Some Explorations of Why the Health Care Market Doesn't Work

There's been a recent series on the Economix blog in the NY Times on some failings of the market in regards to health care.  I disagree with one of the central premises here, I don't think that a moral dimension needs to be introduced to explain the market or its failing.  Though in this recent post it seems to be partially explaining why it works at all as a private market, this seems more plausible to me.  In any case, I think market failure is inevitable due to how the market is set up.  Economix lists a few of these reasons in rather more detail than I'd be able to:

First, physicians may not agree on the medical condition causing the symptoms the patient presents.


Second, even if physicians agree in their diagnoses, they often do not agree on the efficacy of alternative responses — for example, surgery or medical management for lower-back pain.

Third, information on both the diagnosis of and the likely consequences of treatment are asymmetrically allocated between the sell-side (providers) and the buy-side (patients) of the health care market. The very reason that patients seek advice and treatment from physicians in the first place is that they expect physicians to have vastly superior knowledge about the proper diagnosis and efficacy of treatment. That makes the market for medical care deviate significantly from the benchmark of perfect competition, in which buyers and sellers would be equally well informed.

Economix goes on to explain these premises in more detail and how the situation has changed, or hasn't over the years.  It's a post well worth reading.