Traditional Medicare, being immune from market forces (though not political forces) can counter that provider market power, essentially setting “below market” prices by fiat. (Don’t go thinking this is an affront to a perfectly competitive market. High provider market power is itself a deviation from a perfect market.)
I don't understand the fascination some economists have for the "perfectly competitive market."
In physics, I can see the advantage to improving our understanding of force and inertia by experimenting and theorizing in a frictionless system. But when it comes time to build machines in the real world, we'd be in big trouble not to account for friction.
Seems to me like the same thing goes for economics. Simplification has its advantages to understanding the economic principles and how they function, but when you get into the messy world of voluntary exchange between free individuals, with its innovators, early adapters, laggards and the rest, perfect competition does not and can exist. We can identify and account for the differences between the idealized system and reality, but any attempt to "correct" for the "failure" is try and substitute what someone thinks the world should be for what the world actually is ---and that is courting disaster.
Am I missing something here?