Originally Posted by Yakk

As for healthcare:

Healthcare is a service for which when they need it, people are usually willing to pay basically anything for it. As a market, it has a very low price elasticity of demand. If all healthcare providers doubled in cost, consumption wouldn't halve.

To keep price elasticity up for individual providers, you either need to regulate or provide lots of price competition.

The costs are also extremely unpredictable on an individual scale. This means it makes sense to get insurance.

Insurance then dictates prices to health care suppliers. This is a form of price competition.

There are information asymetries in favour of the consumer of health care insurance. Which means that elective consumption of health care insurance has to be priced extremely highly.

Which is why you get large corperatized health care plans without the option to leave them. This reduces the information asymetries (all employees of a corperation are closer to the general statistical universe than a single elective consumer).

All of this can lead to the old fashoned 'you are fucked' if you aren't part of a corperatized health care plan.