I love the sentiment but it's just a fact that the healthcare market is different and free market principles don't apply in traditional ways.
One basic issue is that markets have winners and loser but as a society we've decided we don't want losers if it means they can't get healthcare.
We have laws that say they can't be refused emergency care and as a practical matter they're rarely refused care for not being able to pay. Unlike other markets instead of the loser taking his losses we've socialized the costs and the rest of society picks them up.
The whole third-party payer thing also distorts the market in crazy ways plus the fact that the purchase of healthcare is often not discretionary.
It's evolved into a very different animal in this country and our approach has to deal with that reality.
The good news is that perhaps the biggest reason health care is so expensive is that it has gotten so ADVANCED and EFFECTIVE.
One problem with health care is that it rarely involves a product or service that can be sold as "discretionary" -- which limits the ability of the producer to take advantage of economies of scale that lower costs over time. Pepsi and Coca-Cola keep the production cost of their products low by bottling millions of them in a highly automated process. Ford or Toyota can lower the unit cost of an SUV by producing 200,000 of them at a time. Boeing can do the same thing with a 787 by producing 1,000 of them over several years.
But a medical facility can't go out and spend $X on an MRI machine, then go around trying to sell patients on the idea of getting MRIs just for the hell of it. Medical care is the kind of commodity that you hope you never need -- but you want to have readily available, and 100% effective, when you DO need it.
Do you ever wonder why the Amish never complain about the cost of health care? It's because health care is dirt cheap when anything more complicated than a broken bone is likely to be fatal.