You're partially right. When you see someone be charged an outrageous amount for something that should be fractionally cheaper, that's a different reason. You s

You're partially right. When you see someone be charged an outrageous amount for something that should be fractionally cheaper, that's a different reason. You see, hospitals mark up prices astronomically so that when they make deals with insurance companies, they can say that they saved xx% of the cost. Which looks good to them, and the hospitals don't loose that much making deep discounts. Then goes in a poor sucker with no insurance who has to pay full price. Example: Hospital price for a bandaid: $100 Blue Cross says they want 80% discount Hospital says ok Blue Cross looks good because of how much money they saved Hospital still makes good profit