> More of a federal Medicare problem because the government runs an insurance plan that fails to throw its heft around and negotiate beyond “you can’t charge us more than other insurers”.

You've got it backwards. Medicare does negotiate, in some cases reimbursing less than COGS. Hospitals and providers make up for it by charging private insurers more (that's why private insurance contracts always state that they reimburse X% of the Medicare Allowable Rate, where X > 100).