It's pretty bad probably. It's basically a system that is incentivizing companies to make lots of money where a lot of the checks and balances are misaligned (in some cases intentionally so) which further enables this. So, you have pharmaceutical companies charging extortion rates for products that they sell for next to nothing elsewhere. Insurers that squeeze their patients hard. And hospitals that blindly prescribe medication because the patient demands it because they pay so much money for their insurance. Hospitals don't care because it's not their money and they get to bill the insurer for all sorts of bullshit. Insurers simply raise the prices for their customers. And they can actually cut loose patients over all sorts of technicalities so patients don't complain about this.

Aligning the incentives is pretty hard but not impossible. The Dutch system was facing rising cost a few decades ago. It was split in a private insurance and public insurance system. Privately insured people enjoyed all sorts of perks (like private hospital rooms, less waiting time, etc.). The same system still exists in Germany (I live there currently).

To improve financial efficiency the Dutch government decided to get rid of public insurance and empower people to switch insurance. Everybody has to have insurance, all the insurers are private, and they have to compete to keep people as they can choose to jump to another insurer and they don't get to reject people. They all have to offer the same base package of care to everyone but can choose to diversify on top of that. This results in people shopping around and being treated like customers by insurers.

The second thing they then did was empower insurance companies to make deals with care providers. After all, they are paying the bills and if some hospital is being inefficient, they have to pay for it. They can't reject patients. But they can make deals with certain care providers or refuse to do business with others. This incentives care providers to align with insurers.

Likewise, pharmacies that supply medication are incentivized to look for cheaper alternatives. So, pharmaceuticals end up competing with each other for some things and pharmacies will pick what's cost effective rather than what doctors prescribe (in case of compatible alternatives).

It's not a perfect system but it has resulted in hospitals and insurers improving their game and getting rid of inefficiencies or bad service. Bad insurers lose their customers, inefficient hospitals result in insurers taking their business elsewhere and they suffer financially. Smart hospitals and insurers align what they are doing and avoid needless treatment. Patients and employers shop around for the best insurers based on the needs and means and to get the best rate and care or access to their preferred care providers.

I actually live in Germany which has a system that resembles what things used to look like in the Netherlands. It's a bloated, inefficient system. There's stupid bureaucracy left right and center, endless referrals and waiting lists, and you are treated like cattle. I have private insurance so I get to jump the queue but I also get to deal with doctors that are a bit too trigger happy with treatments and needless appointments that they can squeeze the insurer for. The insurance is super expensive for me. And I can't easily switch insurer so they can squeeze me hard and up their rates. The hospitals are pretty bad and miserable compared to Dutch hospitals.