Doubly so since in every other for-profit business, the path to maximum profits seems to universally be to ower costs to the consumer in order to attract a larger market share - while the medical sector's model seems to be to increase costs and drive away customers.
You're missing something pretty critical with that analysis. In every for-profit business with viable competition, the path to maximum profits tends to be lowering costs. Unfortunately, outside of major cities, you will rarely find more than one hospital within a short enough distance to handle emergencies. In every for-profit business with few (if any) competitors, the path to maximum profits tends to be buying the competition and raising costs, lowering them only enough to bankrupt any new competitors that dare to enter the market.
The latter rule is particularly prevalent when a business has a relatively high barrier to entry. For example, cable companies tend towards extortionate natural monopolies at the local level because of the high cost of laying cable. Hospitals tend towards monopolies at the local level because of the high cost of insurance, diagnostic equipment, lawsuits, supplies, staff whose sole purpose is to squeeze money out of the **** insurance companies, etc. Also, there's no obvious benefit to having more than one hospital within about a five-minute drive of your house, so once one hospital is established, there's little motivation to add another one.
Finally, there's the very nature of insurance, which causes people to pay for medical services indirectly. If you had to pay the $20,000 bill, there would be incentive to charge less. Because your insurance company pays it, and you pay only indirectly in the form of what amounts to an average health care bill, the incentive to reduce costs does not exist, or at least not below the maximum cost that the insurance companies will allow them to charge for a particular service. In effect, insurance results in a price-fixed market for health services.
This is compounded by broken rules that prevent insurance companies from competing—different standards in different states, the requirement for permission from each state to offer insurance there, hospitals and doctors who accept only certain insurance providers, etc.
In short, if you want to reduce the cost of healthcare, I can think of only three real options:
- Make it possible for insurance companies to compete on cost. This requires making it mandatory for all healthcare companies to accept all insurance providers (including Medicaid and equivalent), tear down the states' ability to regulate insurance providers, and set up national health insurance standards that, if an insurer complies with those standards, qualify them to offer insurance anywhere in the U.S.
- Remove the profit motive at every level by providing government funds to start a nonprofit corporation (independently run) that creates a nationwide network of nonprofit hospitals to force competition on the care itself. Create a public option for insurance that provides service only through those hospitals (except for emergencies when there isn't one nearby).
- Create a single payer system that limits how much money will be paid for any particular procedure, and pass laws that require a hospital to give a single rate for those services regardless of insurance (or, ostensibly, lack thereof).
Or some combination of the above.