Every country aims to control medical costs, and many wealthy nations—Switzerland, for example—also rely on private insurers to help manage care. What sets America apart is its patchwork system that pits loosely regulated, profit-driven players against each other. The result: enormous administrative waste, uncertainty for patients and little added value. The U.S. spends almost twice as much as comparable wealthy countries, including those with private insurers, on healthcare. Cracking down on insurance companies can only go so far in rectifying the disparity. That is because the bulk of America's health bill stems from the high cost of hospital services, drugs and care in general. Even if we were to eliminate insurer profits, we wouldn't make much of a dent in the high cost of U.S. healthcare. But that doesn't mean the insurance system can't work better. The roots of today's fragmented system can be traced back to a quirk in U.S. history. Unlike most high-income countries, which created centralized government systems to ration care in the 20th century, the U.S. followed a different path shaped by historical circumstances. During World War II, wage controls prompted employers to offer health insurance as a tax-free benefit to attract workers.
