Monday, October 11, 2010

First bend in the health care cost curve

Recent trends in radiology imaging portend a dramatic and rapid reduction in this segment of a hospital's business plan. Even before capitated (or global) payments have come into full play, there has been a large reduction in the number of some types of imaging studies in hospitals.

Our Chief of Radiology summarizes our experience -- common to other hospitals as well -- and provides some of the reasons.

The biggest hit has been in CT, the modality we are most dependent on for revenue. We are about 10% down in CT cases from last year, due to a combination of patient and physician fears about radiation exposure, more prudent ordering of studies by physicians, leakage out of the medical center, and the introduction of physician incentive programs (to minimize the amount of imaging) by some insurers.

Also, and very surprising, we have not seen an upswing in ultrasound or MRI to match the CT volume drop. We have, however, seen an increase in the number of patients arriving with their scans on CD ROMS having been imaged at other lower priced vendors. We don't bill for these interpretations even though we are frequently asked to reinterpret the studies for our clinicians, and BIDMC is paying to store these images on our PACS systems.

By the way, this occurred while our overall patient volume increased during the same period.

The result of these trends will be to reduce the number of radiologists working in hospitals, and there will also probably result in a reduction of salaries for this physician specialty.

16 comments:

Anonymous said...

The "Obvious"

Medicare Advantage Cuts a la ACA:

AARP = Rationing
ACR = Efficiency

Decreased Demand for Imaging Due to Changing Market:

AARP = Efficiency
ACR = Rationing

You can write the rest of the story...

Elaine Schattner, M.D. said...

I wonder if people are more fearful now, after so many errors in CT scans involving toxic radiation doses have been reported. Patients, wisely, are more likely to ask their doctor "do I really need another scan?" and physicians, concerned or maybe just thinking twice, are less likely to order them.

clairesmum said...

can you charge a fee for interpreting the scans that are brought to you, and for storing the images? that would seem like a reasonable cost of doing business, and it is to the patient's advantage for treating docs to have access to as much original information as possible....
of course, if it seems simple and reasonable, there are undoubtedly numerous reasons why it won't happen!

Anonymous said...

Although this development is having the predictable short term financial effect on the hospital and physicians under the present fee for service system, its effect will be more salutatory under global payments. In addition, there is little doubt that it is better for quality of care, particularly when the patient is bringing in a CD of a recent previous (and, presumably, necessary) scan rather than being re-scanned and re-radiated.

The simultaneously encouraging and scary part is how fast the tide turned toward decreased scanning, once a tipping point of both financial pressure and cumulative evidence of harm from radiation was reached. We need to learn to rapidly harness this tipping point for multiple other over-used procedures in the future.

nonlocal MD

fairhavenhorn said...

I think this reflects BI's tertiary status more than price shopping. The patients likely had the CTs as part of diagnosis, and brought them in hopes of avoiding another CT. I used to hear complaints from patients asking why they couldn't bring the results of studies done elsewhere. Now the complaints are when another study is done rather than re-use the old one. Old studies are not always appropriate for re-use.

Your prediction has already happened. It might not have affected BI, but nationwide employment and salaries for radiologist started dropping about 10 years ago as PACS became widespread.

It can be interesting to speculate why radiology put this kind of medical record sharing in place with no big government programs or special funding to motivate the change.

Engineer on Medicare said...

The next part of the question is, to what extent has the reduction of CTT scans and other imaging studies caused worse outcomes for the patients whoe didn't receive them? How many cases have been seen where someone says "that patient would have had a better outcome if we had done a CT scan."?

I suspect that the cases are rare and the consequential cost of care from omitting 100 scans is less than would have been billed if those 100 scans had been performed.

Daniel Z. Sands, MD, MPH said...

Although I am sorry for BIDMC's loss of revenue, I think competition in the healthcare marketplace is a very good thing, and hospitals will respond to the competition by delivering greater value per dollar. This will drive down health care expenditures.

Perhaps another contributor to this is that we are spending more time listening to and examining patients rather than jumping to order some sort of expensive imaging test. What proportion of these tests are truly necessary?

drphilxr said...

This is not the trend at my boston area clinic: our CT scan volume has increased palpably in the last several months/yr; driven mostly by our ER and outside hospital trauma transfers. We aren't hiring, nor firing, and if I was a patient I wouldn't want my radiologist having to read over 50 complex scans/ day; even if he/she were in India charging $5/scan. Radiation fears aside, my greatest fear is the continued overuse of "triage imaging" due to medicolegal fears /swollen ER's, and the cost cutting enacted by BC/BS. More 'barely insured' patients, less resources, less pay, more scans. Bad outcomes.

Barry Carol said...

First, I’m glad to hear about the recent physician incentives implemented by some insurers to encourage physicians to reduce imaging and that they are having the intended effect.

