I used to work at a hospital doing a lot of the insurance stuff and yes, they have to bill way high so they can get a fraction of the cost. Especially when it comes to state programs like Medi-Caid (Medi-Cal) seriously, I'd see total bills of $70,000 and certain programs or even some insurance companies would pay a negotiated rate of like 5 to $10,000 on that $70,000 bill so I can see why they bill so much. You have to factor the over head, the Doctor, the nurse etc, etc, etc I mean, can you imagine what they would get reimbursed if they billed the cash price to these insurance companies? My gosh! they'd be lucky to get $1,000 on that bill! We wouldn't have any hospitals up and running.