Download Diagnostic Radiology Costs

The
Self-Insurer
Volume 26 • May 2009
The World’s Leading Alternative Risk Transfer Journal
Diagnostic
Radiology Costs:
The New Frontier for Managed Costs
"This reprint by permission of The Self-Insurer and The Self-Insurer’s Publishing Corp. as it appeared in the May, 2009 Edition"
Diagnostic
Radiology Costs:
The New
Frontier
for
Managed
Solutions
By Don Duford, President & COO, One Call Medical
edical inflation has always been a key concern for self-insured workers’ compensation and group health programs, but with today’s tough
economic climate, the need to control medical spending is even more
urgent. When costs for prescription drugs and hospital services escalated, selfinsured programs immediately employed management strategies to control
spending in these areas. Today, there is a new category of escalating costs—diagnostic radiology—that requires new and innovative managed solutions.
M
With its 20 percent growth rate,1 diagnostic radiology is now the fastest rising
area of medical expense,2 increasing at twice the rate of prescription drugs and
faster than overall healthcare spending, which is rising at only 10 percent each
year.3 According to a report by the Association of Health Insurance Plans, almost
$100 billion a year is spent on imaging in the U.S. and these costs are expected
to double in just four years.4
Advanced imaging technology—which includes magnetic resonance imaging
(MRI) and computed tomography (CT) scans—has improved the medical com-
munity’s ability to detect, diagnose, and
treat medical conditions and injuries.
With these tools, physicians can peer
into the human body with increased
power and capability. Yet left unmanaged, diagnostic radiology costs will
continue to skyrocket, negatively
impacting the bottom line for many
self-insured programs.
With spending in this area increasing so
dramatically, diagnostic radiology is now
the new frontier that self-insured programs need to monitor and manage.
Today, diagnostic management solutions—specifically specialty networks—
can save programs money without the
hassle of having to dramatically revamp
benefit plans or transfer costs to plan
members. These specialty networks
offer substantial cost savings, and at the
same time, patients receive prompt
scheduling with qualified, credentialed
radiologists, all of which ensures quality
testing and improved care.
Types of Diagnostic
Radiology Providers
& The Impact on
Cost & Quality
The growth in diagnostic imaging has
predominantly produced positive outcomes. Diagnostic radiology provides
comprehensive information on which to
base an accurate diagnosis and effective
treatment plan. Advances in imaging
technology and new applications of
existing services have enabled an
enhanced ability to manage complex
medical conditions and injuries. In addition, diagnostic radiology enables an
early prognosis, allowing physicians to
leverage preventive medicine that often
utilizes less invasive and less expensive
modalities. As a result, although radiology spending is increasing, these tests
can lead to an overall reduction in
healthcare costs, if imaging services are
performed appropriately.
However, today’s studies show that 20 to
50 percent of procedures should never
have been performed.5 The key challenge
behind this disconcerting trend is the fact
that there are generally three types of
diagnostic radiology providers. Each dif-
fers in regards to their ability to impact
cost and quality outcomes. Self-insured
program administrators must be aware of
these various providers and levels of savings and quality care they can offer:
Hospital Imaging. Many self-insured
programs may perform upwards of
80 percent of imaging exams at hospital outpatient imaging centers,
which are high in quality, but also
very expensive. These services generally cost 30 to 50 percent more
than the rates charged by freestanding imaging centers. Most patients
can be referred to an equally qualified, yet more cost-effective independent radiologist.
Physician Offices. In June 2008, the
Government Accountability Office
(GAO) released a report on the
“Medicare Part B Imaging Services,”
which documented a dramatic
increase the number of physicians
who “self-refer” patients for imaging
performed on scanners they own or
profit from.6 According to the GAO,
approximately two-thirds of the
money Medicare spends for imaging
services went to physician offices.7
Self-referring physicians use services as much as 3.2 times more often
than physicians who referred
patients to radiologists.8 This is a
major concern in regards to appropriate use of radiology services.
Many physician offices can easily purchase or lease imaging equipment.
With scanners costing as much as $2
million, physicians may be inclined to
self-refer patients to recoup this
expense. In fact, the GAO study suggests that many physician offices performed tests for financial benefit
rather than medical necessity.
Specialty Network of Highly
Qualified, Credentialed Radiology
Providers. Today, specialized networks exist that offer nationwide
access to thousands of qualified,
credentialed radiology providers,
who consistently perform quality
tests and provide accurate test inter-
pretations. The key differentiator
between a specialty network and a traditional provider organization is the
focus and in-depth expertise in imaging services. Specialty networks are
advised by associations, such as the
American College of Radiology
(ACR), which have established quality
guidelines to ensure the most appropriate use of advanced imaging technologies. In addition due to aggressive
contract negotiations, specialty networks offer substantial cost reductions, approximately 50 to 60 percent
savings on each imaging service.
With this background on the three types
of diagnostic radiology providers, it’s
clear that specialty networks can offer a
turnkey solution to manage both cost
and quality outcomes. Using this type of
network, self-insured programs benefit
from access to highly qualified
providers, tests that provide accurate
results, and diagnostic information that
ultimately leads to quality care and optimal savings for their programs.
