I had a boss who helped negotiate with insurers for a large academic medical center. "List" prices were high because the folk negotiating for the insurance companies needed to take big discounts back to their bosses. (The negotiator's bonuses depended on how big a discount they could get.) The bottom line cost at that time was less important to the insurer than a 71% discount. The hospital would raise the "list" price so that the percentage they got was always increasing in absolute dollars. 30% of $1000 is less than 29% of $1100.