Why US hospital prices are higher
The hospital that owns the only emergency department in town tells the job plan: pay 2–3× Medicare or your members are out of network. The plan pays, then puts it in the premium. It did not invent that rate. It also does not fight it — a bigger claims pile is a bigger premium, and they keep a cut. Other countries set one price for every hospital. Nobody here bargains as a country.
Secret contract, not a tariff
How it works
Medicare posts a public fee. Job plans do not use it. Each hospital and each insurer write a private contract — often 2–3× Medicare (RAND). The hospital is usually the one with leverage: consolidated systems, one emergency department in town. The chargemaster is the ask. 340B outpatient departments add a second markup on the same stay. The plan then socializes the rate in the premium.
Why it holds
It works for the tower because it can. Walking off the network is a threat the plan cannot match — the emergency department is the product. The plan is not a victim: medical-loss ratio means a fatter claims pile is a fatter premium, and they keep a cut. They want the door in-network more than 1× Medicare. Nonprofit status does not cap the commercial rate. Nobody in the room is bargaining as a country.
The invoices
See RAND hospitals, iFHP, Papanicolas.