This might sound pedantic, but as an economist, I feel duty bound to point out that "charge", "cost", "value", and "price" are different things.
In this case, the amount being charged is the provider's starting position in the negotiation process. It is not relevant to how much it actually cost to provide the service.
We are stuck with this system as a consequence of another attempt by government to try to control prices. Because companies were prohibited by government from paying workers above certain amounts, they tried to compete on other dimensions which were not covered by the wage controls. Then, the malady remained endemic long after the wage controls were lifted.
There are no rational prices in the U.S. healthcare system. The largest component of the system is Medicare, and it reimburses doctors using RVUs[1] which, if you squint enough, are based on labor theory of value[2] (the "value" of something is determined by how much work went into it rather than how useful it is to the recipient).
In this case, the amount being charged is the provider's starting position in the negotiation process. It is not relevant to how much it actually cost to provide the service.
We are stuck with this system as a consequence of another attempt by government to try to control prices. Because companies were prohibited by government from paying workers above certain amounts, they tried to compete on other dimensions which were not covered by the wage controls. Then, the malady remained endemic long after the wage controls were lifted.
There are no rational prices in the U.S. healthcare system. The largest component of the system is Medicare, and it reimburses doctors using RVUs[1] which, if you squint enough, are based on labor theory of value[2] (the "value" of something is determined by how much work went into it rather than how useful it is to the recipient).
[1]: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Paymen...
[2]: https://labor.alaska.gov/wc/med-serv-comm/CMS_RVU_Calculatio...