I'm not defending the "Certificate of Need" regulations, but your thinking is sloppy: healthcare is not a product like bananas. That analogy will mislead more than it will inform.
If every person has to buy 10 bananas a day or they will die, the town with 5 stores may have more expensive bananas, because they can just raise prices to cover the excess capacity and people will pay.
The same works for non-emergency surgery as well. Take a look at https://surgerycenterok.com/ it's such a breath of fresh air to see the full price for each procedure right there. People travel there from all over the country to get needed procedures. So competition clearly works but the system doesn't really enable it. For example insurers don't want to work with the linked center because they won't give them rebates but charge everyone the same price. More details: https://www.econtalk.org/keith-smith-on-free-market-health-c...
That’s still 4-6x what it would cost at a private clinic in Canada.
Not necessarily. They're all under the same pressure. If they all provide similar services with little differentiation, the price will probably settle at a higher level to cover the fixed costs of 5 stores instead of 1.
> In my local market we literally got a scan for 2k where the hospital we'd usually go to wanted 10k.
You kind of get at it below, but I wonder if that's an effect of insurance negotiations (e.g. the hospital you usually "usually go" gave in to insurance discount demands in one area, but pushed back on scans pricing to get the revenue they need to operate).
I do think the totally fictitious nature of posted healthcare prices is a serious problem.
There are two things that set healthcare apart here. One is that sometimes people need unusual treatments to stay alive that are extremely expensive, and our desire not to let people die is at odds with the normal market mechanism where products that cost too much just don't get purchased. The other is that sometimes people have emergencies so urgent they can't really choose their provider.
But the vast majority of healthcare doesn't fall into those categories, and normal market mechanisms work fine for those. Competition would lower prices for most healthcare just like it does for food and everything else.