I understand it, but I think it's unfair to compare this using the current situation, because of the existence of free healthcare. I see it as a big almost-monopoly (well, it is one). The costs of private healthcare are higher *because* of public healthcare being paid with tax money. It's a huge system, and the prices of services only drop when there's a large customer base. How can there be a large customer base, when almost everybody chooses public healthcare (often without a further thought, because, eh, "it's free")?
Another absurd is that profits from private healthcare go... to empower public healthcare. Through the taxes they pay. It's a battle they can't win. I don't think the high prices of current private healthcare are that high because they just wanted them to be. As I said, it's a competetive market, and public, mandatory healthcare is and never will be a fair opponent. And If you don't make money, you crashpunk and go out of business. Well, unless you're finansed by the government. This way you can be incompetent and still function.