> Fancy new buildings Rarely paid for with reimbursement revenues. > giant endowments Definitely not paid for with reimbursement revenues. > amenities for s

> Fancy new buildings Rarely paid for with reimbursement revenues. > giant endowments Definitely not paid for with reimbursement revenues. > amenities for staff Try cutting these, and see how quickly 1199 SEIU comes down on you. > raising administrator salaries "to retain premium talent", etc. Even if you assumed that there were no relationship between the wages paid and the quality of work performed (there is), these are nowhere near big enough to account for the difference. They're also not that far out of line with other countries, either: 25% in the US, compared to 20% in the Netherlands, for example. But more so than that: they're SG&A expenses, which are further down the balance sheet than the reimbursement revenues. And yet, hospitals actually lose money on the top line for Medicare patients (who represent about 40% of the market). That's the real reason reimbursement rates are raised for private insurers - the private insurers are required (by law) to pay more, and they need to subsidize the sub-COGS reimbursements from the public insurers (Medicare, and to a lesser extent Medicaid). So no, none of the things you listed actually explain the reason hospitals charge private insurers the rates they do.