More on the Health Care Problem
Here is a fascinating podcast: https://www.econtalk.org/keith-smith-on-free-market-health-care/
It's an interview with Dr. Keith Smith, who runs the Surgery Center of Oklahoma. It's a for-profit business that provides surgery of various kinds. They don't take insurance, and their prices are all posted online. Their prices are also radically lower than the prices at regular, "not-for-profit" hospitals.
Near the beginning, Smith describes quoting a price for a surgery to a patient over the phone. He quotes her a price of $1,900. The patient says, "That's interesting, because the non-profit hospital I talked to before you quoted me a price of $19,000."
Later in the podcast, he describes some of the scams that go on in the industry. When hospitals claim that they were underpaid (the patient didn't pay the full cost of treatment), they get money from the government. That sounds reasonable, right? They should be compensated for their good work.
This has caused hospitals to jack up prices to absurd levels, so they can regularly claim they were paid only a tiny fraction of the costs, so they can get more money from the government.
The hospitals make agreements with insurance companies whereby the insurance company only pays a fraction of the absurdly inflated price. This is all cool with the insurance companies too, because it enables them to claim that they negotiated unbelievable discounts (like an 80% or 90% discount) for their customers. It also makes it cost-prohibitive for a patient to get medical care without insurance, which is also fine with the insurance companies.