Why Health Care Markets Don't Work

Brad DeLong points us to Kenneth Arrow and Uwe Reinhardt on why health care markets don't work. The central clue is asymmetric information. Arrow figured this out in 1963! The promotion of markets in health care since then has had the effect of destroying some of the social glue that helped health care function despite the markets.

My favorite line (Reinhardt):

In my view, when economists wax mushy on the virtue of what they call “efficiency,” it is time to run for the hills, for they are selling a preferred moral doctrine in the guise of science.

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