The insurance company is getting a volume discount. It sends all its customers--er, that is, patients--to some designated hospital(s). In exchange the hospital charges the insurance company slightly less. Perfectly normal capitalist business practice.
It's more than a volume discount. There is not any difference in the cost of providing care to an insurance patient than a non-insured patient.
The only difference is marketing costs. And there's not that much difference their either. In fact most people decide who to go to based on word of mouth, rather than insurance companies. The only way insurance companies are able to direct patients to doctors is by limiting the patient's choice.
There is no way that difference is justified by volume. But it occurs in part because of the way insurance companies negotiate. And the difference is also exaggerated by the way we make up for indigent care.
Volume discounts don't normally drive the price below the incremental cost of providing care (without fixed costs). But the difference between fully loaded costs and incremental costs are larger because fully loaded must absorb the cost of indigent care.