True, but physician fees are a relatively small part of a hospital bill. If you were hospitalized for something serious, even if all physicians worked for free there would still be a huge hospital bill.
That's why people need catastrophic health insurance - which can be a lot less expensive than the type of ‘all bells and whistles’ plan that the government wants to make you pay for. Medical Savings Accounts are a great idea for paying for doctor visits etc., and could be combined quite easily with catastrophic insurance.
Regarding why hospital costs are so high, it's multi-factorial. 24hr. availability of services is one of those factors. Consider the costs involved for a car accident at 2am in which the driver hits his chest on the steering wheel and the passenger hits their head on the windshield. They will be brought, probably by ambulance, to an emergency dept. that has a trauma team (or at least trauma experience). The passenger who hit their head will get a CT scan to rule out a bleed, will probably have had a neck collar placed at the scene and will have X-rays to rule out a cervical fracture, and will have admission to at least a floor in which they will get frequent neurological checks. All of that involves the availability, at 2am, of lots of people and equipment (e.g. CT scanner, radiology techs, nursing, laboratory services etc.).
That's if nothing is wrong. If there is an intracranial bleed then an operating room, OR nurses and technicians, post-op intensive care etc. will all be needed. Similar expenses will be involved with the driver who hit their chest on the steering wheel, although of course the approach and tests will be different. All of this for just one car accident.
The bottom line is that it is expensive to provide hospital services, and the availability has to be paid for, even if they aren't used. In my view, one of the best ways to deal with this is to have fewer hospitals, and to have speciality hospitals, such that there is less need for duplication of services within a given catchment area. In addition, if I were looking where to cut medical costs in general, I would be looking at how to decrease hospital administrative cost and how to avoid the creation of extended bureaucracies within hospital systems. People who don't have something to do directly with patient care should be kept at a minimum.
Finally, I would not allow physicians to be employed by hospitals or hospital systems. It would be fine if physicians are involved in ownership or administration, but I don't think it's a good idea to have hospital-employed physicians. This centralizes power too much in hospitals and their administrators, and diminishes the physicians ability to act as patient advocate. Further, it establishes a system in which hospitals reward physicians for the amount of money they bring into the system and not for their quality of care. Physicians should be judged by their patients and their outcomes, not by bean counters looking to bring more dollars into the system.
Long rant. Sorry.
“the availability has to be paid for”
The Canadian health care system depends on the excess capacity of the US system to take care of their overflow. You can make a very good argument that the biggest loser if we went to a Canadian style system would be Canada.
I wholeheartedly agree with you about the largest opportunity to reduce costs would be to reduce total administrative costs. Sadly, Obamacare will exponentially increase admin costs...