I would argue that it is not difficult to construct a functioning market for elective procedures. For elective procedures not covered by insurance, the consumer has time and motivation to educate themselves about alternatives. For elective procedures covered by "insurance", the insurer has the option not to provide such coverage. Competitive pressures can work as they do in the rest of the economy.

The harder question is how to construct a market for non-elective procedures, such as emergency care. Consumer choice doesn't work under those circumstances. We have a market failure. How do we solve it?