A Federal Trade Commission study yesterday recommended that doctors be removed from control of local Blue Shield health plans to save the nation at least $100 million a year in fees.
Release of the controversial study coincided with a move in the Senate to gut the investigative powers of the FTC. The Senate Commerce Committee voted overwhelmingly yesterday to kill the agency's authority to regulate such areas as children's television commercials, the insurance industry and consumer product standards.
According to the Blue Shield study, doctors fees average 16 percent higher when the local board of the health plan is controlled by doctors.
Blue Shield Association senior vice president George Heitler immediately responded by saying the FTC report was "without foundation."
"It ignores fundamental realities of health care economics which preclude Blue Shield plan board members, including physicians, from increasing health costs," he said. "It also ignores the organiation's history of vigorous and innovative cost containment programs and projects."
The FTC study said it used "standard statistical techniques" to explain variations in the fees paid to doctors by various Blue Shield plans around the country.
"While it is difficult to predict the net effect of physician control on any individual plan, the results generally suggest that physician control may be associated with significantly higher fees," the report noted.
At the same time, according to the study's authors -- David Kass and Paul Pautler of the FTC's Bureau of Economics -- the participation of physicians in running various Blue Shield plans did not, as has been speculated, significantly reduce administrative costs of those programs.
"The relationships between administrative costs, claims processing efficiency and physician control of plans were also examined in the report," the FTC noted. "However, no conclusive evidence was found indicating that such control significantly affects plan operations."
In addition, the report claimed, having doctors on Blue Shield boards did not result in claims being processed faster or with fewer errors.
This finding was also disputed by Blue Shield's Heitler, who said his organization's studies indicate "that larger percentages of physicians on plan boards and greater involvement of medical societies in the selection of board members are associated with both lower maximum customary allowances and lower average payments to physicians."
"We are puzzled as to precisely how the FTC staff obtained results opposite of those we previously found," said Heitler.
The FTC staffers did say that there were "several caveats" in their study, including some weaknesses of their figures.
In 1976, the report noted, Blue Shield enrolled 46 percent of all individuals covered for surgical care by private insurance plans in the U.S.
In 1977, the report noted, 43 percent of all Blue Shield enrollees were covered by plans in which physicians comprised at least 50 percent of the board.
Blue Shield plans are non-profit organizations which provide medical/surgical insurance to large groups, sharing coverage with Blue Cross -- which covers companion hospital cost insurance.