The U.S. health insurance industry: an alternative view.

The health insurance industry in the U.S. can be characterized as a concentrated industry. It has evolved into its current structure as a result of certain historical conditions, particularly those following the Great Depression. The structure of the industry has had an effect on the manner in which the industry functions and the cost increases in the health care sector. Specifically, the pricing mechanism is that of a price leader setting a limit price; health premium prices are higher than would be expected under a competitive structure. Regulation has been ineffective, because it has been dominated historically by health care providers and insurers. The costs of health care in general, and hospital care in particular, have increased beyond what would be expected as a result of "cost-pass-through."