This conversation appears to not have incorporated the very strong evidence that higher health care spending does lead to improved health outcomes.

Personally I'd reform the American system in one of two ways- either privatize health care completely so that cost of using a health care provider is directly connected to the decision to use health care OR turn the whole thing over to the state and ration care (alternatively you could do the latter for basic health care and than let individuals purchase anything above that). What we have now leaves health care consumption decisions up to individuals but collectivizes costs-- which is obviously a recipe for inflating an industry well above its utility.