[pharrlax]

>If regular, predictable events are covered, it is not insurance. Regular, predictable events are not insurable.

The problem in the U.S. is that we have this bizarre system where hospitals charge exorbitant prices and then insurers haggle them down to something halfway sane. So when you're paying for "insurance" you're (ideally) getting both catastrophic coverage (i.e. actual insurance) as well as access to a cartel that negotiates prices down from impossible heights on your behalf -- even for routine care.

Since most people who regularly access medical care do so through these cartels, care providers have no incentive to make care more affordable than what they can get away with -- and insurers have no incentive to allow the price to drop either, since people being able to afford care outside the cartels would ultimately undercut their profits.

This system is fundamentally unworkable. There's really no way to detangle the perverse incentives here in a way that will bring prices down to a level comparable with single payer healthcare.

[kronin]

The ultimate reason behind hospitals attempting to charge exorbitant prices is due to Medicare and Medicaid paying under cost for services. Hospitals need to make that difference up somewhere. Surprisingly, if you remove the profit hospitals make on ancillary services like the gift shop, parking fees and investment income, they are losing money.

[maroonblazer]

Isn't the overly-litigious nature of the U.S.A also why costs are so high?

The malpractice insurance that docs and hospitals need to carry in order to defend themselves should they be sued is passed onto consumers in the form of higher medical costs.

Or at least that's how someone once explained it to me. Is that not also a contributing factor?

[patrickthebold]

That can't be true. They are not required to accept Medicare or Medicaid. If it was a losing offer they just wouldn't accept it.

[hockley]

The ultimate reason behind hospitals attempting to charge exorbitant prices is that you have no choice but to pay.

[isolli]

Hospitals charge high prices because they can. They are often local monopolies, and behave accordingly. And with an utter lack of price transparency, which makes the idea that patients could shop around a joke.

[EGreg]

There is a simple reason for the "cartel": it's called moral hazard.

You have the monopsony that comes from collective buying power on the one hand. (An argument for SINGLE PAYER insurance.)

On the other you have the usual moral hazard which says, if the customer ain't paying, try to charge as much as possible.

So it's this game of bigger and bigger armies. Same as when countries can't make a peace deal where neighborhoods and individuals long ago could have. A single person can torpedo a deal. It's all or nothing.

It's also why some British bureaucrats in the NHS face the choice of dropping coverage for a drug because the company just won't play ball and charge a low enough price. When are you willing to walk away when you represent a lot of people??