I think Matt Yglesias is onto something when he's talking about HMOs here, but he doesn't quite take it far enough.
If I'm feeling ill and want the doctor to prescribe me some antibiotics, but then he says "no no no, you have madeupitis and if you take antibiotics you'll die" then suddenly it seems I don't want the antibiotics anymore. Medical treatment isn't fun, people don't just want treatment for no reason. If you convince them that the treatment isn't useful, they really won't want it.It's not so much that the person telling you "no" is a representative of a for-profit company--it's that it's not a doctor. If the doctor tells you no, then you tend to trust a little more not just because he or she is an expert in treating illness, but also because you don't see an ulterior motive at play. If anything, we tend to mistrust doctors when they over-prescribe medication or try to convince us to have surgery when we might not think it's completely necessary. Look at the current controversy over Caesarean sections for proof of the latter.
But that means the person saying "no" needs to be credible, needs to be someone you trust. And I agree with Krugman that a representative of a for-profit company probably isn't it. The company has good reason to deny you coverage that may really be useful -- they just don't want to pay. And if the circumstances are right, it can even be in the HMO's interest for you to do. That's an ugly business and naturally people react differently to being told "no" by a company like that than they would to being counseled by someone they trust.
But it's not usually a doctor telling you "no" in an HMO. It's an accountant or an adjuster, and not only is there no personal relationship at play, there's antagonism from the beginning because our system is a for-profit one, and the assumption from the patients' point-of-view is that the HMO or insurance company is looking to cheat them out of the coverage they've paid for.
I don't know how to remove that antagonism from the system--it's not the same as buying a car where customer and dealer are working out a price and both expect to give a little and benefit from the transaction. People tend to get a little more upset when you deny them treatment for illness than when you don't throw in the moon roof. Maybe if the doctors had more of a stake in keeping costs down, that would make a difference--you're certainly not going to convince the health care industry that they need to limit their profitability. Or--and I know this sounds crazy--we could take the profit motive out of the industry for most people, and leave it as a niche market.