Price for a brain MRI actually cheaper at for-profit hospitals than their nonprofit counterparts

The price for a brain MRI is actually cheaper at a for-profit hospital than its nonprofit or government-operated counterpart, according to a new analysis published Tuesday in JAMA Network Open [1].

Rural hospitals also were discovered to be pricier than urban ones, findings that may contradict conventional wisdom and show the “strong revenue-maximizing efforts of these hospitals,” one of the study’s authors told Radiology Business.

“My takeaway: Commercial negotiated price reflects hospitals’ market power,” said Ge Bai, PhD, CPA, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. “To bring affordable brain MRI for commercial patients, competition from for-profit hospitals and other types of facilities, such as radiologist-owned imaging centers, are needed.”

For the research letter, Bai et al. obtained information on commercial negotiated prices for brain MRI, as of June 2022, using data from Turquoise Health. They also pinpointed characteristics of those who did (and those who did not) disclose prices for the exam, including ownership type, health system affiliation, location, teaching status, profit margin, payer mix, etc. Altogether, the search produced a total of 2,630 hospitals meeting the criteria.

Hospitals that publicly disclose prices for brain MRIs are typically larger, more profitable, nonprofit, system-affiliated, teaching hospitals, and located in more urban, affluent areas compared to nondisclosing institutions. They also have a higher charge markup, treat a lower number of Medicare beneficiaries, and are more likely to employ clinicians in the MRI department, the authors noted. On average, the commercial pricing for a brain exam was about $2,268 (interquartile range of $1,024 to $3,197), with hospitals contracting with an average of 16 commercial plans (range of 6-20). State, referral region and health system characteristics also appeared to impact price variation.

Nonprofit and government hospitals charged higher commercial prices than other institution types, the analysis found, and this bore true both nationwide and in the same states or regions.

“Across the nation and within the same state, referral region, or health system, hospitals located in rural areas, contracting with more health plans, or treating more Medicare patients had higher prices, potentially reflecting these hospitals’ stronger bargaining power compared with insurers in their local markets,” Bai and co-authors noted.