What are the reasons for inefficiencies in the demand and provision of medical services?

Question

What are the reasons for inefficiencies in the demand and provision of medical services?

Answer 1

The biggest culprit is adverse selection. Insurance needs to be high to cover sick people. Healthy people will not buy because of the price. Thus, the insurance will have only wealthy, sick people.  

Answer 2

Lack of information or lack of free flow of information to make a rational decision between the supplier and comsumer of medical services.