Several of the alleged market failures in the provision of health services actually reflect economic scarcity and therefore are best dealt with by market institutions, not government interventions. The market-failure interpretation of health-service problems that arise from adverse selection, moral hazard, and the doctor-patient relationship shows a fundamental misunderstanding and misapplication of basic economics.
Download PDF
Stephen Shmanske is a Research Fellow at the Independent Institute and Professor Emeritus of Economics in the College of Business and Economics at California State University, East Bay.
| Other Independent Review articles by Stephen Shmanske | |
| Winter 2005/06 | The Monopoly Nonproblem: Taking Price Discrimination Seriously |
