Suppose you go to a hospital emergency room. When you leave, you're handed a bill that reads:?

Worked in a hospital billing office and accounts receivable office for about 10 years. What you described happens, just not as simplistic as you lay out. It is common for hospitals in putting together what their charges will be for them to account for a percentage of uncollectibles. This varies by the size and location of the hospital but it is there.The hospital I worked at would then once a year, be able to write off a portion of that uncollected debt on their corporate taxes. I've heard of some that even kept track of it as 'pro bono' work and then also wrote it off as charitable donations.