You are not hiring insurance companies to do the second part but they do it any way in order to increase their profits. They should be removed from this role via legislation.
The first part is necessary, because hospitals and drug companies would charge even more if nobody tried to control the prices. But the consumer is the best person to keep prices in check. It is challenging because consumers of the knowledge asymmetry. Regardless, the consumer needs to feel the cost.
One employer I know of has an excellent solution to the problem: Make employees pay 100% of their medical bills up to an out-of-pocket maximum, such as $6000. That's a large amount, but the employer then contributes a large amount to your Health Savings Account (HSA), such as $4000. This amount is for you to keep regardless of whether you have any medical bills or not. (This money can be used for medical expenses only, but can be used any time, including after retirement). So the maximum you will spend out of pocket per year is $2000. How does this encourage the consumer to scrutinize and control medical expenditure? Because the first $6000 of medical spending in a year is "your money". This is money you'd be able to keep in your HSA if you didn't have any medical expenses. This gives the consumer a strong incentive to reduce costs, question charges, avoid unnecessary services, and so on. When physicians and hospitals know that patients are scrutinizing care plans it will force a cultural change. That cultural change will subsume older practices.