The pricing of medical care in this country is either directly or indirectly dictated by Medicare; and Medicare uses an administrative formula which calculates "appropriate" prices based upon imperfect estimates and fudge factors. Rather than independently calculate prices, private insurers in this country almost universally use Medicare prices as a framework to negotiate payments, generally setting payments for services as a percentage of the Medicare fee structure.

Many if not most administratively determined prices fail to take into consideration supply and demand. Unlike prices set on the market, errors are not self-correcting. That is why, despite an expanding cohort of patients with diabetes, thyroid disease and other endocrine disorders, the number of people entering this field is actually dropping. Young physicians are accurately reading inappropriate price signals.

In their book, "The Turning Point," Soviet economists Nikolai Shmelev and Vladimir Popov focused on key factors which undermined the economy during the communist era. They concluded that Goskomtsen, the agency responsible for setting prices, was simply incapable of setting and tracking prices on the myriad of goods and services under its purview.