[jsmith45]

Yeah, although the negotions between insurance companies and providers theoretically should approach a functioning market.

It painfully obviously does not. It is literally a market with both buyer and seller colluding to raise the prices!

Why? A few reasons. Insurance profit is capped as a percentage of expenditure, so if they think there is more money they could extract from the insurance customers total if things cost more, it is in the insurance company's interest for prices to go up. Providers are not going to balk at getting mopre money.

This is only one of the many ways the system is screwed. The fact that medical billing coders need to customize the codes they submit for the exact same procdure to depending on what insurance company it is being sent to (for example, this is common for a procedure that is not a perfect fit for any standardized codes, or where some insurers are still using the older revisions of the medical coding standards, etc) and other similar nonsense also artificially inflates costs.

Basically everything about the system from top the bottom seems to be designed to prevent market based price discovery from working well.