NCPA - National Center for Policy Analysis


February 12, 2008

Due to a rise in MRI and CT scanners, Medicare has cut the price it pays for imaging, forcing doctors to spend less on machines, says Forbes.

But what's bad for the radiologist and all the big companies selling him new equipment -- General Electric, Siemens and Philips -- is good for everyone who foots the bill:

  • Imaging accounts for only 5 percent of the $2 trillion in U.S. medical spending, but it has been the fastest-growing component of health care inflation in recent years, climbing 20 percent annually until last year.
  • Scans (excluding old-fashioned X rays) per thousand insured people went from 85 to 234 in the United States since 1999.
  • Consumers demanded scans whenever they ached, and doctors went along, sometimes out of fear of lawsuits; expensive fact: Pittsburgh has more MRI machines than Canada.

Now comes a scientific backlash to the imaging boom, says Forbes:

  • A recent study by two Columbia University researchers in the New England Journal of Medicine argued that the overuse of CT scanning is adding up to dangerous levels of radiation exposure, especially in kids.
  • Another risk is needless panic; a study from the National Institutes of Health found that 17 percent of patients getting tested for cancer had at least one false positive chest X ray over a four-year period.
  • Some 8 percent of women had at least one false positive ultrasound for ovarian cancer.

Private insurers also started pricking the imaging bubble.  Companies like CareCore Radiology, American Imaging Management and National Imaging Associates cropped up to do the dirty work of reviewing and rejecting imaging orders on behalf of insurance companies.  CareCore Chief Executive Donald Ryan estimates that 18 percent of all scan orders are rejected and that another 6 percent aren't even filed because of the deterrent effect.

Source: David Whelan, "Cranking Up the Volume," Forbes, February 25, 2008.

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