> Pretty much in any industry, participants could collude to reduce supply to keep up prices. In practice, such arrangements are highly unstable, because individual participants have huge incentives to break rank and seek short-term profitability.

In addition to everything you said (which is true), in this case, the hospitals and doctors have opposing incentives. I can't imagine why hospital administrators would collude to increase their expenses (ie, their employees' salaries).

When Apple, Google, etc. were found to be fixing wages, they were trying to keep salaries down, not bring them up.