You're right, but less, rather than more. 1. 4 HMOs total, not hundreds. That's a big difference, it's still pretty centralized. 2. The HMOs actually compete

You're right, but less, rather than more. 1. 4 HMOs total, not hundreds. That's a big difference, it's still pretty centralized. 2. The HMOs actually compete on very little, mostly customer service. They are heavily regulated and have to provide services to a spec that's spelled out by the government, including pricing. 3. These 4 HMOs are mostly historic in origin; starting a new one would probably need to be initiated by the government. 4. For example, your example of (digital) prescriptions being filled by any pharmacy: that's an regulation codified in law. And while 100% of pharmacies can fill it, only those with an arrangement with your HMO will give you the subsidized price.