Hospitals Gouging?

I can't comment on 2-3 times as much, but often hospitals and doctors have negotiated prices with large insurance companies in order to gain referrals, etc. The negotiated prices are lower than standard price. Think of it this way: The hospital has less risk of not being paid when dealing with insurance companies so the insured folks are rewarded with a lower price.

The prices that insurance companies pay are also negotiated as a part of a large pool of users. And, the hospital wants something. So instead of getting $0 for a $100 bill, they get $60. They are still pretty much ahead of the game. Plus, insurance companies have auditors, folks who will pull out a charge for, say, Oil of Olay moisturizer and deduct a portion of the price because the hospital was supposed to use a cheaper alternative, like Keri lotion. It's in the little things, often, that big bucks are saved. $5 saved per hospital stay, at 2 million stays per year for your insureds (and this would be for a pretty small insurance carrier) means you're talking real money and it's just for lotion.