The federal government already
pays (either directly, for Medicare and Tricare) or indirectly (Medicaid) around 45% of healthcare expenditures in the United States, and regulates nearly every aspect of healthcare delivery in some form or fashion.
There’s an awful lot of small-government posturing that goes on, but it is not accurate to say our system is the result of a small government approach.
To provide just one concrete example: in the 80s, we had problems with hospitals “dumping” indigent patients. In some cases, they would literally take homeless people who showed up needing medical attention to some random part of town and drop them off on the side of the road.
Naturally, there was public outrage about this. Demands that it stop.
There are, of course, many ways a society could address this problem: a single payer system, a nationwide indigent care fund, etc.
Here’s what we did: as part of the Consolidated Omnibus Budget Reconciliation Act of 1986, the federal government stipulated that any hospital which accepts Medicare/Medicaid[0] and which operates an emergency department must provide “stabilizing care” to anyone who shows up at that emergency department with an "Emergency Medical Condition" before inquiring about the patient’s ability to pay[1].
This law did not stipulate that those hospitals, or the doctors who practice at those hospitals, be reimbursed in any way for providing that stabilizing care, just that they provide it.
Naturally, doctors and hospitals consider this an example of a heavy handed government engaging in cost-shifting. CMS countered with a paper written by one of their economists that what they do here is not technically “cost-shifting” for reasons.
Hospitals now employ staff to get uninsured patients who qualify for Medicaid signed up so they’ll get paid.
(I haven’t seen stats on this in several years, but the last numbers I saw were that around half of US hospitals lose money on an operating basis. They make up the balance in the gift shop, cafeteria, endowment if they are lucky enough to have one, local taxes, or bankruptcy court.)
0 - that’s basically “all hospitals”
1 - the actual rules are more complex, but that’s the gist of it