I'm inclined to think that we have the problems we have now because we have 3rd party payors (who are never as incentivized as 1st party payers to keep costs down), and because the government incentivized (through tax breaks) companies to provide insurance as a form of payment for employment.
Companies pay a certain value to employees for their work, and part of that value is in the form of insurance, because the government gave tax breaks, and therefore companies could buy insurance cheaper than individuals. So, to stay competitive and give the best value to employees, companies had to adopt this system.
And here we are. Maybe the government should have just offered the tax breaks to individuals in the first place, and cut out an entire industry of middlemen.
I admit I am not an expert on this, so I welcome criticism on the above.