Nonprofit, public and rural hospitals are charging payers more for MRIs, study finds

Commercial prices for a brain MRI run higher at nonprofit and government hospitals than their for-profit counterparts both at the national level and within a shared region, according to a new analysis of hospitals’ published price data.

Among a sample of 2,630 hospitals that disclosed their prices and met other inclusion criteria, researchers found the average commercial negotiated price of $2,268 and a median price of $1,900 for a brain MRI. Median Medicare price for the same procedure was $398.

Among nonprofits, which made up the majority of the sample, listed commercial prices ran $278 higher than for-profits nationally and $387 more within the same referral region, they found. Public hospitals charged $300 more than for-profits nationally and $537 more within the same referral region.

“Conventional wisdom is that government and nonprofit hospitals are less profit-oriented and should have lower prices,” Ge Bai, professor of accounting and health policy at Johns Hopkins University and the study’s senior author, told Fierce Healthcare. “We found the opposite evidence.”

Researchers also found that hospitals located in rural areas, those that contracted with more health plans and those that treat more Medicare patients charged higher prices, “potentially reflecting these hospitals’ stronger bargaining power compared with insurers in their local markets,” they wrote in JAMA Network Open. Each of those findings persisted nationally or within the same state, referral region or health system, they wrote.

“The high price of MRI in rural areas raises the question of whether it is efficient to provide such expensive services in rural hospitals, which usually have very low utilization rates,” Bai said. “Rural residents might be financially better off to receive MRI services in larger but farther hospitals.

Even when comparing hospitals with different characteristics that were located within the same health system, the hospitals with characteristics that increased their bargaining position with insurers had higher brain MRI prices than those with less power.

“Power talks on the negotiating table,” Bai said. “Stand-alone imaging centers owned by physicians can bring competition to the market and value to patients and payers.”

Bai and colleagues from Michigan State University and Yale University School of Medicine conducted their analysis by reviewing commercial pricing data required by the government for Medicare-participating hospitals, which was collected by price transparency data platform Turquoise Health as of June 13, 2022.

Their analysis excluded hospitals that did not adhere to the price disclosure policy, as well as those that did not have data available regarding characteristics such as ownership type, number of beds, system affiliation, rural location or payer mix.

The researchers said these sampling exclusions may impact their findings. Additionally, they noted that hospitals that did not disclose their prices but otherwise met all other characteristic data inclusion criteria tended to be “larger and more profitable and more likely to be nonprofit, system-affiliated, teaching hospitals, and located in urban areas and more affluent counties than non-disclosing hospitals.”