The market for health insurance and the market for health care are two markets which are plagued with two source of market failure. This discussion will help you explain the difference in these markets.
Discuss the problem of asymmetric information in the market. Then consider, we tolerate a high degree of monopoly power in the market for doctor services in the form of AMA over site, testing and licensing of doctors. Discuss how is asymmetric information at the root of this problem? Should the monopoly power of doctors be reduced or eliminated?
Explain the market innovations that have lowered the cost for the type of health services traditionally performed by doctors.