Ezra totally misses the main point: competition makes no sense at all in theory, and can only drive costs up. The failure in practice is the result that should have been expected by anyone who had devoted as much as 5 minutes objective thought to the issue. He goes on to show specifically how it hasn't worked in the real world.
Why doesn’t the market work here? Ken Arrow explained it all half a century ago. Patients by and large don’t have the information to evaluate medical treatments; in any case, they mainly buy insurance rather than medical care directly; and insurers profit not by providing the most cost-effective care, but by trying to insure people who won’t need care.
The red highlighted section briefly summarizes part of my argument. The Arrow link is to a 33 page PDF file.
Clearly, the brute economics of heath care refute models proposed by right wing ideologues. There is another aspect to this, though - health care is not merely "a commercial transaction." Decisions are literally life and death, frequently made under emotionally trying circumstances, the Dr. - patient knowledge disparity is wildly assymetric, and opportunities for over-care and conflict of interest abound.
As PK put it:
The idea that all this can be reduced to money — that doctors are just “providers” selling services to health care “consumers” — is, well, sickening. And the prevalence of this kind of language is a sign that something has gone very wrong not just with this discussion, but with our society’s values.
And for this wrongitude we can specifically and directly thank the lizard people.