Price transparency leads to lower MRI costs, more competition

The initiation of a price transparency program for MRIs resulted in greater price competition and an increased use of less costly providers, according to a study in the journal Health Affairs.

Over the last several years, it has become increasingly clear that there is a wide discrepancy in the cost of advanced imaging exams, particularly MRIs. For example, a recent report from Castlight Health showed that prices for MRIs ranged from a high of $4,527 to a low of $416, with an average price of $1,062 for a lower back MRI in New York.

Price transparency for these imaging services has been difficult to achieve for a number of reasons, according to the authors of the Health Affairs study. For example, healthcare providers are accustomed to negotiating prices and tend to keep those prices confidential or publish just partial costs.

For the study, the researchers looked at a price transparency initiative launched by a specialty benefit management company focused on advanced imaging procedures. Patients having at least one outpatient MRI scan in 2010 or 2012 were divided into groups according to whether they were members in commercial health plans participating in the program, or if they belonged to nonparticipating commercial health plans.

Patients in the former group were informed of price differences among available MRI facilities and were given the option of selecting different providers. That transparency corresponded with a reduction of $220 in costs.

Members of the participating programs shifted from hospital-based outpatient facilities to freestanding or office facilities, according to the researchers, which proved to be a main driver of that cost reduction. For those patients, the proportion of MRI imaging that took place in a hospital setting decreased from 53 percent in 2010 to 45 percent in 2012.

Medical imaging procedures were prominent in a list of high-cost, high-frequency and highly variable medical services that present the greatest opportunities to achieve healthcare savings, according to an analysis published earlier this year by Change Healthcare. CT scans have the greatest variability in price at 794 percent, with costs ranging from $300 to more than $2,600, according to the analysis. Ultrasound ranks next at 472 percent ($100 to $572), followed by MRI at 458 percent ($485 to $2,708), mammograms at 242 percent ($118 to $402), and colonoscopies and upper GI endoscopies ($1,290 to $4,035).

The authors of the Health Affairs study also found that the effect of the price transparency program extended beyond the group of participating health program members and triggered provider competition and cost reductions for the non-participating plan members in the same region.

To learn more:
- here's the Health Affairs abstract