The nation's largest health insurer and data company, UnitedHealth Group, is in Minnetonka and one of the world's best providers of health care, Mayo Clinic, is in Rochester.

So you may be surprised when I tell you that some doctors say the most powerful force in health care in Minnesota is neither UnitedHealth nor Mayo. They say it's the state of Minnesota's budget office in St. Paul.

Their wariness of the agency, called Minnesota Management and Budget, is a tension most Minnesotans don't know exists. It's something that may grow in coming years, particularly in smaller communities where state employees tend to comprise a bigger share of the local employment base and health care services are consolidating as populations decline.

One of the duties of MMB is to manage health insurance for state employees and, in a smaller program, for non-state public employees whose employers choose to use it. In all, 160,000 Minnesotans are covered by the two programs, making MMB the largest purchaser of health care in the state.

For more than 20 years, the agency has balanced the competing priorities of access and expense with a different approach. While insurers create networks of providers and encourage customers to stay inside them, MMB assesses the total cost of care provided by all primary care doctors in the state, then assigns each doctor or their clinic to one of four tiers.

Those with the lowest total cost of care are put in the first tier, and members of the state plans who go to them encounter the lowest out-of-pocket expenses. The annual deductible for a family that goes to a doctor in tier 1 is $500, while for a family going to a doctor in tier 4 it is $3,000.

Galen Benshoof, enterprise director for employee insurance at MMB, said the system encourages doctors to hold costs down and saves the insurance program money. "There are very few frameworks in the U.S. health care system where it is truly competitive among health care providers in this sort of way," he said.

MMB assesses care costs every year and, every June, tells doctors and clinics what tier they will be in. Doctors hope to stay in the first and second tiers.

Dr. Christopher Wenner, who has run an independent family practice in Cold Spring since 2009, lost some of his patients after MMB's review put his practice in the third tier, where annual deductibles start at $750 for an individual and $1,500 for a family. He says it doesn't make sense. Data for other commercial payers shows that his fees are 30% below those at another clinic in town that's part of a larger health care system, he said.

"If I ran a high-cost clinic, I would understand that," Wenner told me. He has complained to both the agency and a local legislator that the tiering system "seems very arbitrary and capricious."

Dr. Julie Anderson, part of an independent clinic of a dozen doctors in St. Cloud, last year saw the practice placed into the fourth tier. She later determined, looking at data on reimbursements via Medicare and Medicaid, that her fees were lower than those by doctors affiliated with CentraCare, the St. Cloud-based health system that's a leading provider throughout central Minnesota.

For a routine office visit, she is reimbursed $227 by the federal programs while CentraCare physicians on average are reimbursed $355. "It's clearly obvious that we get paid less in private practice. I don't understand the logic of this whole theory that we are higher cost of care," Anderson said.

Benshoof said one reason doctors find themselves placed into higher tiers is that, when they refer patients to higher-cost specialists, those costs will be added into the total-cost-of-care assessment for their practice. "That's an accountability mechanism that just does not exist in most employer health plans, where any member can go to virtually any in-network provider," he said.

After I described the situations faced by Wenner and Anderson in broad terms to Benshoof, he told me the doctors may be facing another challenge because they are in central Minnesota. "That part of the state, when it comes to independent providers, on average is among the costliest in the entire state," he said.

"There could be an outlier within that group that on average does better," Benshoof said. "But because we have to group them in some way, someone might end up not reaping the benefit of being more efficient."

It's an answer that suggests independent practices face a disadvantage in the agency's assessments.

"The actuaries say that if it's a small clinic, and the costs are low or high, we can't know if that was attributable to their total cost of care performance, or total randomness in the patient population or someone got really sick or a couple of patients were super healthy that year," Benshoof said.

He said MMB will introduce more flexibility for independent clinics in its tiering process this year.