You're throwing all sorts of wrenches into the gears of capitalism there. Defense spending isn't us taking money and burning it. It's the government buying things from private enterprise (largely American) and employing troops (also American). Same with regulating hospital purchasing procedures, which the market should regulate itself. You can't know what would happen if you stop that cash flow or force it to go somewhere else, but you can be pretty certain it won't be good.
It's clear we can do more to help the poor get health care. Taking money from the rich and our corporations and paying for it is not the easy solution that a lot of people like to daydream about.
Defense spending is the government taking money from everyone and reallocating it, just like any other government spending (and, of course, in many cases, it's a monopsony). You have to consider that a "wrench in the gears" just as much as health care, education or whatever else they spend money on.
One variety of universal health care that has been lauded by economists, even some towards the libertarian end of things, is that utilized in Singapore:
Furthermore, to call the current model in the US 'free market' is probably inaccurate, as it's distorted in all kinds of ways, first and foremost because of the strong link between people's jobs and their health coverage.
Defense contracting is the most hideous inefficient case of taxpayer robbery in existence today. I am not saying it is unnecessary, but the politics and waste behind it is astounding.
It's clear we can do more to help the poor get health care. Taking money from the rich and our corporations and paying for it is not the easy solution that a lot of people like to daydream about.