What is Asymmetric Information

The American healthcare system is vast and complex. An overview of the United States' healthcare system provides a view into the interrelated dynamics between three categories of factors: consumers, intermediaries, and providers. Consumers demand health inputs in order to produce health status that allows them to live productive lives. Intermediaries, such as insurance companies and government programs, reduce the direct cost of healthcare for consumers. Providers, such as hospitals and physicians, amongst others, have historically exhibited a degree of monopolistic power in the healthcare market. The modern trend towards managed care organizations, firms that vertically integrate multiple aspects of the healthcare market, aims to reduce costs imposed by such providers.