MRIs are small piece of health care cost containment challenge

February 22, 2011

Both the column by Jay Hancock ("Orthopedist-owned MRIs are recipe for soaring medical costs," Feb. 8) on orthopedist-owned MRI machines and CT scanners and the response by Dr. James York raised issues that need to be considered. However, both failed to address an important point: The overall impact of the proliferation of the devices on the cost of health care in this country.

Other than in hospitals, MRI machines and CT scanners sit idle for many hours of the day. In the aggregate, the supply of MRI machines and CT scanners in the Baltimore metropolitan area greatly exceeds the reasonable demand for their use.

Excess capacity is anathema to the success of most enterprises. GM and Ford reduce plant capacity when demand for cars drops. The costs of maintaining capacity that sits idle increase the costs of manufacturing, and therefore the price, of each car. This is no less true for the costs of each MRI or CT scan.

The average MRI costs about $2 million to buy and install, and about $800,000 per year to run. Those costs must be recouped by the health care providers within a finite period of time before the equipment wears out or becomes obsolete.

It often is said that the first mistake made when describing our health care system is using the term "system." It is not a unitary enterprise like GM or Ford. Normal principles of capacity utilization seldom apply. Excess capacity punishes GM or Ford, forcing them to eliminate it. On the other hand, third-party payers (insurers or the government) reimburse health care providers the same amount for an MRI or CT scan regardless of utilization, meaning that the "system" actually promotes the type of excess capacity that would destroy GM or Ford.

Dr. York undoubtedly is correct that the availability of MRI machines and CT machines in physicians' offices provides a benefit to their patients. The question is at what overall cost to our system of health care in this country? It is just one of the many hard questions that have to be answered if costs are to be contained, and programs like Medicare and Medicaid rescued from insolvency.

Health care in the United States is very good at delivering high-quality care to a limited number of our citizens. It also is extraordinarily expensive and inefficient and notoriously poor in terms of the standards by which the quality of a country's health care system customarily is measured, including life expectancy at birth and infant mortality rate. When the quality was last measured by the WHO, the United States ranked 37th in the overall quality of its health care, right below Costa Rica and right above Slovenia.

Health care expenditures in the U.S. are now at 16 percent of GDP and climbing. The rate of increase is unsustainable, and few politicians are paying attention. The one thing to keep in mind about President Obama's approach to health care reform is this: The structural problems that are driving costs upward are inherent in the current system, and the measure approved last year will neither fix those problems nor make them appreciably worse.

Democrats refuse to tackle the problems, unwilling to admit that health care costs will continue to increase dramatically under reform. Republicans do not want to tackle the problems because their strategy is to blame Mr. Obama for the increase in costs, even though that is tantamount to blaming the rooster for the sunrise.

At least Mr. Hancock is raising the questions. The answers are not easy, the choices will be difficult, and the discussion is a lot less entertaining than the melodramatic debate going on in Congress.

David A. Plymyer, Millersville

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