Economics is the study of choice and constraints on choice. A proper economist should recognize that one of the most important constraints on one person’s choice is the need for cooperation by another person who may choose not to cooperate. It is because cooperation allows us to be more productive that the division of labor and trade has allowed the birth and growth of civilization.
You can’t simply assume away the laws of economics and Krugman, as a Nobel prize winning economist should know better than that. Health care is indeed a special economic good, but it is still an economic good. The resources that go into providing health care are not free, and as long as that’s the case, we need to be concerned with making sure the right resources go to the right uses. This can only be achieved with a marketplace for medicine.