I don't know what incentive there is for providers to discourage over-utilization. Doctors get paid for doing stuff, not for promoting health or telling people to "walk it off" or "ignore the rash" or whatever.
Private insurance companies have all the incentive in the world to promote good health and under-utilization, so why have American's not done this? I don't know I'm no expert.
Something like 60% of a group's health costs are for 10% of the members of that group, IIRC.
Americans hold all the cards. I read somewhere that Americans used to spend 3 times as much of their household income on food than health care - and now that trend has reversed. Cheap bullshit food is fucking people up - and they end up paying for it on the back end in health care costs. I could be wrong, but I think the real cost of dialysis is about 40k per month - so a couple of lard-asses who can't put the bon bons down in your group plan are driving up your costs.
Insurance companies have tried to do this in the past in the form of HMO's. Care was restricted, went through a "gatekeeper" and was only covered if it was determined to be "necessary." This was widely rejected by the American public, so now most plans allow people to receive any care they want, whenever they want. And as a way to keep up with the Jones', they have to make sure they're covering all of the state of the art (read costly) procedures.
Ultimately, insurers and employers have done about as much as they can on the plan design side. There's only so much more in costs they can shift to participants. Studies have shown that 40% of costs are related to behavior, and companies are trying to impact that as well through wellness and disease management programs, but there is resistence there as well. We'll ultimately make some progress here, and it's already started to happen, but it will take time.
Medicare is an entirely different animal though. These are people that have made it to age 65, and the fact is, people are going to get sick at those ages. Cancer, heart disease, etc. We can live healthy lives, but it's difficult to avoid this in the long run. End of life care is a huge cost to the system, and Medicare is not going to avoid this cost. It's difficult for me to imagine a scenario where these costs are contained without some form of rationing, especially with the boomer generation reaching eligibility and a smaller population paying for it. Whether it's through some voucher program, where it's probably the poorer members who will be the ones left behind, or through some board approving certain services based on a cost benefit analysis of the case. Even in the latter scenario, though, the rich will be sure to get the care they need. Not really a political winner for either party, but ultimately something will need to be done to control these costs.
As an aside, you're right that a small percentage of claimants are generating a high percentage of the costs. Generally, the 80/20 (20% of claimants generating 80% of costs) rule still applies, but it's getting even more skewed at the high end, where it's probably about 40/5.
