Rural hospitals with health system affiliations charge more for imaging than independents
Rural hospitals with health system affiliations charge more for medical imaging than their independent counterparts, according to new research published Tuesday.
Nearly one-third of these vital institutions are at risk of closing due to financial challenges. However, affiliating with a larger hospital group can serve as a lifeline, leading to higher negotiated prices while propping up an institution’s financial performance.
Researchers with the University of Michigan recently examined this trend, analyzing data from 1,063 rural hospitals. All 12 imaging exams investigated had higher adjusted negotiated prices at system-affiliated rural hospitals, experts detailed in JAMA Network Open.
“These data suggest two possible strategies to support financially struggling independent rural hospitals,” Michigan surgeon Cody Lendon Mullens, MD, MPH, and co-authors wrote May 21. “First, rural hospitals could consider pursuing a health system affiliation that may give them better negotiating power and may lead to higher reimbursement, although there can be adverse consequences for system affiliation. Second, policymakers could intervene to ensure fair, equitable reimbursement for rural hospitals, especially in the context of increasing healthcare spending.”
Mullens and colleagues gathered their data from price transparency vendor Turquoise Health in December. Their final sample included 600 independent rural hospitals and nearly 500 more affiliated with hospital systems, with almost 427,000 negotiated prices identified. Independent rural hospitals were more likely to be for-profit (58% vs. 23%) and critical access (81% vs. 74%).
Out of the 14 procedures included, 13 had higher adjusted negotiated prices at system-affiliated rural hospitals compared to independents. Same for radiology, with all 12 imaging exams having higher prices at institutions affiliated with hospital systems. Lower extremity MRI saw the biggest gap at 18.5% ($1,933 at an independent vs. $2,291 at a system-affiliated rural hospital), followed by unilateral diagnostic mammography (16.5% or $300 vs. $349), bilateral mammography (15.6% or $379 vs. $438), screening mammogram (14.9% or $289 vs. $332), and brain MRI with contrast (14.6% or $2,790 vs. $3,198).
“There may be appropriate sources of variation in negotiated prices,” the authors cautioned. “However, we adjusted for potential factors that may explain such variation. The rates provided may be vulnerable to reporting bias. However, compliance with these reports is federally mandated, and these data are increasingly being used to evaluate hospital prices.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.