I've thought about this before. I really like the idea of the high-deductible insurance plan coupled with a tax-advantaged health care savings account.
That way, on average, each individual sees what their health care costs, and has an incentive to limit it. That's savings number 1. Savings number 2 would be that young people who, on average, don't need much health care will be able to invest against higher health care needs further down the road. This has the added benefit that the individual retains the ability to get whatever care he or she needs up to their account balance - Which at $5k/year could be a half million, without the need to dicker with insurance companies.
Now, unlike most other forms of insurance, health care does delve into the realm of predictable increased risk that's not the fault of the person. Live on the coast, but are finding that hurricane/flood insurance is too expensive? You can always move, even if that does carry costs of it's own. Own a dangerous car? Sell or scrap it and buy another. You can't divest yourself of your DNA though*.
So my personal philosophy would be to set a limit - don't allow companies to discriminate based upon genetic or hereditary illnesses**. By the same token, set an upper limit, much like house and car insurance have maximums. My personal car insurance is $250k per person, $500k per incident, for example.
We already have a government system in place for truly disabled people. If you're so badly off that you honestly rack up more than $500k in medical bills in a year, I think that it'd be reasonable to have the government pick up the rest of the tab, essentially declaring you disabled.
By allowing more open competition as well as simplified billing(billing is often 50% of the cost of the treatment), we'd see a lot of savings. By having the high deductible, we return our health care plans to being insurance plans. By having the limit on overall coverage, we keep them affordable. By removing them from the benefits list, we return choice to people, who are now free to find a plan that fits them, not their employer.
*Future medical advances and experimental treatments aside.
**And I'm not talking about being fat because your parents taught you a poor diet.