[SilverBirch]

There's a slight difference here. In the Hammer case what's happening is the government is negotiating the totality of a deal, so yes there are expensive hammers, but there's cheap other stuff. The hammer isn't important, the total contract is.

In the hospital case something much more nefarious is happening - the hospital negotiates discounts with the insurance companies, but in order to make money they inflate their costs in the first place so they can negotiate back down to a reasonable number with the insurance companies. Someone in an insurance company somewhere gets a good pat on the back for getting a great discount. But on the back side of this now if you don't have insurance the hospital is going to hit you with ridiculous costs forcing you to buy insurance. It's collusion between the hospital and the insurance company to screw the consumer.