Three months later, Fraga returned to the same imaging center for a second, identical CT scan. This time, however, her insurance company, Anthem Blue Cross and Blue Shield in Ohio, was billed more than $1,200.
As is common practice, Anthem paid Kettering Health Network only a negotiated amount of the bill submitted for Fraga’s CT scan. For the first scan, the actual amount paid — including Fraga’s co-pay, was $248.11; for the second, $321 – a 30 percent increase.
“Why the discrepancy?” said Fraga’s husband, Dan. “On the surface, it doesn’t look right.”
Medical imaging costs vary widely across the nation and even in the same city. The Dayton Daily News found wide disparities in the local costs of medical imaging services in reviewing an Anthem Blue Cross and Blue Shield database.
The database, which lists the amounts Anthem actually pays for imaging services, also shows that hospital-owned imaging centers charge more than independent imaging centers. Kettering Health Network took over Dayton Medical Imaging’s locations in Centerville and Vandalia prior to Helen Fraga’s second CT scan.
A recent analysis by the organization change:healthcare, which advocates for health care transparency, also found huge regional variances in the cost of imaging services.
Ultimately, critics say, employers — and, increasingly, consumers — are hit by those costs through deductibles or, indirectly, through higher premiums.
Big advances — and big business
Medical imaging is big business in the United States, with CT scans alone accounting for an estimated 70 million procedures annually. Medicare paid $2.3 billion just for CT scans in federal fiscal 2009. Other kinds of available imaging technology include MRIs, nuclear medicine, ultrasound and X-rays.
Anthem, Ohio’s largest private-pay health insurer with about 3.3 million members, said it and its members in 2010 paid $88 million for 120,000 CT scans in Ohio — an average of $733 per scan.
Medical imaging has revolutionized medicine, said Roland Rhynus, president of AHRA, a medical imaging management association. “It’s what makes medicine tick,” he said. Especially in emergencies, he said, advanced imaging such as CT scans can save precious moments. “Anything we do that’s critical, imaging is right there.”
It’s no wonder hospitals charge more than independent imaging centers in some cases, Rhynus said. “There are huge differences in the technology and the capabilities and the skills,” he said.
But medical imaging also can be a huge revenue generator, said Cathy Levine, executive director of the patient advocacy group Universal Health Care Action Network of Ohio.
“Our current health care system operates on perverse incentives that reward volume of care over value of care,” Levine said.
As more employers shift to high-deductible plans to manage costs, health care consumers will have to shoulder more of the cost of their care, said Bryan Bucklew, president and chief executive of the Greater Dayton Area Hospital Association.
“There’s going to be an increased personal responsibility to take ownership on where they get their health care,” Bucklew said.
Medical imaging costs vary considerably not only from city to city, but within communities, said Robert Zirkelbach, press secretary for America’s Health Insurance Plans, the national trade association of the health insurance industry. Consider Springfield. The negotiated cost that Anthem pays for abdomen CT scans ranges from as little as $207 to $344 at Crystal Clear Imaging in Springfield, to as much as $1,308 to $1,445 at Springfield Regional Medical Center.
Free-standing medical imaging centers generally offer diagnostic imaging at lower prices than hospitals do, and sometimes the differences in cost can be “fairly dramatic,” said Dr. Barry Malinowski, medical director of Anthem Blue Cross and Blue Shield in Ohio, of which the Fragas are members.
“The overhead is less in a free-standing facility than in a hospital setting,” Malinowski said.
Bucklew acknowledged the disparity in medical imaging costs between hospitals and independent imaging facilities.
The difference, he said, is largely attributable to the region’s nonprofit hospitals shifting costs to make up for the burden of uncompensated care. Premier Health Partners, whose hospitals include Miami Valley and Good Samaritan, provides the bulk of the region’s uncompensated care.
The charges assessed to those with private-sector insurance also are meant to offset losses in caring for Medicaid patients. Medicaid, the state and federally funded health care program for the poor, reimburses hospitals $214 for chest CT scans, far less than private insurers do.
Levine, whose organization advocated for universal health care, said she expects less of an incentive for overcharging the private insurance sector when virtually all people are insured under the pending federal health care overhaul. But she does not believe hospitals will reduce their charge voluntarily,
Kettering Health Network’s purchase of Dayton Medical Imaging is part of a broader trend, Anthem’s Malinowski said.
“We’ve seen an increase in hospitals purchasing free-standing imaging centers and free-standing surgery centers,” he said.
Kettering Health Network said its imaging charges are consistent with both regional and national hospitals.
“Hospital charges, on the whole, differ from independent diagnostic facilities,” the statement reads. “We don’t have any comment on the previous owner’s billing practices.”
Premier Health Partners assumed full ownership of Vanguard Imaging Partners in early 2010 after it and radiologists dissolved a joint venture. Vanguard adopted Premier’s pricing structure, resulting in slightly higher prices, a Premier spokeswoman said.
Patients such as Fraga who undergo such testing often are shielded from the full cost of medical imaging services, paying a set co-pay. But those with high-deductible plans or on health savings accounts are more keenly aware of the costs. And even those patients who only pay a small fraction of the cost directly often will be affected indirectly in the future through higher premiums.
“Premium increases are driven by cost and utilization,” Anthem spokeswoman Kim Ashley said. “If consumers continue on the path of utilizing higher-cost facilities, premiums will continue to rise at higher levels.”
A Dayton Daily News review of the Anthem Cost Comparison website — accessible only by Anthem members — showed Anthem typically pays Kettering Health Network hospitals between $345 and $481 for abdomen CT scans. That’s less than what’s typically paid to Premier Health Partners hospitals for that procedure.
Anthem did not provide data for chest CT scans on its website, which is updated every six months.
Cost comparisons more common
Given the variability in costs, Anthem will start a new “Imaging Shopper” phone service this fall in the Dayton and Cincinnati areas.
When a doctor schedules an MRI, CT scan or other diagnostic imaging for a patient at a higher-cost facility, the patient will receive a phone call notifying them of other potential places where they can have the diagnostic imaging done.
Anthem said a pilot “Imaging Shopper” project, launched in December in Indianapolis, resulted in 11 percent of those contacted changing to a lower-cost facility. The health insurer said it is on track to save $1.8 million in medical expenses through the pilot project.
Anthem members already can compare the costs of imaging services through an online tool called Anthem Cost Comparison.
Contact this reporter at (937) 225-7457 or bsutherly@DaytonDailyNews.com.
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