ABSTRACT
But understanding markets becomes more dif cult as the products become more complex and when actors start to include people acting as agents for the consumer or seller as is the case in health care. Well functioning markets are a common part of most of our lives, and most access to goods and services uses at least elements of market processes. Within health systems, markets exist widely but tend to be complex and regulated. As we have seen, analysis has to take into account agency, regulation, oligopolistic or monopolistic arrangement of suppliers, monopsonistic organisation of purchasing by agents on behalf of the ultimate consumers, compulsion of payment through taxation or social insurance arrangements. At times, we can hardly recognise what we see as a ‘market’ at all. Yet through viewing a health system as a series of complex markets, and by focusing on elements of exchange, incentives, rationing mechanisms and underlying demand and supply curves, cost and production functions, important insights can be gained into the strengths and weaknesses and likely effects of alternative forms of organisation.
