It only makes sense to talk about volume discounts when there is actual savings from providing volume (for example, less packaging). Many different instances of individual care do not create such savings, for anything but handling the make-work billing paperwork that this system itself generates.
This idea that individuals shouldn't be market participants is a broken assertion that underlies much of our healthcare dysfunction. In the situation you're describing, the "insurance" company has zero market leverage over the ambulance provider, and so you're championing a specious "negotiation". Meanwhile individuals that need a ride to the hospital avoid calling 911 since they have no idea what it will cost, and instead look to markets with price transparency to fill in (ie markets where they're welcome).
A straightforward healthcare reform would be to eliminate this cartel dynamic of providers having a different price for each "insurance" company, and mandate that they charge the same published prices regardless of who is paying. At that point, insurance companies would financially provide real insurance rather than their current function of bundling and obfuscating price signals. There would no longer be this "out of network" nonsense, but rather insurance coverage would be based on percentages of market prices. Insurance companies could then recommend providers that charge lower prices to save money for themselves and their customers, while still allowing their customers to be market participants when their preferences differ.
I do not assert this. I would much prefer transparent pricing and people being able to shop around.
> In the situation you're describing, the "insurance" company has zero market leverage over the ambulance provider, and so you're championing a specious "negotiation".
If this was true, then the ambulance company would not have accepted $500, and would instead demand the $12k they billed. It may be that the leverage is simply political or PR, but it must exist in order for them to come down from their fantasy list price.
I agree with your last paragraph, and that is the situation as of recent due to new laws passed about surprise billing and out of network restrictions for emergencies. As well as publicly listed prices.
Obviously, the $12k is ludicrous, proven by them being willing to accept $500 for people who belong to an insurance plan.
Health insurance in the US is not just insurance against a one time high cost event. One aspect of it is paying a business to gain access to lower pricing due to volume that you would be unable to get as an individual, which seemingly this person’s insurance plan did.