Wednesday, April 09, 2008

ECON 365: Lack of Transperacy

Markets work when they are transparent and competitive. Information about prices and quality are fundamental to market functioning. If patients (or even insurance companies) know essentially nothing about prices (because the real price is obscured in a complicated insurance transaction) or quality, then how can they be expected to make choices that discipline the market to provide the right outcome -- good health at low cost? They can't. The suppliers run the system and they run it to their own advantage.

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