In his new book, The Righteous Mind: Why good People are Divided by Politics and Religion, Jonathan Haidt compares the American marketplace for health care to a hypothetical grocery store run the same way:

The next time you go to the supermarket, look closely at a can of peas. Think about all the work that went into it—the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can—and think how miraculous it is that you can buy this can for under a dollar. At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you. If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god. You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets. Now let’s do the devil’s work and spread chaos throughout the marketplace. Suppose that one day all prices are removed from all products in the supermarket. All labels too, beyond a simple description of the contents, so you can’t compare products from different companies. You just take whatever you want, as much as you want, and you bring it up to the register. The checkout clerk scans in your food insurance card and helps you fill out your itemized claim. You pay a flat fee of $10 and go home with your groceries. A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you’ll have to send in a check for an additional $15. It might sound like a bargain to get a cartload of food for $25, but you’re really paying your grocery bill every month when you fork over $2,000 for your food insurance premium. Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality. The supermarkets get paid by the insurers, and the insurers get their premiums from you. The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments, not the foods that deliver value to you. As the cost of food insurance rises, many people can no longer afford it. Liberals (motivated by Care) push for a new government program to buy food insurance for the poor and the elderly. But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts. Before you know it, that can of peas costs the government $30, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs. That, says [David] Goldhill, is what we’ve done to ourselves. As long as consumers are spared from taking price into account—that is, as long as someone else is always paying for your choices—things will get worse. We can’t fix the problem by convening panels of experts to set the maximum allowable price for a can of peas. Only a working market can bring supply, demand, and ingenuity together to provide health care at the lowest possible price.

Haidt then compares the "market" for most health care products for the market for uninsured health care products, such as LASIK surgery, which highly competitive. More food for thought: Think of any other type of insurance that we buy to cover ordinary and expected costs (I admit that most health care policies also cover unexpected high cost occurrences). Health care insurance is thus a rather strange creature compared to most other kinds of insurance. Imagine homeowners insurance that covered the cost of cutting the grass, or the cost of a carpet wearing out. I suspect that health insurance is treated differently because many of us sacralize health. We treat it as sacred, meaning that we refuse to negotiate it as though it were a commodity, even in some instances where we might be better off subjecting some health services to the open market (such as we already do with many over the counter medications and devices).