Since capitolism is based on the concept that competition mixed with supply and demand will motivate compainies to maximize their efficiency and innovation, would it not seem that health insurance, whereby the person receiving the service is not actually required to pay the bill, would prevent hospitals from caring about havign a reasonable price fortheir service, or for operating efficiently? (sorry for the long sentence) Since hospitals are plentiful, would not simple free market economy work with with medicine in the US, and force prices to drop the a reasonable amount that people can actually afford, as it does with food, shelter, and all the other necesities that benefit from the superior free market economy? Could solving the problems of health care in the US be as simple as eliminating all health insurance companies?

recent rise is medical cost is mainly due to medical malpractice suits, which are a great risk for hospitals, so they take out insurance against it, which adds to costs of all medical services.

I.e. doctor makes a mistake, patient sues and wins $20 million, which come out of pockets of all other patients.

There is some truth to that - whenever an industry is subsidized by the government, demand rises.

But there must also be a shortage of supply - and that's from restriciting growth of health care providers. Some of this is from frivolous malpractice suits, some from the high costs of providing the expensive equipment required for modern health cars.

This is not pure free market. It will be pure free market when:
1) Companies compensate employees for not taking medical insurance. If A and B works the same job in a company and A takes the company paid medical insurance he in theory makes 20% more than B for the same job.
2) I can buy drugs from whereever and when ever I want. I take the risk. Most procedures done in US can be done in India for 10% of the cost. But the risk is mine.
3) FDA remains just an advisory board. They advise and I decide to accept it or not. I think this is the root cause of all the evil.
4) No restriction to opening up a medical school. When the tech boom started there were a million new engineering and quasi engineering schools opened. Where are all the medical schools opening?

There is no simple answer. Some causes1) the last 12 months of life, people consume (on an average) more resources than in all of their previous years, though there are plenty of exceptions. i have seen hundreds of thousands expended to add a week to the life of a dying patient.There is no longer an acceptance of death as a part of life. People say "do everything".(2). Lack of personal responsibility-people on Medicaid smoke and then demand expensive respiratory treatments, alcoholics and the morbidly obese go on disability for their self-inflicted disease. They don't pay their own bills.The costs get shifted to those who do. (3). The breakdown of the family, the building block of society: in past generations people took care of their frail or ill relatives. now they demand that the health care system do it . (4). new treatments and meds-horribly costly. BTW, Hillary or Barack won't be participating in what they plan for you.