You'll Soon be Able to Shop Around for Your Imaging Testing Services

High-deductible health plans can put consumers on the hook for several thousand dollars before their coverage kicks in, but informed consumers can put a lid on their out-of-pocket medical expenses.

We can compare prices on pretty much everything we buy nowadays, and experts predict we will soon be doing the same with our health-care needs.

In fact, Peter Mazonson, a practicing physician and cofounder of ClearCost Health, says there are already tools that enable you to take out your smart phone when your doctor indicates you need a battery of tests, and pull up a comparative list of price and quality measures at eight imaging centers within a 10-mile radius.

“’Whom do you recommend?’” you’ll ask. “Your physician will say, ‘I don’t like him or she’s a great doctor,’” Mazonson explains.

The practice may not yet be commonplace, but it’s getting there, experts say. And the first step in motivating people to become comparison shoppers is identifying the challenges patients face when navigating the big black hole in the pricing and quality of medical services.

There’s a large variability in health costs for many of our most frequently-used medical services even in the same network or ZIP code, according to a recent quarterly Healthcare Transparency Index from Change Healthcare.

The report identifies several frequently prescribed services in the $100 billion a year medical imaging market and shows varying price tags of the same service.

Among them are CT scans, which have nearly tripled in use over the last 20 years, according to Dr. Rebecca Smith-Bindman, a professor of radiology and biomedical imaging at the University of California San Francisco. MRIs, she says, have increased fourfold.

CT scan prices vary as much as 794% and range from $300 to about $2,700. The price of having an MRI varies by 450% and fluctuates from about $500 to $2,700. Two other popular tests, colonoscopies and upper GI endoscopies, vary by 450% with pricing that spans from approximately $1,300 to more than $4,000.

A more expensive test does not indicate better quality, says Clayton Nicholas, Change’s strategy and marketing vice president.

Rather, when compared to independent imaging centers or smaller hospitals, the negotiating clout of large hospital systems gives them an edge in making lucrative deals with insurers and health plans, experts say.

Due to high hospital overhead and other factors, Medicare, which creates a baseline for reimbursement rates, compensates hospitals more than it does independent imaging centers for the same services, claims Naseer Hashim, CEO of Imaging Advantage.

Yet, Nicholas says lower-cost imaging centers contribute to only 19% of nationwide imaging business.

“No other part of our economy has a six-fold price variation for the same product or service,” says Mazonson.

With pricing arbitrary and under wraps, comparison shopping has been difficult for consumers. There’s an existing perception that consumers don’t have choices when it comes to health care, says Hashim, “and people are intimidated to ask questions. I am certain when a doctor instructs a patient to get a CT scan, that patient never asks about alternative facility services or questions costs or the qualifications of the radiologist reading the film—or how long it takes to get results.”

New models can drive change

Thankfully, experts predict new companies and business models will drive change in the marketplace and make pricing more transparent and steady.

Already, companies like Change Healthcare and ClearCost are making headway in reducing out-of-pocket expenses for employees as well as their employers. For example, Change claims a consumer who uses its services to comparison shop for a pelvis or abdomen CT scan saved nearly $1,600. It’s not uncommon to find fair price imaging providers who offer the same quality at rates that are half or even a third as much as high cost providers, says Mazonson. And, Imaging Advantage, for example, uses cloud-based technology and a network of more than 300 radiologists to link operations of ER radiology departments across 17 states to show price points and service levels to consumers.

Hashim says technology interoperability creates competition in a currently noncompetitive environment. “Physicians in Wichita can now compete with doctors in New York,” he says. “You’ve introduced competition and as a result pushed up quality and service levels and lowered cost.”

What’s more, because accountable care organizations and patient-centered medical homes share the financial risks and benefits in managing and coordinating care for a community of patients, Reid B. Blackwelder, a family physician in Kingsport, Tenn., and president of the American Academy of Family Physicians, says there is less focus on churning revenue, say by ramping up patient tests and services, and more focus on the value—or harm—of a particular test for a particular patient in a particular point in time and circumstance.

Blackwelder also says when doctors know imaging prices in advance they can provide more value-based referrals. In fact, researchers at the Johns Hopkins University School of Medicine saw a 9% decrease in test orders over six months for 30 lab tests when physicians saw fees based on the allowable Medicare fee as compared to a control group of 31 tests without pricing information which rose 5.1%.

The transparency represented a “modest” $436,115 decrease in hospital charges, researchers say, but showed “evidence” that presenting providers with associated fees as they order tests is a simple way to alter behavior.

Technical advances have made the tests better and therefore useful across a range of clinical indications, says Bindman. Still, diagnostic imaging does not change clinical decision making in every situation.

Here are expert tips for savvy imaging shopping:

Ask Why. The Choosing Wisely campaign and its supporters can offer guidance when addressing health issues. The AAFP has identified 15 tests and procedures that both doctors and patients should carefully consider and openly discuss before incorporating them into a treatment plan. If you are not faced with an emergent situation (e.g., manageable back pain), time, patience, anti-inflammatory medications, stretching and other simple measures will often help, says Mazonson.

Speak up. If an advanced imaging test is ordered, ask your physician what he or she hopes to learn from the test, and how it will change management.

Know what you’re getting. If you do need imaging, work with your doctor to understand what code and subsequently test is ordered, says Blackwelder. Then call your insurer to try and discover if costs will vary from facility-to-facility.

Share your perspective. Make sure your physician hears and understands your perspective on all health decisions. Consumer-driven health puts patients at the center of care, says Blackwelder. Walk the talk.