"Had O’Neill’s daughter, who needed surgery to remove tissue from beneath her tongue, not had her ears pierced, the total surgery bill would not have decreased by $1,877, The Post reported after receiving information from the hospital. Rather, part of the surgical costs were shifted onto O’Neill because her insurance company refused to pay for the ear piercing."

So - it didn't really cost an extra $1800 to pierce the girl's ears. But the hospital told the insurance that they were piercing the ears and included that in the bill, and the insurance company decided to reduce what they would cover.

Not saying hospitals don't over-charge for things - but this seems to be at least as much about the insurance company as anything. I'd be curious to get more details.