[react_burger38]

One interesting thing to note is that Medicare (US gov't paid healthcare for the elderly) pays hospitals DOUBLE the price for the same procedures that an MD can do in her own clinic. They pay this supposedly so that hospitals can take in patients who can't afford to pay in the emergency room, etc.

But to me this is another one of those cases where poor government policy boosts prices. Hospitals already have an incentive to buy up small practices to reduce competition, but if hospitals are paid double the price for the same procedure compared to an ambulatory clinic, the government is just incentivizing concentration in the market.