re: Everyone should request an itemized hospital bill, it is really interesting

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Doesn't matter. Pricing should be pricing, whether a person has insurance or not. Otherwise, it is a racket.

Name one other business model that operates with such a discrepancy between pricing models?

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Anybody want to know why? Back in the 70s and early 80s, almost all plans paid 70-80% of charges. 20-30% was coinsurance that the patient was responsible for. They paid 70-75% if you chose an out of network provider (really this wasn't till later 80s) and you paid more. In 1982 TEFRA (Tax Equite and Fiscal Responsibility Act) was passed by and that was the beginning of the DRG system where Medicare pays by diagnosis, rather than charges. This caused hospitals to completely change the way they did a lot of things. Patients went home sooner because you made more money if they did. The idea was that hospitals would operate more effeciently if they knew they got a flat payment no matter what. And they did. There's a lot more payment nuances, but through time, insurances went to similar methods of payment, but most of them switched to a per diem (per day) as most of their patients were healthier and had short stays.

So yes, began during Reagan and mostly pretty good legislation. But healthcare wasn't always like it is now. Remember the rule...you can pick 3, access, cost, and quality/technology, etc. You can't have all three.