One issue here is that health care can get really complicated really fast. Which makes it quite a bit more difficult for many consumers to make an informed decision.
Because health care is complicated, in an idea world, there would be a layer to distill all of the complicated scientific information into simpler, scientifically sound recommendations. In theory, this is what your doctor should do. In practice, this system is currently broken in the United States. It is easy to demonstrate cases of over-treatment in the current medical system. (http://www.newyorker.com/magazine/2015/05/11/overkill-atul-g...).
If the consumer was paying for everything with full price visibility, would this change? I'm not sure. The problem here is a large amount of people would have no idea whether the prescription / test the doctor is requesting is worthwhile or bunk.
In fact, I think some of the over-treatment today is by "by patient request". One reason given for why doctors write antibiotic prescriptions for viral infections (which as we should know is scientifically useless and may in fact be harmful due to the potential of allergic reactions) is to make patients feel better by making it seem like something is being done. (http://ideas.time.com/2012/04/16/why-doctors-uselessly-presc...). The same probably goes for even more expensive cases (MRIs for most back pain cases, for instance).
Think of what we see in the "alternative medicine" market. There may be a few hidden undiscovered gems in that field, but in the majority of cases people pay sometimes a ton of money for what ends up being a rather expensive placebo effect at best (or harmful snake oil at worst). All of this both because medical science is difficult to understand (where glossy marketing is easy to understand), and also because in many cases medical science has unsatisfactory answers for people desperate to be healed.
I'm not saying that knowledgeable bureaucrats are completely correct (ideally the doctor and patient are making the informed decisions together, not the bureaucrats) but I can't see not having some layer that aims to eliminate the current perverse incentives in the system.