The fact is that the incentives in our health-care system are all screwed up precisely because of government policies and programs. Medicare, the biggest player in our insurance system by far, is an arcane fee-for-service system that encourages volume over value and inflates (while shifting) costs. Medicaid, meanwhile, has a state-federal structure that makes cost-containment nearly impossible (by having state policymakers make spending decisions while the Feds pay at least half the cost in an open-ended way). And the tax exclusion for employer-provided coverage creates a huge incentive for high-premium insurance while shielding everyone involved from actual prices and costs. All the incentives point to cost inflation and away from outcome-based health economics, so we shouldn’t be surprised to have an inefficient system.