>> Medical care is the most highly regulated industry in the economy, and so nothing you see happening is going to bear very much resemblance to reality. >You

>> Medical care is the most highly regulated industry in the economy, and so nothing you see happening is going to bear very much resemblance to reality. >You make it sound like one follows from the other in an obvious way. Can you expand on why that would be? Two factors: incentives and information. Regulators do not, by definition and intent, have the same incentives as participants. They're also not involved, so they lack information. Here's another way to think of it. When a biz goes bankrupt, employees lose their jobs, owners lose equity, and regulators go to lunch as usual. If a regulator mis-estimates costs by 1%, that's fantastic. If a supermarket mis-estimates costs by 1%, it goes out of biz (because their margins are less than 1%).