[thedataslinger]

It's not because Medicare offers a "blank check"; after all--the amount of revenue that the hospital can generate will always be hard-capped by the number of beds+/physicians+/resources available.

They go with Medicare because the pay-out rate (i.e. "collect-ability") for billable services is much higher--and much more predictable--than if they attempted to collect/negotiate with non-governmental providers. A LOT of money is lost by hospital systems due to unpaid patient responsibility (e.g. insurance deductibles), which they can minimize by offering only services already guaranteed to be covered by Medicare.