Is there such a thing as a healthy lunch?

Tyler Cowen's "Economic Scene" column in the NY Times makes the argument that we're actually getting something for the high administrative costs of the US health care system. He concludes:

Middlemen and marketing costs have long been viewed with suspicion by critics of commerce. But these practices are usually signs of market sophistication, not waste. The gains from abolishing private insurance and its overhead costs are an illusion. TANSTAAFL, or “There Ain’t No Such Thing as a Free Lunch.”

Economist's view says there is such a thing as a wasted lunch and presents some counter-arguments from the writings of Paul Krugman, who wrote:

I'm not an opponent of markets. ... I've spent a lot of my career defending their virtues. But the fact is that the free market doesn't work for health insurance, and never did. All we ever had was a patchwork, semi-private system supported by large government subsidies. That system is now failing. And a rigid belief that markets are always superior to government programs - a belief that ignores basic economics as well as experience - stands in the way of rational thinking about what should replace it.