The Price is Right

A comparison of out-of-pocket costs reveals the complexities of imaging pricing.price is right

When does an x-ray cost more than an MRI? I found out recently, when a relative of mine needed both for a sports injury.

The MRI was performed at a high-quality outpatient imaging facility that was prepared to offer its “self-insured” price of $400, as the patient had a high-deductible health plan. The x-ray was performed in the hospital outpatient setting, another high-quality facility. The bill for the professional component was less than $10, while that for the technical component was more than $500.

I understand, as I’m sure you do, the many reasons for this apparently incongruous price difference. The hospital delivers care to the uninsured and has to be open 24/7. It trains the doctors of the future. The imaging center can be more selective and, in the face of significant reimbursement cuts and a competitive marketplace, is under pressure to maintain volume. Both services were delivered in ACR-accredited facilities and were of excellent diagnostic value.

How, though, do we explain these nuances to our patients as they transition to high-deductible health plans or are steered by their insurance company to the lowestcost provider in the area? Whether or not our patients understand the multiple moving parts of health care pricing, will they tolerate the complexity of our explanation? Do we as radiologists have a responsibility to help our patients get the best imaging care at a price they can understand and are willing and able to pay? I think we do. Certainly if we shirk this conversation, the marketplace is brimming with those eager to substitute for us. Castlight Health (www.castlighthealth.com) delivers pricing information to employers and patients. The company is the darling of the health IT venture capital world, with an IPO scheduled for later this year. The product, however, discriminates solely on price for outpatient imaging. Is this how we want our patients to decide where to be imaged?

A valuable provision of the Affordable Care Act is coverage of screening mammography with no co-pay or deductible. However, women who are called back for additional views may face sticker shock if they have not met their deductible. Under the new law, the diagnostic mammogram and ultrasound is subject to the “no co-pay, no-deductible” ruling. I recently spoke with Jeanne Pinder, the founder of Clear Health Costs (http://clearhealthcosts.com), a price transparency website. She did an informal and admittedly imperfect study in collaboration with our local NPR station to understand how much women paid for a mammogram. The highest price was $550 above the lowest price. The feedback she received from some women was that they perceived as poorer quality those facilities that called them back and exposed them to a significant out-of-pocket expense. I explained the benefits of batch reading of screening mammograms in terms of lower recall rates, but that is a message that we need to clearly articulate to our patients if we don’t want them to think twice about getting a mammogram at all next year.

Do we as radiologists have a responsibility to help our patients get the best imaging care at a price they can understand and are willing and able to pay? I think we do.

A concept that is gaining popularity among payers and especially among large self-insured employers is that of “reference pricing,” where a fixed amount is offered for certain procedures. Walmart, in its agreements with “Centers of Excellence” such as the Cleveland Clinic, offers its employees cardiac surgical procedures with no out-ofpocket costs using this methodology. The California Public Employees’ Retirement System saved $2.8 million in 2011 by using reference pricing for hip and knee replacements for its beneficiaries. Safeway is already using reference pricing for imaging. To avoid a race to the bottom in terms of pricing and eventually quality, we need to make sure that we are driving the conversation about how patients should select an imaging facility.

The imaging center that cared for my relative and was willing to make a deal on price will have difficulty keeping up with new technology if it can’t charge realistic prices. The hospital is at risk from MedPAC’s repeated calls for equalization of payments across sites of service. This was proposed but not adopted by Medicare for 2014 and will likely rear its head again in the 2015 proposed rule this summer. Price transparency is an issue that impacts all practice settings.

Nobody knows better than radiologists how valuable and powerful the tools are that we have at our disposal. And nobody can better explain to patients where the value lies as they make their health care choices.

I know this is a particularly thorny issue, but it is one that will not go away given the fundamental changes in benefit design that are now so prevalent. It is an excellent example of the need to demonstrate the value of what we do as radiologists and the urgency of embedding Imaging 3.0™ principles into our practice and into payment policy.

As always, I’d love to hear your feedback at This email address is being protected from spambots. You need JavaScript enabled to view it. and encourage you to follow me on Twitter at @DrGMcGinty.


article 2 headshotBy Geraldine B. McGinty, MD, MBA, FACR, Chair

Share this content

Submit to FacebookSubmit to Google PlusSubmit to TwitterSubmit to LinkedIn