MARKET FAILURE IN HEALTH CARE: A REVIEW

Abstract

ABSTRACT

Market refers to a place or state where a consumers and the sellers interact either directly or indirect to trade goods and services. It is a situation where forces of demand and supply interact to determine prices of goods and services being exchanged. Healthcare is essentially one of basic human need and very limited and requires allocation and institutions to organize its allocation. Healthcare market often mentioned as to be different from many other goods and services which make it different from the perfect market. The aim of this article is to describe the characteristics of the market failure. A simple systematic review was done for this article involving English literature of public databases and journal search engines. As a result of our literature review, characteristics of market failure can be simplified and categorized based from the factor of market namely; government intervention, patient factors, and external factors. All the essential contents of market failure are discussed further in this article. For the conclusion, although there are many characteristics of market failure, the main characteristics of market failure in healthcare market is due to government interventions which subsequently cause emerging of other characteristics of market failure in healthcare market.

Keywords: Market failure, Market failure in healthcare, characteristics of market failure