Patients and Pricing
Educating our patients about the true costs of imaging reaps benefits throughout the health care system.
I've written before about how we need to take a leadership role in helping our patients understand the value of the care and services we provide as radiologists.
A great Irishman once said "Nowadays people know the price of everything and the value of nothing." I take a different view from Oscar Wilde: if indeed our patients need a better understanding of the value of the imaging care we deliver, then that need pales in comparison to their need to understand the price of the services they receive.
The popular press has extensively covered the complexity and opacity of health care pricing. And I'd be willing to bet that most of us could not tell our patients how much they will be paying for their imaging services. The complexity is nothing new, with most providers seeing patients covered under myriad insurance plans, each paying a different rate. Also not new is the lack of transparency. While the College is extremely involved with advocating for increased federal reimbursement for imaging, antitrust laws prevent professional organizations from playing any role in setting fees with private payers, except for communicating to payers quality-based concerns about their potential or actual fee changes. Those providers who negotiated better rates are often contractually forbidden from publicizing those rates. And until recently, patients were to a large degree immune to the price of their health care (at least those who were covered by health insurance).
So what has changed? Increased insurance coverage under the terms of the Affordable Care Act has been accompanied by increased patient responsibility, with the average out-of-pocket payment before insurance kicks in estimated at $1,097.The $20 copay for an MRI is a thing of the past for most patients. More and more employers are offering only high-deductible health plans in order to keep down their costs. If you're a relatively healthy individual with a high-deductible health plan, it's highly unlikely that you'll spend more than your deductible, which could be $3,000 or higher. This means patients who need imaging are much more likely to be responsible for the entire cost of their study.
In the age of comparison shopping online, it is not surprising that patients are looking to do the same for their health care, especially for non-urgent tests for which they see evidence of choice in the marketplace. And products are springing up all over the place to help them choose. From crowdsourcing price transparency sites like ClearHealthCosts.com to commercial entities such as Castlight Health, it is becoming ever easier for patients to find the prices they are being charged.
And here is where it gets uncomfortable. There is huge variation in pricing. ClearHealthCosts shows prices for lower back MRI ranging from $400 to $1,200. So what does that variation mean? Is the higher-priced study better? Is it three times better than the lower-priced one? Is the lower-priced one automatically worse?
I can hear your questions because I ask them myself. Are any of these sites looking at quality? The answer is no. Does that absolve us of our responsibility as physicians, and can we point fingers at these sites and say they are doing our patients a disservice? I think that would be a colossal mistake. What we need to do is jump in and talk to our patients about what makes for a high-quality facility. We should confidently advocate for fair reimbursement for the services we provide. And yes, that is easier said than done.
So where do we start? Well, we cannot have the quality discussion and avoid the price discussion. So let's dissect some of the thorny issues. Hospital systems often charge higher out-of-pocket prices than independent physician offices based on their price list, or charge master, which updates automatically each year. We often hear the argument that nobody ever pays list price. But that doesn't really wash anymore. So we need to have a conversation with our hospital leadership about how out-of-pocket prices may impact our competitiveness, especially since more and more of us are employed by or providing services to large health systems.
Providing services 24/7 is expensive (as is training the next generation of doctors and incorporating the newest techniques into practice), and this often happens in the large hospital setting. So it should not be surprising that prices may be higher in these settings, but the question remains: How much higher?
Our patients need to know the costs of buying new equipment and paying building costs and staff. They need to know how aggressively commercial payers often discount payments to smaller independent practices that might have less leverage. Some of these prices, on top of huge payment cuts from Medicare, make it extremely difficult to stay in practice. Those practices may be offering cheaper prices, but are they good for health care in the long term if the practice cannot invest in new technology or hire the best trained staff? And if these practices cannot survive, what will this mean for patient access and overall health care costs?
Depending on our situations, we may have different perspectives on this. Your ACR Commission on Economics represents all radiologists as we try to serve our patients. For this reason, we take the approach that we should be fairly reimbursed so we can provide the highest quality care. We all wish we had easy answers about what imaging should cost, and I am not naive about the multiple moving parts at work. At this time, I believe the most urgent task for us as radiologists is to educate ourselves about the prices our patients are paying and educate our patients about what it takes to deliver high-quality care. We'll be continuing this conversation in future columns.
By Geraldine B. McGinty, MD, MBA, FACR, Chair