[AdamJacobMuller]

What's their incentive to reduce the cost?

They make money as a % of care paid out (max profit is capped).

More costs == more profits and the costs are just passed onto the people paying for insurance (both employees and employers)

[HPsquared]

In a normal competitive market a series of new entrants would come in and undercut the incumbents by charging 10% less than the competition, one after the other until a sensible price is reached. Why doesn't this happen? Also where does all that money even go? It's so insane.

[nostrademons]

Medical licensing. Can't practice medicine without a license. And if you're a doctor and you strike out and practice medicine on your own, a.) where are your hospital affiliations? your equipment? your support team of nurses & orderlies and b.) who's gonna pay your own health insurance?

Money goes mostly to the salaries of healthcare administrators and dividends for shareholders, with enough going to doctors and nurses to keep them from striking out on their own.

[AdamJacobMuller]

This is not a competitive market. It is a completely regulatory-captured market.

[1letterunixname]

There is no incentive except to commit highway robbery.

Pay, or pay and die.

It's the weakness and disorganization of the consumers who emboldens them.