Almost every single "market failure" in the economic literature is really an opportunity for a business plan. All Arrow's paper shows is that certain naive str

Almost every single "market failure" in the economic literature is really an opportunity for a business plan. All Arrow's paper shows is that certain naive structures for health insurance might not work out so well. But there are plenty of other structures that might work well. For example, here is the design for a better type of healthcare company: - The company by contract defines that 80% of all premiums must be applied to reimbursement, the other 20% of revenue pays for administration, marketing, and profits. - As a result, the company cannot profit by denying care. If they deny care, that money must be spent on another patient. - Since the money must be spent by contract, the company will be incentivized to spend the money in the way that maximizes the total health of the pool, so that they can attract more customers. The incentives of the insurance company and the patients are actually aligned. Unfortunately, in my state, and in most states, the above structure for a healthcare company is illegal. Regulations prevent it. So I hardly see healthcare as an example of "market failure" when regulations prevent the types of business plans that would actually work.