Reducing medical imaging costs requires a short term investment

The following is a guest post from the American College of Radiology.

Health care reform cannot be approached with a “one size fits all” cost-cutting mentality. Reducing costs in the long term often requires an investment in the short term — particularly, in regard to medical imaging.

Medical imaging saves lives. Imaging also saves dollars through earlier disease diagnosis, less invasive medical procedures, shorter hospital stays, and optimized patient treatment. Researchers at Harvard Medical School demonstrated that every $1 spent on inpatient imaging translates to approximately $3 in total savings. But with an urgency to cut costs now, the long-term picture has fallen out of focus.

The Administration recently recommended a radical change to the Medicare reimbursement formula for imaging services. Specifically, it called for increasing the formula’s utilization assumption to 95 percent —even more extreme than Medicare Payment Advisory Commission’s suggested increase to 90 percent.

The utilization assumption is the percentage of a facility’s operating time that the equipment is assumed to be in use and is a key component of the Medicare formula used to calculate reimbursement. If the assumption is dramatically higher than the actual time a facility’s machines are in use, the center will be significantly underpaid for their services.

According to data recently collected by the Radiology Business Management Association, imaging centers in rural areas operate equipment approximately 48 percent of the time their offices are open. Imaging centers in non-rural areas operate equipment approximately 56 percent of office hours.

A 90-95 percent utilization rate for CT and MRI scans would result in an additional 30+ percent reimbursement cut for these modalities, on top of an average 23 percent hit resulting from imaging provisions in the Deficit Reduction Act of 2005 and even more reductions called for in the CMS’ proposed Physician Fee Schedule Rule. With cuts this deep, there will be minimal if any access to advanced imaging in rural America. Even suburban and urban providers may find it hard to continue to offer the same level of service — all leading to longer travel for care and longer wait times.

MedPAC has stated and the Centers for Medicare and Medicaid services agreed that the survey used to justify the Administration’s proposal, based on data from six large urban areas, was not sufficient to drive national reimbursement policy. The recent RBMA data shows why.

Everyone wants to improve health care, but clearly the evidence does not support legislation that would so drastically impact patient access to care.

James H. Thrall is chair of the American College of Radiology (ACR) Board of Chancellors.

Comments

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http://thehappyhospitalist.blogspot.com/ Happy Hospitalist
“The utilization assumption is the percentage of a facility’s operating time that the equipment is assumed to be in use and is a key component of the Medicare formula used to calculate reimbursement. If the assumption is dramatically higher than the actual time a facility’s machines are in use, the center will be significantly underpaid for their services.”
You have just described the last two decades of primary care’s decimation under your RVU economics. It’s too late to cry wolf. Nobody cried wolf for primary care as it was being destroyed. And now look where we are.
R Watkins
“If the assumption is dramatically higher than the actual time a facility’s machines are in use, the center will be significantly underpaid for their services.”
Welcome to what primary care has experienced for the past twenty years. Many primary care docs fail to meet overhead on every Medicare patient they see.
If you’re claiming that radiologists are now or will be underpaid, I’m not buying it.
ray
we are so overdoing the radiological testing that we need to cut back on it atleast 5% to begin with. My friend’s daughter who had some lower abdominal discomfort had two
CTs when taken within days apart. Turned out the girl was starting her period. Doctors who own CT scanners etc can not be objective adout their use, they are human and we should all come to terms.
anonymous
Imaging saves lives. However, there is likely some overutilization. A 5% cut seems reasonable enough drop to cut down on unnecessary studies without decreasing the really necessary one.
However, if you want to keep doing the same number of studies with the decreased reimbursement, radiologists should simply cut their salaries. Radiologists make double or triple the amount of money that a family practice doc makes.
http://www.BookstoreMD.com BookstoreMD
Everything we do to keep our medicine cutting edge is expensive. USA buys brand new latest imaging machines. Third world countries cannot afford them, so they buy used one from us. May be that is one reason how they keep their costs low. Once medicare reduces the rate of reimbursement of an imaging procedure, the price of the machine will come down proportionately. But of course that does not help those centers which have already invested money into such machines and their cost of operating is high. But such price changes does expose the mentality of medical industry – that is – the price of an equipment is not based on the cost of manufacturing it. It is based on how much revenue it will generate. So if the government can negotiate with the medical equipment industry to lower their prices, just as they did with meds, then they can probably have a valid reason to adjust reimbursements too, for those acquiring new machines. But if not, they are forcing all these centers towards the verge of bankruptcy.
http://www.MDWhistleblower.blogspot.com Michael Kirsch, M.D.
There is a reason that radiology has attracted health care reformers’ attention. There has been an explosion in radiologic overuse. I challenge the author that their specialty has saved $$$. In contrast, I believe that there specialty has been a sink hole that traps health care dollars. Radiologist are not the villains here. Every radiology exam that is done is ordered by a primary care physician or a specialist, like me. Radiologists, however, fuel the cycle by their overzealous interpretations which document a host of trivial findings that then demand – more radiology tests! At the hospitals I work at, I think that CAT scan of the abd and pelvis are included in the standard ER orders, since it seems every pt receives this exam. When a specialty doesn’t police itself, others will step in and do it for them. This is rarely to the specialty’s advantage.
anon
When proceduralists made a deal with the devil, undermining congnitive services through the RUC to line their own pockets, they surely must have known one day it will come back to bite them in a big way, I LOVE the karmatic justice of our times
To all those whose revenues are about to be cut…”Welcome to the party, pal”
To all those primes, hold on a bit longer, a very spoiled generation is aging in to Medicare, they want their care and they want it now and, having bankrupt their children, they don’t care if they also have to bankrupt their grandchildren to get it. Spiritually bankrupt, emotionally immature, catered too at every turn finding meaning in self-indulgence, they haven’t even begun to deal with their mortality.
Because of the RUC shortsidedness and simple greed, the iceberg is so close, only a sudden polar change in the reimbursement relationship between proceedures and cognition will address the baby boomer’s desires, Take good care of your patients, invest your savings in gold, retire off shore and you will do just fine.

ACR: Reducing medical imaging costs requires a short term investment

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