Drugs aren't the best example since they are inexpensive (at least the ones I've purchased). But if I had a more expensive surgery where I was on the hook for 20-40%, I might be incented to negotiate or shop around. And you'd certainly think the insurance company would be highly incented to negotiate.
"Drugs aren't the best example since they are inexpensive (at least the ones I've purchased)."
There are some very expensive drugs, and they're not uncommon. For example, valcyclovir is a very common anti-viral drug, and costs something like $300-400 per course. The similar drug acyclovir is $20 as a generic, but is more annoying to dose. As a result, doctors will nearly always prescribe valcyclovir over acyclovir. For patients with a chronic infection, that's a mundane decision with an impact of tens of thousands of dollars per year. But unless you're a doctor or a pharmacist, you'd probably never know about the choice.
Insurance companies pass these costs on to the risk pool first, then onto employers. By the time the cost increases hit you (through employers cutting or reducing your health benefits), the implications are so far removed from the initial expenses that there's no way to close the cycle.
