... not usually doctors, there will be unequal balance of information known between the doctor and patient. This is called a situation of asymmetric information. Therefore, the patient cannot make a rational and informed decision on what treatments should be made for the ailment, as the patient has no medical knowledge. As a result, exploitation will occur in the form of over-prescribing drugs or unnecessary operations in order for the doctors/hospitals to be maximising profits. Therefore more resources will be allocated to healthcare than there would be in a regulated system. For the free market system to work an effective insurance system must also work alongside this. However, there are problems with insurance as well. There is the moral hazard that if people are covered by insurance for certain treatments they may change their behaviour (e.g. become more reckless) so that they are more likely to require that treatment. For example, ...

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