[beerandt]

Medical prices being inelastic (to the extent they are) has much more to do with medicare/medicaid/FDA regulations, govt & insurance allowable reimbursement rate lists, and costly govt requirements to even participate in a govt funded plan (like electronic medical records).

Proof? Services not typically covered, like plastic surgery or cosmetic dermatology. Clearly listed and even advertised prices for their services, openly discussed up front.

But if the govt reimbursement rate for an annual checkup is $x, why would anyone need to list that price up front, or have reason to ever charge any less?

[refurb]

Your last comment is the reason for the massive gap between list price versus net price in the US system.

The US has a rule about “usual & customary price”. That’s a legal definition and providers can’t charge any customer more than that.

If you’re looking to price discriminate, you set your U&C price as high as possible, maybe 2-5x what you’d accept. That way if you find a customer willing to pay 4X, you’re not running afoul of the law.

For everyone else, you negotiate a much more reasonable net price, typically through insurance.

The people who get screwed in the end are ones without insurance. They get billed the imaginary number nobody ever intended anyone to pay.