Michael Cannon at CATO on hospitals and costs:
The problem is that most hospitals do not operate in a competitive market. Many states pass regulations that block entry by new hospitals. Government interventions from Medicare to the tax exclusion for employer-sponsored health insurance block the creation of health systems that face greater incentives to offer a single “package” price and to reduce the uncertainty associated with surgical complications. Those same interventions also encourage excessive health insurance, which reduces the share of patients who pay out of pocket for surgeries in this price range. That reduces the demand for useful price information.
I am reminded of my own health care market. We have two hospitals. One is for profit. One is either a not-for-profit, or a similar designation. There is no real competition. It is improbable, given the things addressed above, that there will ever be more hospitals in this market.