Healthcare Competition: Is it Healthy?

For the most part, I am a believer in the ability of free markets delivering the best solution to economic problems. However, is this the best model for the healthcare system?

Competition is clearly beneficial towards improving the quality of certain organizations. It drives innovation and weeds-out inefficiency. Both good things, right? The problem, as I see it, is that maybe the goal should not be "overall" improvement and efficiency. Competition also dictates that there be losers, and often the death of a losing company is long and drawn-out. When we are talking about someone buying a defective consumer electronic product, I have no problem allowing the market to weed out the poor performers. Eventually, enough people will complain about the product, less people will buy, and the company will go out of business. The question takes on more significance when we are discussing somebody's heart treatment. Are we to allow the market to sort out the "losing" health care providers by waiting for enough people to die of bad treatment? I don't have an answer, but I've been thinking about the question.