Why is there such a massive gap between what insurers actually pay and what patients could get elsewhere? Take MRI scans—insurance companies are shelling out $2,500 for the same imaging that independent centers can do for $350. That's a sevenfold markup on identical services.

The real problem sits with how the incentive structure is broken. When intermediaries like pharmacy benefit managers control pricing without direct price discovery, there's zero pressure to be efficient. Hospitals charge whatever they can, insurers pay without questioning, and nobody wins except the middlemen taking their cut.

This kind of artificial price inflation doesn't just waste money—it distorts the entire market. It's the exact type of systemic inefficiency that happens when centralized gatekeepers control information flow and pricing mechanisms.