private medical insurance

sirlearie

can anyone please explain why insurance companies agree contracts with private hospitals at significantly higher rates /charges/fees than the hospitals would charge to a private individual ?
this is increasing health premiums whilst seeming almost fraudulent ie. how can you charge 2 rates for the same procedure ?
sirlearie.

InsideInsurance

I have never worked for a PMI provider so cannot comment explicitly for them but in general you will find many companies charge different amounts for the same product depending on who the buyer is, distribution channel, what is and isnt included etc.

For example, with a previous employer, we always booked Hilton hotels for business trips and we always had to pay the rack rate which is much higher than the consumer price but (1) in many hotels we have guaranteed availability (2) whilst we paid up front full price at year end a rebate was given based on a sliding scale depending on how much business we had put through the company as a whole