Steering patients to low-cost facilities lowered MRI costs by 18.7 percent

A radiology benefits management (RBM) company reduced the average cost of an MRI by 9 percent in markets where patients received phone calls directing them to lower-cost facilities, according to a study published in Health Affairs. When compared to prices in reference markets where no interventions were made, the differential was even greater: Over the same period, the average price of an MRI in those markets increased 14.3 percent.

AIM Specialty Health, owned by Wellpoint, implemented a price transparency initiative for advanced imaging procedures in 2010 in markets in the Northeast, Midwest and Southeast where it had pre-authorization programs in place.

When there was a difference among providers in the price of an imaging study of $400 or more, beneficiaries received a call from the RBM letting them know that a lower-priced, practical and quality alternative was available. Quality assessments were based on staff qualifications, accreditation, quality programs, equipment and overall service levels.

The authors used claims data from commercial Blue Cross and Blue Shield health plans in their study; all patients were 18 years or older and scheduled for at least one outpatient MRI between 2010 and 2012. The primary outcome measure was the change in the average cost of an MRI between 2010 and 2012. Total cost of the imaging exam, including the co-pay, was measured. The intervention group was measured against a reference cohort.

When the authors compared the regression-adjusted change from 2010 to 2012 in the intervention and reference groups, the intervention resulted in an 18.7 percent reduction in the price of an MRI examination.

One factor cited by the authors was a shift from hospital-based imaging to outpatient imaging; In 2010, 53 percent of all MRI scans were acquired in hospital-based facilities, compared to 45 percent in 2012. The rate was unchanged in the reference group during the same period.

The intervention also had the effect of reducing prices in the market, the authors found. The unit price for MRI in the intervention market declined from $1,488 to $1,313 in hospital-based outpatient facilities over the two-year time span, while the price increased in nonhospital facilities.

Patients often have difficulty obtaining prices for health services and procedures because they involve negotiations between provider and payor, the authors note in justifying direct patient intervention. Many patients are not inclined to price shop because they bore a small percentage of the cost historically; those who do may misinterpret a higher price for better quality.

Even where price transparency initiatives have been implemented, policy makers have seen little impact on place of service.  The authors cite a 2007 initiative in New Hampshire to make the prices of preventive services, emergency department visits, and radiological, surgical and maternity procedures available to patients. Several years later, the New Hampshire Insurance Department found that the program had no impact on reducing provider prices.

A more recent study on benefits design for Anthem Blue Cross in California and the California Public Employees’ Retirement System (CalPERS) found that pairing reference-based pricing with member outreach on the cost differential resulted in members choosing lower-priced providers.

“The price transparency program resulted in a significant price reduction of 18.7 percent per MRI test,” the authors conclude. “This suggests that a price transparency initiative involving direct member outreach with integrated quality information can successfully reduce health care costs.”