We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.

We all believe we need comprehensive health insurance because the cost of care — even routine care — appears too high to bear on our own. But the use of insurance to fund virtually all care is itself a major cause of health care’s high expense.

We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck — through an insurance claim.

Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?

Society’s excess cost from health insurance’s administrative expense pales next to the damage caused by “moral hazard” — the tendency we all have to change our behavior, becoming spendthrifts and otherwise taking less care with our decisions, when someone else is covering the costs. Medical ads on TV typically inform the viewer that a specific treatment — a drug, device, surgical procedure — is available for a chronic condition. Many also note that the product or treatment is eligible for Medicare or private-insurance reimbursement. In some cases, the advertiser will offer to help the patient obtain that reimbursement. The key message: you can benefit from this product and pass the bill on to someone else. But there’s no one else to pay the bill.

What amazed me most during five weeks in the ICU with my dad was the survival of paper and pen for medical instructions and histories. In that time, Dad was twice taken for surgical procedures intended for other patients (fortunately interrupted both times by our intervention). My dry cleaner uses a more elaborate system to track shirts than this hospital used to track treatment.

Technological innovation — which is now almost completely insensitive to costs, and which often takes the form of slightly improved treatments for much higher prices — would begin to concern itself with value, not just quality. Many innovations might drive prices down, not up.

In 2002, the U.S. had almost six times as many CT scanners per capita as Germany and four times as many MRI machines as the U.K.

In competitive markets, high profits serve an important social purpose: encouraging capital to flow to the production of a service not adequately supplied.