Imperfect Market

The US Healthcare Market
Author’s Name
Institutional Affiliation
The U.S Healthcare Market
According to Shi and Singh, the authors of the book Delivering Health Care in America, there are two primary types of healthcare markets. These are the perfect and the imperfect markets. In simple terms, a perfect healthcare market is one, which encourages suppliers to deliver goods and services directly to buyers and at a minimal charge. On the other hand, an imperfect market is usually one where a single or a limited number of suppliers have considerable domination in the market. In the United States, despite the fact that private parties majorly manage healthcare delivery, the sector is only moderately governed by the free market forces (Shi and Singh, 2014). As such, delivery of healthcare services in America does not pass the primary test for a liberal market making it best described as an imperfect market or quasi-market.
Outstandingly, the U.S healthcare department is usually typified by a high presence of externalities ranging from insurance companies to government agencies and hospitals. These bodies usually have absolute domination in the market making it somewhat impossible for the healthcare providers (sellers) and the patients (buyers) to act independently (Shi and Singh, 2014). More so, the healthcare prices in America are normally fixed by these external agencies that are contrary to the ideals of a perfect market. In an ideal market, the prices of healthcare services are usually governed by the unencumbered and free interaction of supply and demand forces (Shi and Singh, 2014).

Also, the goods availed in the American healthcare market are usually not homogenous, and there is often asymmetry of information as well as supplier-induced demand, all characteristics that make the market to be classified as imperfect.
References
Shi, L., & Singh, D. A. (2014). Delivering health care in America. Jones & Bartlett Learning.