Health care markets may be inefficient because of

Question

Quizplus · Accepted Answer

Health care markets may be inefficient because of poor information, which can lead to consumers not being fully informed about the services they are receiving and providers not being fully informed about the needs of their patients. Adverse selection can occur when individuals with higher health risks are more likely to seek out insurance, leading to higher costs for the insurance provider and potentially causing the insurance market to fail. Moral hazard can occur when individuals with insurance have less incentive to engage in healthy behaviors or avoid risky ones, leading to higher costs for the insurance provider and potentially causing the insurance market to fail. Therefore, all of these answer options are correct.

Health Care Markets May Be Inefficient Because of