Quote:
Originally Posted by TheSpecialist
I saw that when I had surgery what was billed out by the hospital and doctors, and what was paid by the insurance was a big discrepancy. It also shows just how much the medical industry over charges if they can settle for the rates they agreed to with the insurance companies.
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Insurance companies and hospitals agree to pricing terms before an insurance company say "yeah, we'll allow our customers to use your doctors." The insurance companies leverage the wide availability of doctors to strong-arm hospitals into agreeing on cheaper terms. In turn, the hospitals utilize the volume increase to justify taking tighter margins.
Essentially, large insurance companies are provided wholesale pricing because of the leverage they hold in their larger customer base.