The honest answer is because that’s what insurer negotiation had led to with hospitals having using their negotiating position.
If you’re a hospital in an area with standalone MRI clinics the negotiation pressure is high, insurers can say “ill send patients elsewhere”, so you give on price, maybe below cost.
But that same hospital is the only cath lab in 100 miles. Great! We’ll just tell the insurer “we’re charging 300% the normal cost of a cath procedure, take it or leave it”. So the insurer takes it because how can you offer insurance and tell customer they have to drive 100 miles for a heart procedure?
Hospital is happy because they’re profitable overall. Insurer just lives with paying 3x for cath procedures in that area.
If you’re a hospital in an area with standalone MRI clinics the negotiation pressure is high, insurers can say “ill send patients elsewhere”, so you give on price, maybe below cost.
But that same hospital is the only cath lab in 100 miles. Great! We’ll just tell the insurer “we’re charging 300% the normal cost of a cath procedure, take it or leave it”. So the insurer takes it because how can you offer insurance and tell customer they have to drive 100 miles for a heart procedure?
Hospital is happy because they’re profitable overall. Insurer just lives with paying 3x for cath procedures in that area.