The allocation of health goods frequently deviates from the principles of a market economy. This holds true particularly of medical services, even in Western industrialized countries, which claim to be market economies. In general, neither the decision to offer a medical service (e.g., an appendectomy) nor the decision to demand that service are made by sovereign individuals or firms who bear the full financial consequences of their choices.Moreover, the pricemechanismis not permitted to coordinate choices in health care by signaling varying degrees of scarcity. The decisionmaking process is thus completely different from that characterizing the production and purchase of refrigerators, for example.