Regarding over-utilization...
There's research showing that utilization varies by type of insurance, and as expected, utilization increases as the patient becomes less financially responsible. That doesn't necessarily mean over-utilization. It's pretty tricky define what over-utilization is anyway, which is not to say that it doesn't exist. I, for one, don't like seeing the doctor only to find out that it's nothing to worry about, but sometimes I just don't know. Education is part of that, and one way to deal with it is through increased education. Our pediatrician gave us an excellent pamphlet (well, small book) about when and when not to call. We consulted it numerous times. They also have a triage nurse to answer questions and decide priority. Nothing like that exists with any GP I've ever had. I just call and ask for an appointment.
One interesting aspect of over-utilization is imaging. MRIs, for example, are very expensive. The costs for the same MRI can vary greatly even within the same city (25% or more). What's disturbing to me is that from the perspective of the imaging lab, an MRI machine has a high fixed cost and, from what I can gather, a relatively low per-use cost. For example, the big MRIs at full power consume about 44 kilowatts per hour. That's a lot compared to a household, but with electricity costing about 15 cents per kilowatt hour, that's less than $7 (the 24/7 bill would be over $4,500/month). There's also the cost of films, but I don't know what that is. Yet prices for MRIs range from $400 to $3,000 (or even more). I'm still puzzled as to why a single breast MRI costs more than both breasts (according to
this estimating site). That same site says that an abdominal MRI cost ranges from $1,600 to $6,600 in the USA.
Everything else for an MRI is a fixed cost. You have to pay a technician to be there whether it's used or not. Rent is paid whether it's used or not. If they run MRI shops like other businesses, they work out the fixed costs and per-use costs, then project a utilization rate in order to determine how much to charge to turn a reasonable profit. If doctors refer more patients for MRIs, utilization goes up. The cost to the insurance company goes up (or to the patient). Most likely the profits for the MRI shop increase. Conceivably the shops can compete on price, but considering they are usually under at least yearly contracts (I'd want to sign longer term contracts so that I could better project my utilization rates), the price competition factor is relatively small.
It's really quite complex. Interestingly, auto repair shops have a flat rate and typically don't charge for using machines if needed. They also charge the same hourly rate for replacing a dome light bulb as they do rebuilding a transmission. It
seems that medical billing is not so closely tied to time. Perhaps those with experience in billing can chime in on how well correlated the reimbursement rates are to time required.