Charles Wheelan, the Naked Economist, lucidly addresses the key issue in regard to the U.S. health care finance system:

Here’s a question to ask any presidential candidate from either political party: How do you plan to ration health care?
If the answer is “I won’t,” then he or she doesn’t understand health care. Or, more likely, they understand health care and aren’t in any mood to talk straight about it.
“Rationing” has a bad connotation, which is odd, because we ration just about everything. In fact, that’s what capitalism does best.
Not everyone gets an S-Class Mercedes-Benz or courtside tickets to the NBA playoffs or roses on Valentine’s Day. Who does? People who are willing to pay for them.
We call that a market, which is just rationing with a more attractive name. Everything worth having is scarce to some degree, so we use prices to figure out who gets what.
Health care is similar to German cars and basketball tickets — not everyone gets everything they want. But health care is obviously different in a crucial respect: People who don’t get what they want may become sick, stay sick, or even die. Unlike roses or Lakers tickets, health care is literally a life-and-death matter.
As a result, the most fundamental policy question related to health care is who gets what kind of care — or, put another way, how we choose to ration resources. Forget all the other complications, like aging baby boomers, malpractice lawyers, greedy drug companies, shockingly fat Americans, insurance forms in triplicate, and so on.
Do those things help to explain why our system is expensive and getting more so? Yes. But for anyone looking to control costs (e.g., a presidential candidate) those factors pale in comparison to the fundamental health care design question: Who gets what care and why? [. . .]
And therein lies the fundamental inefficiency of the American system. We have no good mechanism for saying “no” to expensive technologies and treatments that provide marginal benefits. If you’re a patient, that sounds terrific; your doctors will spare no expense. If you’re a business trying to keep up with skyrocketing health care costs, or a family trying to pay for benefits, it’s not. And, of course, as insurance costs go up, fewer people will have access to that kind of coverage.
At the same time, we don’t do a very good job of saying “yes” to treatments for the uninsured that would profoundly improve their health.
The combination of those two factors goes a long way toward explaining why the U.S. spends a ton of money on health care (15 percent of the GDP, compared to 8 percent for Britain and Japan and 10.5 percent for France) and gets relatively mediocre outcomes. . . .
In short, the rest of the industrialized world does a better job of rationing health care than we do.
Which brings me back to my original point. Every presidential candidate is going to talk about controlling health care costs. Most are going to talk about expanding coverage, too. Those goals are impossible unless we can design a system that says “yes” to the most cost-effective care — even very expensive treatments, provided they have corresponding benefits — and “no” to treatments with benefits that are too small to justify their costs. In other words, rationing.

Read the entire article. Wheelan doesn’t propose any solutions, but he does an excellent job of framing the issue. Stated another way, to what extent is American society willing to underwrite health care costs that individual citizens cannot afford — or are unwilling — to pay?