A complete review of literature on healthcare policy and cost analysis is beyond the scope of this report. The lecture notes (HBS) are useful in understanding the fundamental difference between healthcare market and other consumer services markets. We observe the prevalence of externalities in healthcare: “In the presence of externalities, society’s interest in a market outcome extends beyond the well-being of buyers and sellers who participate in the market to include the well-being of bystanders who are affected indirectly”. These externalities can call for government action to remedy the market failure. In his controversial book (Goldhill), Goldhill questioned the inherent contradictions in the present healthcare system in US. He proposed a Catastrophic Insurance model where the role of surrogated agents (private insurance and Medicare) will be diminished. However, at this time, there is no model of healthcare where patients can directly negotiate with the providers.