Initially, the benefit was that people paid all medical expenses out of pocket and could purchase insurance in case of extreme medical issues.
Businesses started offering health insurance as a perk to attract employees and would negotiate a group rate. This benefits the business by both helping to attract / retain employees as well as helping to keep those employees healthy.
Labor unions campaigned to have employer sponsored health insurance which lead to insurance lock-in to a business, usually on 3-5 year agreements, without the employee having any say in where they were getting their insurance from or how much it cost. In effect, this removed health insurance from the consumer market. Compounding the problem, businesses could tax deduct the cost of insurance while employees could not.
So both the cost and quality of insurance was removed from the consumer market. Insurance removes the cost of medical care from the consumer market. Federal tax deductions only for businesses incentivize this arrangement.
The problem here is not caused by capitalism.
This is also before we take into account sheer supply/demand factors around doctors and the regulatory bodies involved in the supply side.
We buy car insurance and fire insurance expecting to never or rarely make a claim. We buy health insurance knowing we definitely will be making claims.
Supply and demand only works when you can establish a price equilibrium which absolutely requires that some people are priced out of the market. In healthcare that means massive disability and/or death. I don't think a fully free market in healthcare is in any way ethical.
Like infrastructure or universal mail/electricity/water, healthcare is one of those things where at least some elements cannot be efficiently delivered by a free market.
It turns out that there are very sharply diminishing returns to intensive medical care. And that getting the basics right -- pre-natal care, effective childbirth, well-mother-and-baby care, vaccinations, good nutrition, an environment clear of pollution and contamination (especially lead, mercury, asbestos, smoke, and miscellaneous hazards) has a tremendous effect on improving infant survival and adult capabilities in both physical and mental health.
The same precise services which lack of healthcare limit.
There are also specific interventions which can be hugely impressively. One doctor I know entered the profession after witnessing what a single dose of narcan could do to an ODing heroin junkie. (Mind, you've still got an addict to deal with after ripping them out of Death's Cold Hands, but you've got a live addict, not a dead one.) Wound care, reconstructive surgery, bonesetting, and treatments for at least some diseases and conditions are pretty amazing.
But people still eventually die, and putting of the inevitable is extremely expensive. The share of Medicare (and total) healthcare expenditures invoked in the last 12 months of life are quite high, though I've not the specific figures.
And the US healthcare industry, in cost for outcomes achieved, is horrendously inefficient. It remains unavailable for far, far too many people.