Hospitals, in order to ensure they have enough cash on hand on a macro level, spend a lot of energy playing the markup and discount game. In fact, they are consumed by it. For example, if a hospital made $100 million the prior year, dialing up all bills by 5% as their expenses go up by 4% is a safe bet without having to accurately itemize every service. Hospitals use software called the “chargemaster” that automatically inflates prices to achieve a desired margin.
