Why was hospital treatment very rare from 1250 to 1500?

It is hard for a modern person to understand what life was like back then. Medical services have changed completely in the last thirty years, and again in the thirty years before that. Sixty years ago, medical schools were small colleges and there were plenty of them. Medical advice was a lot more holistic, and doctors didn't really know very much. Thirty years before that it was still possible to apprentice into the doctor business. A hundred and fifty years ago nobody even knew where babies came from except that you had to have a woman. Fifty years before that, hand washing was still considered junk science.

Then you have the evolution of the hospital. That originally was a Christian concept for poor people. Anybody with a steady job got treated at home. That attitude continued well into the 20th century, and then the medical establishment was taken over by the upper classes. Any medical college that did not earn their approval got closed down. Various laws were passed making doctors self-policing. During WW2 the government limited salaries, so companies began offering insurance to draw workers. The thing about insurance is that if anybody has it, prices get driven up so everybody has to have it. And that brings us to where we are now: county hospitals exist for poor people because anybody with a steady job has insurance.

Here's the way it works. When most people pay their own medical bills, the doctor sits down with the patient and they discuss options and costs and decide what to do. When most people have insurance, that discussion does not take place. Tests and second opinions that would otherwise have been optional are automatic. The doctor hires more staff to fill out the insurance forms and keep extensive records. The doctor has to have the latest equipment to be sure his diagnoses are legally defensible. Everybody knows the bills are covered, and services are assumed to be competent. All of this, the extra tests, the second opinions, the documentation, the equipment, has to be paid for, and the cost goes on the patient's bill. The insurance company's only concern is that charges are necessary and reasonable.

Please notice that I have not suggested any form of deception. All of this is normal, honest, and unavoidable. Increased medical costs are automatic when most people have insurance.

But normal market forces are still at work. Demand is limitless, but services are scarce. In a normal market, demand is controlled by costs. When that restraint is removed some other method must be found to keep demand equal to supply. One way to limit demand is to make patients wait. When there aren't enough doctors to treat people as fast as they come in, patients must wait. Those that can't or won't wait go away. Travel to a treatment center has the same effect. When the market is controlled by costs, people who really need treatment can get it by paying the cost. When the market is controlled by some other method, individuals are prevented from making their own decisions about what they really need. They can only get treatment by waiting, or by obtaining some sort of official approval or professional reference, that is to say, by political influence.