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The entire health insurance business, I think, started in Texas with Blue Cross/Blue Shield.
back in the 1930's as hospitalization and physician insurance, respectively, for teachers.
The plan coverages were, and still are, based on "usual and customary" fees;
but "reasonable" has been added now that BC/BS licensees process Medicare for the feds.
I don't think competition between physicians was a mechanism, and probably still is not.
It was/is insurance to assure payments to the benefit of hospitals and physicians.
Probably the only path to holding down health care costs is now thru Medicare/Medicaid limits,
and I hope the policies dictated within the Obamacare exchanges will eventually do that.
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