Have you ever tried to get a quote before having a procedure done? I tried to get a quote for a CAT-Scan once. No one could estimate the cost of the procedure, even though there was a fixed cost associated with the equipment. How can free-market forces drive down costs when the costs are kept hidden from the customer?
You try opening a hospital before saying that they exist in a free market. You might find that the other hospitals in the area, who get to determine whether you get to open a hospital at all, do not think you should be able to.
That may very well be true (and I'm general happy to live in a country with a NHS), but the failure of the US healthcare system doesn't tell us that.
A free market contrasts with a controlled market or regulated market, in which government intervenes in supply and demand through non-market methods such as laws controlling who is allowed to enter the market, mandating what type of product or service is supplied, or directly setting prices.
The array of regulations that govern health care can seem overwhelming to people who work in the industry. Almost every aspect of the field is overseen by one regulatory body or another, and sometimes by several.
I'm not sure that your solution is better. Can you provide some evidence to suggest that government run programs don't offer worse results? I can't think of any examples where the government runs efficiently.
I believe that you have the US government in mind, and the original comment has European governments in mind. If this is the case, both of you are likely right. I also think that there is ample evidence that European governments run hospital very efficiently.
In other words: American anti-government attitude says a lot more about their own government than more general consideration in political theory.
It has worked out well for our veterans   .
For those readers unfamiliar with US healthcare, the US in effect has several independent healthcare systems. Around 90% of veterans get healthcare through the Veterans Health Administration. It provides a healthcare system that uses the same model the Britain uses.
For Americans 65 and older, we have Medicare, which uses the same model Canada uses.
For Americans who get health insurance through their employer, we are similar to Germany.
For Americans that do not fit into the above three groups, we are Cambodia or rural India, where you can see a doctor if you can pay the bill yourself out of pocket, or if you are so sick that you can be treated in the emergency room at a hospital.