But aren't the prices artificially inflated to build in the supposed "discount?"

To use an analogy, it is like how vehicle manufacturers adds 10% to reach the MSRP, which is "discounted" at the dealership for every vehicle sold. It is a shell game, there is no winning when the game is rigged for the game's own existence.

If discounts were banned tomorrow on medical services, you'd see the costs drop significantly to reflect that.