Second, I think imaging is an area that lends itself especially well to price transparency – disclosure of actual insurance contract reimbursement rates. Independent, non-hospital owned imaging centers usually charge far less than hospital owned facilities. A friend in the Midwest, for example, needs to get a brain MRI every four months. The imaging center at the AMC where her oncologist is located charges a list price of over $2,900 for this test and it was actually reimbursed $2,625 by her insurer. By contrast, the insurer only had to pay $660 for the same test at the independent imaging center near where she lives and about 100 miles from the AMC.

Most referring doctors aren’t aware of these huge cost differences among providers which is why we need robust price and quality transparency tools so they can more easily identify who the most cost-effective providers are. At the same time, tiered in network insurance products are necessary to give patients the incentive to care about costs even when insurance is paying most of the bill. What’s happening at BI is encouraging from a system standpoint and I hope to see it spread to more procedures and geographically.

Anonymous said...

To take it a bit further, to what extent will the glut of imaging resources in the Northeast deal a self-inflicted blow to Imaging Reimbursement?

How prophetic was the previous post from this summer:
http://runningahospital.blogspot.com/search?q=overexposed

"There are now more MRI units serving the 6.5 million residents of Massa­chusetts than there are for the 55 million residents of Australia and Canada combined"

DrWes said...

I would suggest your title is incorrect.

Radiology fee reductions were not the first bend in the Medicare cost curve. Cardiologists' whopping office-based 40% cut in non-hospital imaging payments beat the radiology fee reductions by a long shot.

That's why so many of have already become hospital system employees.

Keith said...

Scans can be obtained at outpatient facilities at much lower costs. Why insurers have not encouraged use of these lower cost providers is a perplexing issue to me. Often scans in hospital settings are twice that of outpatient. Granted, this higher cost makes sense for inpatients where there is a need to maintain staff 24/7 in most cases, but for outpatient studies this has never made sense. Hospitals often own scanner in outpatient setting that will charge the same rates as their hospital based scanners.

One likelihood is hospitals are leveraging their size and ability to negotiate the package deal for all their services and providers as opposed to small outpatient facilities. This may again prove to be one of the downsides of the push for integration, that it will encourage smaller less costly providers to join large organizations with more favorable contracted rates.

Thomas Pane, M.D. said...

Its pretty clear that CT is not a benign test. As long as we're not missing diagnoses, its good to reduce the scanning when possible.

Radiology may be the first specialty to be significantly 'disrupted' by digitalization and interpretation in low-cost environments.

That being said, it doesn't seem proper that BI radiologists aren't compensated for interpreting offsite studies. They are providing service and taking on liability when they read these studies, are they not?

Paul Levy said...

Dr. Kruskal, our Chief of Radiology, explains:

The docs bring us the outside CD's often with their official reports on the actual disc, so we are simply verifying or checking that the interpretations are correct (or not!), advising on next best strategies, or confirming findings. For us to bill for the study the doctor needs to place an official order for the study and get this approved by the insurance company. Since we don't give formal readings on non-ED cases, not many doctors want to go to all that trouble especially since they already have the answer to their question.

We don't bill since in the vast majority of cases we are not likely to be reimbursed, and many of us are reluctant to give reports on studies like ultrasounds (which we didn't do, nor do we know the techs), or CT scans where we have no idea of contrast dose or how the scan was acquired, and often there are no prior studies available.

Also many outside MRI's are done at the freestanding centers that provide what we consider inferior quality images. Also, more often than not, doctors will have the outside studies scanned into our PACS system (BIDMC pays for the storage which is not an insignificant amount) and then we are asked to review these studies at multimodality conferences. This involves our fellows pre-reading the study and showing the abnormal findings that the doctors need to see.

A frustrating issue, and many academic radiologists are trying to deal with this. Another local institutions likes to tell their docs to rescan the patients, but we have chosen the high road and like all else we do at BIDMC have placed our patients first.

Anonymous said...

The issue described by Dr. Kruskal is not confined to either radiology or academic centers. For years pathology slides have been sent back and forth between institutions when the patient selects a different institution for treatment than the one making the diagnosis. The clinicians at the treating institution naturally desire an interpretation by the pathologists they trust (hopefully!); and billing is again problematic. Slide quality is also often problematic.

I think whatever institution in Boston tells its docs to rescan patients should be called out; this is no longer acceptable behavior in the face of evidence of patient harm from radiation.

nonlocal MD

Thomas Pane, M.D. said...

Dr. Kruskal,

Thanks for the response. Your mention of having to place an official order unlocked a memory... About 10 yrs ago when I ran traumas as a senior resident in surgery, patients would sometimes be transferred from smaller hospitals with existing studies.

Our radiologists instructed us to enter a "consult with written report" order. The scans were reviewed and not duplicated unless they were very poor quality or the patient's condition had changed.

I don't what the reimbursement outcome was. My guess is that most insurers do not pay for two interpretations of the same study, but it could have been different then.