Overcharged explains that hospitals and pharmaceutical companies can charge such outrageous markups solely because government grants them anti-competitive monopoly powers and encourages widespread third-party payment, where nobody has an incentive to curb excessive prices.
If you ever read the EOB’s (Explanation of Benefit) from your health insurance company you might see something like this. Even so, it still doesn’t explain the whole story:
After being bitten on the foot by a snake while taking out the garbage, Eric Ferguson went to the Lake Norman Regional Medical Center, where he was given anti-venom and monitored. The hospital’s list price for the medication was $81,000. The discounted price his insurer negotiated was about $20,000. The retail price of anti-venom online? $750.
The government grants and maintains monopolies to hospitals, drug companies, etc. That’s not even the whole story.
We need to let “consumers—rather than politicians and employers—control the $3.9 trillion Americans spend on health care each year. “