Many years ago, I managed to stab my face with a screwdriver (not my proudest moment), and had to go to the ER. After the stitches, I was asked whether I wanted to pay with insurance. If I did, it was something like $2,000. If I didn't, there was a 75% discount off MSRP. My deductible was like 25%, so it ended up basically being the same out of pocket either way.
The fact that there seems to be a 4x markup means makes me think insurance companies are in bed with these hospitals. If you can mark up prices arbitrarily high, the insurance "discount" is fake.
From what I heard, doctors’ bonuses rates per unit of work are entirely calculated based on the specific hospital’s revenue from medical insurance claims; smaller hospitals can’t get as many patient payouts so their rates are lower and so are not as attractive to doctors compared to hospitals that can scalp well. So the prices do relate somewhat to what the hospital must spend on personnel, even if it’s arbitrarily engineered in the first place.
At Costco Pharmacy I stopped using my insurance plan as the co-pay was more than the no claim cash price. I learned later that my health insurance company owns its own pharmacy and they design the claims process to bias you toward their own pharmacy. Since medical loss ratio must exceed 85% on employer health plans they realize their excess profits by jacking up prices at their pharmacy subsidiary and using their pharmacy benefit manager subsidiary and insurance product to steer you toward overpaying if you just take their suggestion (e.g. $100 if you use OptumRX mail order Pharmacy for the "savings" versus $20 cash price from Costco).
The fact that there seems to be a 4x markup means makes me think insurance companies are in bed with these hospitals. If you can mark up prices arbitrarily high, the insurance "discount" is fake.