I always thought that the old "catastrophic" health insurance system made more sense, and from what I've heard, it used to work. People paid out of pocket for their routine health care, which was therefore responsive to market demands, and doctors even made house calls. Those who could afford it bought "catastrophic" insurance (sometimes called "hospitalization policies" if I remember correctly) that was relatively affordable, and which kicked in only in the event of a serious accident or major illness. The system seemed to work because not everyone needed to use their health insurance policies, since they were only for emergencies. Enough people who didn't wind up needing them bought them as a hedge against catastrophe, but if something really bad did happen, you had insurance to pay for it. But that's not how "health insurance" works anymore.