[colinmorelli]

This is not really what happens.

Hospitals and payers negotiate rates and contract at that rate before the service is provided. Assuming the service is not denied by the payer, the hospital knows that they'll only be reimbursed 18k from your insurance company (or at least has the data to know in advance, putting aside whether any one person could tell you what it will be). The 90k only served as a starting point for negotiation with payers and is usually obscenely high due to other regulatory and contractual reasons related to the negotiation process. Their "list rate" is shown on your bill, but was absolutely never expected to be received.

As a result, it's not a "loss" of revenue at the time of service, and isn't recognized as one.

Now, because GAAP requires revenue be recognized when realized and earned, that service became "revenue" to the hospital after service, even though they haven't been paid. They might later "write that off" (I.e. recognize a loss) if the payer ultimately denies that claim, or you refuse your responsibility (I.e. your copay). But in that case, the hospital did not, in fact, make the money.

[jdsully]

> usually obscenely high due to other regulatory and contractual reasons related to the negotiation process

Lets be real its due to greed nothing else.

[colinmorelli]

There are plenty of industries in which purely being greedy is much easier than it is in healthcare. Greed alone does not explain the depth of complexity involved in the US healthcare pricing system.

To be clear, I’m not defending the system either. It’s fundamentally broken by design. But it’s certainly not solely the greed of hospitals that got us here.

[jdsully]

Healthcare has a cartel restricting supply of new doctors, and new hospitals. Only a small number of new doctors can intern each year ensuring the relative supply decreases vs population. The same for hospitals - even if you have the money and the doctors you can't open one unless the other hospitals in the area agree one is needed and allow you to get a “Certificate of Need”.

But that wasn't enough to juice profits so pricing had to be made as opaque as possible to screw over anyone who isn't a giant insurance company ensuring the little guy without insurance who "pays his bills" pays more than 10x anyone else in the system.

I don't know of any other industry with this level of depravity and greed.