There's something called an "uncompensated care pool" that serves as a perverse incentive for medical providers to issue insanely high bills.

Say they charge $10,000 for a procedure that costs them $500. They collect $1000 from the insurance company and claim a loss of $9000 in the "uncompensated care pool" for which they can apply for a government rebate at the end of the year.

The practice originated to help reimburse hospitals that provided charity care, but it's morphed into something entirely different.