health-Care Reform in Georgia. A Civil-Society Perspective: Country Case Study. Oxfam International Research Report.
• Heinemanna S., Leiber S., Greßa S. (2013). Managed Competition in the Netherlands - A Qualitative Study. Health Policy, 109:113–121.
• Miller R. H. (1996). Competition in the Health System: Good News and Bad News. Health Affairs, 15(2):107–20.
• Richardson E., Berdzuli, N. (2017). Georgia: Health System Review. Health Systems in Transition. 19(4):1–90.
• Roeder F. C., Urushadze A., Bendukize K., Tanner M. D., Given C. (2014). Healthcare Reform in the Republic of Georgia: A Healthcare ReformRoadmap for Post-Semashko Countries and Beyond. CreateSpace Independent Publishing Platform.
• Shmueli A., Stamb P., Wasemd J., TrottmannM M. (2015). Managed Care in Four Managed Competition OECD Health Systems. Health Policy, 119: 860–873
• Van de Ven WP., Beck K., Buchner F., Schokkaert E., Schut FT., Shmueli A., Wasem J. (2012). Preconditions for Efficiency and Affordability in Competitive Healthcare Markets: Are they Fulfilled in Belgium, Germany, Israel, the Netherlands and Switzerland?
• Van de Ven W. P., Van Vliet R. C. (1992). How Can We Prevent Cream Skimming in a Competitive Health Insurance Market? Developments in Health Economics and Public Policy, 1:45-65.
• Vries H., Vahl J., Muris J., Evers S., Van der Horst H., Cheunge KL. (2021). Effects of the Reform of the Dutch Healthcare into Managed Competition: Results of a Delphi Study Among Experts. Health Policy, 125:27–33
• Van de Ven WP., Beck K., Buchner F., Schokkaert E., Schut FT., Shmueli A. (2013). Preconditions for Efficiency and Affordability in Competitive Healthcare Markets: Are they Fulfilled in Belgium, Germany, Israel, the Netherlands andSwitzerland? Health policy, 109(3):226–45.
• Verulava T., Jorbenadze R., Barkalaia T. (2017). Introduction of Universal Health Program in Georgia:Problems and Perspectives. Georgian Medical News, (1):116–119.
• Verulava T., Lordkipanidze A., Besiashvili N., Todria M., Lobjanidze Z., Jorbenadze R., Eliava E. (2019). Obstacles in the Development of Nonprofit Hospitals in Georgia. Hospital Topics, 97(2):39-45.
• Verulava T., Maglakelidze T. (2017). Health Financing Policy in the South Caucasus: Georgia, Armenia, Azerbaijan. Bulletin of the Georgian National Academy of Sciences, 11 (2): 143-150.
• Zoidze A., Rukhazde N., Chkhatarashvili K., Gotsadze G. (2013). Promoting Universal Financial Protection: Health Insurance for the Poor in Georgia–a Case Study. Health Research Policy and Systems, 11 (1), 45.