Arnold Kling has said that economists do not save the useful economic thoughts and insights for graduate level courses but teach the good stuff in econ 101.
One of the pearls in econ 101 is that wage and price controls typically have some very predictable consequences.These are shortages,decrease in quality of the good or service, mis-allocation of resources and black markets.
The Center for Medicare and Medicaid services,CMS, has placed price controls on hospital care in the form of something called DRGs.
A patient admitted to the hospital with pneumonia is classified under the DRG system. A given DRG determines the maximal amount that CMS will pay for hospital care for a patient with that diagnosis.If the patient remains in hospital too long then the hospital costs will be greater than the allowed charges. This seems to be one important reason for the rise of the hospitalist movement in which physicians hired by the hospital can strive to get the patient home soon.
However, the governmental control over hospital care is not that simple.
Anyone who has been in a hospital or examined a relative's hospital bill will be struck with the fact that the amount charged is greater ( often markedly greater ) that the "allowed charge" ( the amount medicare or a private carrier will pay). So why is the bill configured that way?
See here for some information about the complicated details of the DRG system.
The difference between the allowed charge and the amount charged is considered to be "uncompensated care". The federal government gives a rebate to the hospital for some fraction of this uncompensated care for Medicare patients.
This rebate is not a secret but my guess is very few people know about this.In the strange world of government control ,this perhaps makes some sense in a non traditional sense of the word "sense",but to the non policy work it seems odd to impose price controls with one hand and the with the other institute a program to mitigate the effect of the control.