STAT March 13, 2024
Consider shopping for cereal in the grocery store. Buyers easily know how many grams of sugar and calories are in a serving, as well as how much the box costs, before they get to the checkout line. Yet in the U.S. health care market, this often isn’t the case. Prices are both high and highly variable as well as difficult to observe. I’m an economics professor. In the courses I teach, I expound on the importance of complete and accurate information about prices and quality in well-functioning markets. When buyers and sellers have access to accurate and timely information, the invisible hand can become a powerful force that causes prices to fall to the level of costs and markets to...
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