But this is the problem with capitalism and health care, the providers just stop if there's not enough money in it for them.
Is this supposed to be a flaw?
If the cost of a lab is $500/patient then the patient (or their insurance) pays the $500 and the lab exists. If the cost of the lab is $50,000,000/patient, the lab probably shouldn't be funded, because its cost/benefit ratio is very bad and the same money could have saved more lives by putting it somewhere else.
What would you do in the alternative? Have the government provide unlimited funding for things that cost more than they're worth?
You're making the case that the market would have the incentive to provide these things because the insurance company would rather pay for an expensive test than have a larger number of claims if the disease spreads.
The existing law has a massive defect that prevents any of that sort of thing from happening right now.
We capped insurance company profits as a percentage of claims, so the only way they can make more money is by paying out more and bigger claims. We basically banned them from having any incentive to lower costs because now lower costs mean lower profits instead of higher ones.
But that's a flaw in the existing system, not a flaw in the general concept.
> They'd be ripping a new one in the meat industry to forestall antibiotic resistance, for example.
There are already various state and federal laws restricting the use of antibiotics in livestock. But in general what leverage does an insurance company have over the meat industry?