Everything already has an error margin. The difference is that the entire error margin is paid by the unlikely few who turned to cost more than expected. The point is to reduce risk by spreading the cost between those unlucky enough to have incurred extra with the rest of the patients.

If the actual cost of covering the unexpected costs is less than the margin they are tacking on, then that is simply over charging, and is not meaningfully different from the overcharging they can do anyway.

Show me an example of a price ceiling that doesn’t raise prices.

Interesting complaint. The common downside of price ceilings is that they prevent raising prices, leading to shortages.

Regardless, I am not proposing a price ceiling, I am proposing determining the price prior to rendering services.

They do that too, but given a ceiling of $1, the vendors who sold the widget for $0.95 will raise the price.