The ability of an insurance company to monitor the performance of the thousands of doctors that are on the ground is minimal. One widely recommended solution for this is to move away from fee for service medicine toward bundled payments, so-called or sometimes called value-based care. And more that would help control the type of things you've encouraged these unnecessary tests and overpriced sale on bags in hospitals.
Economist Ed Dolan of the Niskanen Center talks about employer-based health insurance with EconTalk host Russ Roberts. Dolan discusses how unusual it is relative to other countries that so many Americans get their health insurance through their employer and the implications of that phenomenon for the structure of the health insurance market. Dolan explores the drawbacks of this structure and makes the case for what he calls Universal Catastrophic Coverage.