Milton Friedman was simply pointing out that if you wanted costs to come down the removal of licensing is one method of doing so. You do not need 'state' licensing. Create a private enterprise that licenses healthcare professionals, why does it have to be the state?
Look this is how dumb the currents system is. My brother is on Meds to reduce cholesterol. Costs $60.00 a year ( $5.00 per month ) in order to keep the prescription up he has to see a doctor every 6 months. He has to have labs every 6 months. Every time he goes in the doctor simply says, looks good see you in 6 months. So to get a prescription that is fairly benign, he is shelling out $600.00 in Doctor/lab fees a year for a $60.00 prescription.