Arrow a Uncertainty and the Welfare Economics of Medical Care 859 ARROW: UNCERTAINTY AND MEDICAL CARE are, in fact, strong institutional similarities between the legal andSage medical-care markets. )13 In addition, the demand for medical services is associated, with a of medicine) considerable probability, with an assault on personal integrity. There is ome risk of death and a more considerable risk of impairment of full functioning. In particular, there is a major potential for loss or reduc tion of earning ability. The risks are not by themselves unique; food is lso a necessity but avoidance of deprivation of food can be guaranteed with sufficient income where the same cannot be said of avoidance of illness. Illness is, thus, not only risky but a costly risk in itself, apart om the cost of medical care B. Expected Behavior of the Physician It is clear from everyday observation that the behavior expected of Bloche, sellers of medical care is different from that of business men in gen- hal eral. These expectations are relevant because medical care belongs to Millenson che category of commodities for which the product and the activity of production are identical. In all such cases, the customer cannot test the Peterson product before consuming it, and there is an element of trust in the (expected relation. But the ethically understood restrictions on the activities of behavior of a physician are much more severe than on those of, say, a barber. His physicians behavior is supposed to be governed by a concern for the customers welfare which would not be expected of a salesman. In Talcott Par- sonss terms, there is a" collectivity-orientation, " which distinguishes medicine and other professions from business, where self-interest on the part of participants is the accepted norm. s A few illustrations will indicate the degree of difference between the behavior expected of physicians and that expected of the typical busi nessman. (1) Advertising and overt price competition are virtually eliminated among physicians. (2)Advice given by physicians as to further treatment by himself or others is supposed to be completely governmental demand, military power is an example o nerged, though the precise social structure is different f not hard run, experience with the quality See [22, p. 463]. The whole of [22, Ch. 10] is a most illuminating analysis of the acknowledge here my indebt I am indebted to Herbert Klarman of Johns Hopkins University for some of the points discussed in this and the following paragraph