Medical scans zapping insurers

As usage of technology increases, so does the cost

May 13, 2007|By M. William Salganik | M. William Salganik,Sun reporter

Danilo Espinola is a busy doctor who seldom sees a patient. Instead, he spends most of his time in a half-darkened room at Advanced Radiology's imaging center in Pikesville, peering at amazingly detailed scans on a computer screen as he searches for malignancies or other abnormalities.

Less than a decade ago, the technology - positron emission tomography - was primarily a research tool shunned by insurers. But once Medicare and private insurers decided to cover the diagnostic test, usage shot up.

In the past five years, the number of PET scans increased 400 percent, according to consulting firm IMV Limited.

Now more than a million PET scans are done a year, at about $2,500 apiece. Espinola reads 20 to 25 scans in a typical day, a rate that would yield more than $1 million a year in billings.

Both patients and doctors are grateful for the new technologies that allow images that were unimaginable even a few years ago. And as the capabilities expand rapidly, it holds even more promise.

But that progress comes at a price.

Though the humble and inexpensive X-ray still has its uses, more and more patients are undergoing high-end scans that can cost thousands of dollars to assess everything from bone density to brain atrophy to rotator cuff injuries.

Growing expense

The upshot: Imaging has nudged out drugs as the fastest growing component of rising medical costs, increasing as much as 20 percent a year.

The overall cost of diagnostic imaging is estimated at well over $100 billion annually in the United States. That's about a nickel of each health spending dollar.

That's gotten the attention of insurers, who have put up more hurdles and imposed more controls, creating hassles for doctors and patients alike. Sometimes they refuse to pay at all.

Dorothy Jewell, 72, of Mount Washington, a retired nurse, has had cancer surgery on her lung and on her hip.

After a blood test last fall showed a possible cancer marker, her oncologist ordered a combined PET and computed tomography (CT or CAT) scan.

When she called Medical Imaging of Baltimore to make the appointment, she was told Medicare wouldn't pay for the test because she had had one less than six months before.

"It was just a shock to me," she said. "I feel they shouldn't limit doctors in any way to do what they think is right for the patient."

Unlike some other patients, Jewell's anxiety was limited to several hours. The imaging center got her on Medicare's registry of cancer patients, guaranteeing payment, and she got the scan without delay.

But private insurers have instituted tighter controls, especially as they have see their imaging bills escalate.

Diagnostic imaging is "one of the most visible and costly technological advances over the last 25 years," according to a report by the national Blue Cross and Blue Shield Association.

(The term "imaging" is often used rather than "radiology," since some of the techniques don't use radiation.)

Medicare's payments to doctors for imaging had "by far the highest growth rate" of medical bill categories studied, doubling between 2000 and 2005, according to Medicare's Office of the Actuary.

When CareFirst BlueCross BlueShield did a detailed analysis of its claims to look for cost drivers - examining 1,300 trends by ZIP code, market segment and type of service, "diagnostic radiology came to the top," said Michael Fierro, associate vice president for health care informatics for CareFirst.

CareFirst pays about $300 million a year for diagnostic imaging, nearly 7 percent of its $4.5 billion in medical claims.

The bill has risen as use of sophisticated - and expensive - technologies have proliferated. Magnetic resonance imaging (MRI) typically costs $700 to $900; computed tomography $500 to $700, and PET and other forms of nuclear medicine, in which a patient is given a radioactive material, $2,000 and up.

80% of cost increase

These high-end imaging procedures now account for 60 percent of radiology costs and 80 percent of cost increases, estimates Dr. Thomas Dehn, executive vice president and chief medical officer of National Imaging Associates, one of the country's largest radiology benefits management firms.

Propelling the surge in usage is the quantum leap in the capabilities of MRI, CT and PET over the quarter-century they have existed, said Dr. Donald Rucker, vice president and chief medical officer for Siemens Medical Solutions USA, a major manufacturer of imaging equipment.

"People look at them historically as cameras into the body," said Rucker, who is also on the faculty of the University of Pennsylvania medical school. "It's actually a very sophisticated computer system."

Vast increases in the speed and power of computers have enabled radiologists to assemble more tiny slivers of an image, taken from different angles, into clear, three-dimensional pictures - a far cry from the old flat X-ray images that look like Halloween skeletons. Doctors can even, with a flick of a computer mouse, in effect turn an organ around to look at all sides.

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