When compared with other industrialized free-market economies, the United States has the highest per capita health expenditure, yet, Americans are the least satisfied with their health care system. This industry has been confronted with serious problems resulting in a departure from the Pareto efficient conditions. There are many circumstances under which this departure may occur, one such cause is market failure. Sources of market failure in the health care industry are identified as: 1) lack of competition; 2) insufficient information; 3) inadequate access to health care services; 4) presence of externalities; and 5) a persistent disequilibrium in the hospital, physicians, and nurses markets. The pricing of physician's services has often been described as that of a discriminating monopolist. Through market segmentation and patient demand manipulation the physician is able to charge different prices for virtually identical services. One form of market segmentation is that of physician specialization and sub-specializations thus contributing to the explosion in medical costs. This paper concludes that America's health care industry has reached a crossroad. A national health insurance is needed including the implementation of uniform pricing and the discouragement of sub-specializations with its price discriminatory practices. But National Health Insurance comes with a price of its own, the possible development of a medical-industrial complex.