Hospital bills are grossly inflated.
There are the so called “gross” charges, which is likely what this $200,000 consists of. This is the gross revenue for the patient stay.
Then there is the “net revenue” or “net collectible” amount which the hospital expects to actually receive in payment. This amount is generally about 20-30% of the gross charges.
So, in round numbers, 30% of $200,000 is $60,000 that the hospital might expect to actually receive a check for to pay for this patient’s stay. And the insurance company pays the bulk of that.
A good analogy is airline fares. The full coach fare from New York to LA may be in the neighborhood of $1500 to $1800. Yet the price you actually pay can easily be in the area of $300 to $500. Very few people pay actual full coach fare for a plane ticket. And very few people pay that actual full cost which shows up on a gross charge hospital bill.
I'll bet gruberment types do - last minute, full boat price.
"Because we had orders."