John, the fallacy in the free market model for health care is the assumption of a rational consumer who has the wherewithal to shop around. Not that that never happens, but a person with an acute, painful medical condition is in no position to choose a provider for pricing reasons.

Moreover, hospitals charge outrageous prices with the assumption of some non-payment. Their business model is to use collection agencies to claw back as much as possible from the hapless uninsured who stumble through their doors. What fraction they can collect as a percentage of exorbitant mark-ups is still much more than full payment for reasonable bills.

Say the hospital charges 7 dollars for a 10 cent paper cup and can only recover 3 dollars of that through a wage garnished settlement or medical bankruptcy. Well that 3 bucks is still better than a reasonable 300% mark-up on the cup (40 cents). Hospitals have absolutely no incentive not to squeeze blood out of a poor sap's gallstone.

A better analogy for the acutely ill or injured patient is not Lasik, it's buying booze on a cruise ship. Only worse because the captive patient can't go on the "non treatment" wagon while he's on board the good ship St. Gouge Medical Center.