>When a hospital has an entire legal arm just for suing people in court, because they aren't making their payments, you know something is wrong.
A good example of this is the Ford Pinto and it’s exploding gas tanks after impact due to them being exposed. This resulted in multiple accidents and deaths. Ford later learned they could retrofit every Pinto sold for a total cost of $11 (in that years value) per Pinto. They decided not too because court costs per death would be less than the profit loss.
Without boring you with unnecessary details, it can be summed up as this: Does B < PL?
B = Burden of adequate precautions
P = probability that the defendants actions will result in an accident
L = Loss/Cost of accident if it occurred
When looking at hospitals, they understand the costs of hospitalizing someone for 3 days, 3 hours, or 3 years. They also know the costs of providing care to all of their patients without the thought of insurance companies reemburssing them. For them, the idea of shrinking profits in order to maximize care is not ideal. So, in this case, they will often charge insurance companies the maximum allowed, charged uninsuranced patients the maximum, etc. Why do they do this? Because for them, B<PL. The total cost of employing 10 lawyers to fight 100+ cases of defaulted medical bills or lobby for a new policy, that will still be less than the amount of profit they would lose if the hospital paid for all that care to begin with.