It's simply that economists often assume that all markets are (or potentially are) free, when that isn't the case. Some markets come close (items on eBay, stocks, commodities, currencies, etc) while others don't. If you start with a naturally "unfree" market, the same set of rules don't apply.

It's just economists' long-standing physics-envy coming through. They want to think their field has "laws of gravity" that are always true.

As a price inelastic service a pure market based health care system unreasonably favors the service providers.