This paper provided a framework for thinking about the economics of the market for medical care using the language and tools of modern microeconomics. It argued that the aforementioned market is beset by market failures because consumers are exposed to risks that are not fully insurable (in large part due to problems of moral hazard), and because they lack the information and expertise required to assess risks and treatments. It hypothesized that various salient features of the institutions governing the provision of medical care are best understood as social adaptations aimed at redressing the resulting inefficiencies. It also noted that in some cases those institutional adaptations undermine competition and perversely contribute to ineffi- ciency. Though written well prior to the emergence of the formal literature on asym- metric information, the paper anticipated many of the central issues that continue to occupy health economists today