What are the major reasons that medical spending is absorbing an increasing share of national output (GDP?
How important is cost containment in establishing national health care policy?
What do economists mean by Scarcity?
“… the standard competitive market model just doesn’t work for health care … to act all wide-eyed and innocent about these problems is either remarkably ignorant or simply dis-ingenuous”. Kenneth Arrow catalogues the five distortions in the market of health care: unpredictability, entry barriers, the importance of trust, asymmetric information, and payment idiosyncrasies. (a) explain how each distortion is true; (b) are these distortions that unusual for markets in general?Unpredictability will be present in any complex system, and the health care market is certainly a complex system.
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