Public Representation on Boards and Blue Shield Allowances

GAO was asked to determine if there is an ascertainable difference in cost-containment efforts between Blue Shield plans with boards of directors apparently controlled by public representatives versus those with a majority of health care provider members.

GAO analyses neither conclusively affirmed nor denied that public representation on Blue Shield plans' boards of directors was importantly associated with the plans' cost-containment efforts. Public member representation on the plans' boards was rarely statistically significant in explaining differences in the amounts the plans could pay to physicians. Medical society influence on board member selection also was rarely significantly related to the plans' customary allowances. Neither public representation nor medical society influence was important in explaining differences in allowances for plans which had only one geographic payment area. However, other factors GAO examined were often significantly associated with differences in customary allowances. Higher allowances were frequently associated with whether (1) the plans had a million or more subscribers, and (2) per capita income was relatively high in the plan's service area. Frequently associated with lower allowances were increasing percentages of (1) area residents served by the plans, and (2) physicians who had agreements with the plans.