ABSTRACT
This chapter explores some of the issues that arise from the inapplicability of common business principles to health care industry markets, payments and prices. For a market to be described as “efficient,” the seller must have a clear idea of what s/he is willing to accept in exchange for providing the product or service, and the buyer must be fully informed of the nature of the product or service being offered. Business transactions come with the assumption that the seller is the one specifically providing the product or service, the buyer has the resources at his or her disposal to exchange for the product or service being offered, and that the price paid for the acquired product or service is established through this transaction process and is known or transparent to the buyer and the seller. Third-party payments dominate health care, and the role of private companies in providing health insurance is unique in the United States.
