In dentistry we have seen the impact of this pressure and how it affects conscientious dental providers and our patients for the longest duration (decades).
The dental insurance carriers have sent their insured clients to the offices and providers who in essence will accept the lowest fees. This pressure over decades has significantly degraded the quality of the average care available to the public. There has been no attempt to cull or weed out the substandard providers in our profession supported by this "accept the lowest reimbursement or lose your patients" system; as a matter of fact some of those substandard providers have become the most successful. There needs to be an outside system that does this evaluation without a need for government or bureaucratic operation.
As a provider the way you get on “the preferred provider” list is by agreeing to all of the carrier’s often restrictive guidelines and very often fees so low that providers drop many of these procedures from treatment options. This environment over time inevitability leads to cutting corners, dropping standards or switching (up-charging in essence) to a more profitable procedure that may not have been necessary to begin with and to add insult to injury with consistently lower quality results. Over time these options, or going out of business if you are contentious, are the only options for staying in your profession. All of our other health care systems are under the same pressures and should look at in the dental model for insight, unintended consequences and possible solutions.
In Dentistry, as in other areas of life, you rarely ever get something (durable quality outcomes) that you don’t pay for. You may pay for something you never get but the opposite of getting something you don’t pay for is almost always true and everyone knows that.