Health Care

America's Mixed-Up Markets for Medical Imaging


What’s the right price for an abdominal CT scan? The cost can vary by an order of magnitude, from as low as $300 to as much as $3,265, according to a report today from Change Healthcare, a company that provides pricing information to health insurers and employers.

CT scans aren’t unusual in this respect: Diagnostic imaging tests make up four of the eight procedures on Change Healthcare’s list of medical care with wide variations in price. The most expensive MRIs, mammograms, and ultrasounds are often three to five times the cost of the least expensive, according to the company’s data. The report is based on in-network claims from Change Healthcare’s health-plan clients, which cover more than 5 million people in the U.S.

Medical imaging has been a booming industry and a potentially lucrative service for clinics and hospitals to offer. That growth has raised concerns that the scans, especially those that involve radiation that raises the risk of cancer, are overused.

Where the tests are done influences how much they cost. “Only 19 percent of all imaging work done by radiologists is done in private offices,” the report says. Most of the 95 million scans done each year take place in hospitals, according to Change Healthcare, which are the most expensive setting.

Patients choosing between a CT scan that costs $300 and one that costs $3,000 might be inclined to get the cheaper test, especially if they’re paying out of pocket on high-deductible plans, all else being equal. But if more some scans deliver better results—more precise images that could show a small tumor, for example—they might be inclined to pay more.

A higher price isn’t necessarily a good indicator of a better test, says Ron Vianu, chief executive of Spreemo. The New Jersey company provides data on imaging to employers and workers’ compensation insurance carriers, which pay for radiology tests for workplace injuries. ”I would not say price is a good determinant of quality in any area of medicine, particularly in radiology,” Vianu says.

Insurers negotiate different rates with each provider, so two equivalent imaging centers could have vastly different charges. Hospital prices are even harder to judge, because hospitals bargain with insurers over a wide variety of services. “They may give a discount in cardiology, but as a result they may increase the price in radiology,” Vianu says.

And quality can vary widely, too. Newer, more expensive MRI machines deliver more detailed images, the same way today’s digital cameras have higher resolution than models from 1999. Better radiologists can read scans more accurately. The stakes for getting the right scan are high; mistakes during diagnosis, when doctors are still trying to figure out what’s wrong, can lead to performing an unnecessary procedure or delaying a needed one.

The bad news for patients: There’s no good way to find the best MRI, CT scan, or mammogram at the lowest cost. Spreemo is working on ratings for imaging facilities that take into account what technology they use and the skill of the radiologists. Patients can try to investigate the technology or doctors’ credentials themselves, but most wouldn’t know where to start. ”Today, unfortunately,” Vianu says, “there’s absolutely nothing [patients] can do to help distinguish.”

John_tozzi
Tozzi is a reporter for Bloomberg Businessweek in New York.

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