I agree that the existing system is completely out of balance in terms of supply and demand. Why is that? I believe it's because government has intervened in the healthcare market, and removing them will lead to a market that's much more aligned with consumer demand.
Even now, there are places like https://surgerycenterok.com/ that prove high quality healthcare can be provided at affordable prices (they even list them on their website!).
Arguably that militates against treating it as insurance as opposed to a straight-up single payer system or Singapore style system (http://theweek.com/articles/684952/republicans-should-blow-e...), but it does mean you can't argue from the success of existing insurance markets.