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The current way we determine those things are clickthroughs for marketing copy, ratings or repeat clients for landscapers and gutter cleaners. I've definitely hired someone before and said, damn they did a good job, I'd have paid more for that.
I'd disagree profit is excess. At most companies, if a product or job is profitable, the extra money is used for R&D, taking risk on new things and giving bonuses to people who really stood out. Profit is required for products in services so then you can reinvest and provide more value to users.
I think that capitalism generally does create the best product. In the US we are leaders in technology, research, aerospace and infrastructure. I'm not saying we are #1 in everything, but the process does work and time and time again companies and countries use products developed from the US.
The most talented people in their fields come here because they have the ability to earn money for their talents. While it's not a perfect meritocracy, generally the best in their field stand out.
Regarding healthcare, railroads or other private services. The best thing is that they are private, and if something comes to disrupt the status quo you are free to take your dollars elsewhere. Same thing with lemmy; while I'd argue reddit (at the moment) has a lot more engaging and varied content because of it's user base, I chose to stick with lemmy because I like it's value propositions.
Privatisation isn't terrible, look at what SpaceX has done, completely turned the space industry sideways. For healthcare you have new companies like Oscar, which have given people immediate access to telemedicine. In Japan, the Japan Railways (JR) is a massive private railway organization that provides bullet trains and local trains across the country: it can be done.