I find this argument to be compelling.

Eric Crampton notices a similar mistake:

I’ve about a half dozen times heard … spokespersons … arguing that allowing private competitors into …. the New Zealand Accident Compensation Commission, is bad because private firms have to earn profits and so they’ll have to have higher cost structures than the public insurer. But no National Radio interviewer provided the obvious retort: If the argument were true, we’d want the government to be running everything!

The core problem seems to be that folks who intuitively feel that area A deserves special treatment T look for a justification, and then stop when they find a feature F of area A that suggests treatment T might be a good idea. But by stopping there, they do not consider why this argument does not also justify the same special treatment T of areas B, C, D, etc. that also have feature F. This is an extremely common error, even among folks very skilled at analyzing math models of feature F.

To justify their intuitions that medicine should be treated specially, people often refer to features like sometime large decision consequences, sometimes large prices, suppliers knowing more than customers about product quality, customer behavior influencing customer outcomes, etc. But such folks usually do not favor giving other areas that share these same features the same special treatments.

I suspect that in many cases they do favor other special treatments, but they haven't yet figured out how to spin the cognitive kaleidoscope to show that pattern. I also think that is is useful to debunk them at every opportunity since their intuitions degrade society, however well intentioned they think themselves to be. They are mistaken. Perhaps another analogy will help: using brute force government power to control systems and conceal data that makes such control more difficult may in special cases be a last resort necessity like the use of antibiotics to control infections that overwhelm the immune system, but using antibiotics when not strictly necessary creates resistant strains of germs, compromises immune systems and decreases overall health. If we had not hired governments we would consider their actions to be vandalism.