And that is one of the major problems in our health care system today. Unlike normal markets where prices are known, and guide commerce, true prices are hidden in the medical industry, and the published prices are wildly inflated. Thus as you noted, a $5000 invoice has $3200 in it that nobody is expected to pay. That means that the true price is nothing like what the invoice says it is.
But the patient without insurance still gets sued for the full $5000, and I wouldn't be surprised if the hospital writes off the full $5000 as "unpaid medical care" when they write up their financials. But for most patients the hospital is more than happy to receive the $1800 for the transaction, which of course is the real price.
One consequence of the fake pricing used by the medical industry is that it becomes impossible to determine what medical care really costs. Which number is the real price - the one on paper which is applied to some unlucky customers, or the price which the hospital agreed to provide the service for in its contract with the insurance carriers - a confidential document.
No other industry functions this way, and for most businesses this kind of fake pricing with secret pricing for different groups of customers is illegal. (and no, medical industry pricing schemes are unlike quantity discounts, or affiliate marketing discounts, contrary to what their defenders say.)
The first step to reforming our medical system is to force it to adopt open, published pricing like the rest of commerce.
But the patient without insurance still gets sued for the full $5000...
For openers, I would suggest that it is an enormous mistake to go without healthcare insurance--even if one is young and generally healthy--as a catastrophic accident can happen at anytime, as could the contraction of a chronic or lingering disease.
But if one is without insurance anyway, and gets socked with an outrageous medical bill, I would next suggest negotiating with the billing office of the healthcare provider (in person, if possible). Most people would rather receive a firm committment for something, rather than live with the (rather flimsy) hope of receiving an even larger amount.
One consequence of the fake pricing used by the medical industry is that it becomes impossible to determine what medical care really costs. Which number is the real price - the one on paper which is applied to some unlucky customers, or the price which the hospital agreed to provide the service for in its contract with the insurance carriers - a confidential document.
No other industry functions this way...
Most other industries do not have insurance as an intermediary. For instance, if one goes through the checkout lane of a supermarket, one can expect to pay the prices posted for the products chosen. There is no insurance there.
The same way with a hardware store. Or a discount store. Or a restaurant.