You seem to have grasped the essence of the argument, except that health insurers wouldn't have captive customers because the captivity is enforced largely by government regulations.

The point is that mandatory certification of doctors, medications vetted through a highly risk averse process and having no flexibility in dealing with health insurers all secure better outcomes at a cost that nobody apart from the government thinks is reasonable. If anyone had a choice, which they do not, they would probably choose something cheaper.

It is lovely that surgeons are all wealthy, articulate, over-educated polymaths with numerous hobbies and interests (and can probably play a musical instrument, I don't know), etc, etc, except it isn't actually obvious why they need all that. At the end of the day a surgeon needs experience, steady hands and an aversion to doing things that are not necessary. And when tested people will prefer cheap with a good reputation to overqualified but approved by some guild.

It isn't like accidents don't already happen. Can't escape from risk using bureaucracy; minimising risk at all costs is a sign that people are making bad decisions.