Whether a program is using diagnostic
radiology for workers’ compensation or
group health, there are some additional
issues and concerns to consider.
Ultimately, a specialty network can provide savings for both, and we will discuss the key criteria to utilize when
selecting the best specialty network with
a comprehensive managed approach.
Workers’ Compensation
Considerations
Diagnostic radiology is particularly
important to workers’ compensation.
Many work-related injuries are muscular
and skeletal in nature and require the
use of imaging to properly assess medical severity. An MRI can quickly determine the nature and extent of an injury.
Without this information, weeks of
physical therapy can be wasted, return
to work delayed, and the injury can actually get worse, even leading to a permanent disability.
While in recent years the number of
workers’ compensation claims has
declined, the actual medical cost com-
ponent for claims have increased. With
today’s financial pressures, it’s more
important than ever that workers’ compensation programs be proactive in
managing treatment to be both medically effective and cost efficient. The following facts point to a workers’ compensation program’s urgent need to leverage
a managed diagnostic solution:
Accepted state fees or usual-andcustomary rates (UCR) for imaging
are typically 30 to 40 percent higher
than the discount rates available
through a specialty network.
Many programs spend as much as
45 percent more than they need to
on advanced diagnostic radiology
services.
An average of two-thirds of diagnostic radiology tests are performed “out
of network” –without the benefit of a
specialty network, the result is higher costs and a lack of adherence to
quality standards.
Prompt scheduling of diagnostic
radiology services enables immediate diagnosis and early return-towork outcome results.
Today, many specialty networks offer
education, services, and tools to
address many of these specific challenges in workers’ compensation programs. For example, these networks
will often offer webinars and self-paced
learning modules to help educate workers’ compensation professionals about
the existence and benefits of a diagnostic network, and the proper procedures
that must be followed in order to
secure full radiology discounts.
Group Health
Considerations
The expansion of advanced imaging on
disease management coupled with the
aging population is a key contributor to
the growing need for diagnostic radiology services in group health. Baby
boomers are fast becoming the first generation of informed consumers regarding diagnostic imaging services. In fact,
many baby boomers have already begun
to research and leverage advanced
scans, such as full body MRIs, which
provide benefits in regards to early diagnosis and preventative medicine, and
which are increasingly being marketed
directly to patients.
With the increase in consumer-driven
health plans, health savings accounts
(HSAs), higher co-pays and deductibles,
and direct-to-consumer marketing,
there is an increased need for consumer
information regarding radiology services,
providers, pricing, and quality standards.
Many patients want to know how much
they should reasonably expect to pay for
imaging services or how to access high
quality care at the lowest possible outof-pocket cost. In order to make truly
informed medical decisions, consumers
need a resource center that not only provides pricing, but also assistance to help
distinguish and select “quality”
providers. In the group health arena, it’s
currently estimated that as much as 90
percent of radiology tests are currently
scheduled without the benefit of a specialty network management. Yet many
specialty networks offer the patient
advocacy and scheduling services that
consumers want and need.
Selecting the Right
Specialty Network
When self-insured program administrators set out to find a specialty network,
here are several questions and guidelines that they should consider:
How broad is the network’s geographic reach? Programs should be
able to schedule exams nationwide at
imaging facilities conveniently located to patients’ work and home.
What are the average savings
achieved? Self-insured programs
should expect rates that are 50 to 60
percent below today’s standard
imaging rates.
How does the network ensure
quality? Quality testing and test interpretations is a broad area that can be
addressed through several methods:
Quality Guidelines. Does the network ensure that its providers
adhere to quality guidelines established by associations like American
College of Radiology (ACR)?
Credentialing & Qualifications.
Does the network have a rigorous credentialing process? Do they meet or
exceed the National Committee for
Quality Assurance (NCQA) standards? Do they use the American
Medical Association (AMA) and
National Practitioner Data Bank
(NPDB) to verify professional credentials, licensure, and memberships?
Accreditation. Does the network
utilize ACR accreditation for a
majority of their providers? This
would ensure that the physicians
supervising and interpreting medical
imaging meet stringent education
and training standards. For facilities
that are not accredited, the network
should perform a quality audit to
ensure quality test results.
Modern Equipment. Does the network ensure that equipment is upto-date and properly maintained?
Does the network provide a patient
advocacy program? Specialty networks often offer a scheduling center that is able to schedule services
within 24 hours of a patient call.
These centers usually provide clear
information to help patients determine an appropriate price for imaging services, and to identify a quality, credentialed provider that has a
history of delivering quality tests and
test interpretations.
Diagnostic Management:
Immediate and
Substantial Results
With diagnostic radiology costs rapidly
increasing, self-insured programs must
take the appropriate steps to control
quality and costs. Partnering with a specialty network gives them access to only
the best, most qualified, and credentialed radiology providers. In turn, these
best-in-class radiologists deliver accu-
rate tests and test interpretations, which
lead to appropriate diagnosis, effective
treatment, and better overall care.
Program administrators can save 50-60
percent on costs per imaging service. In
addition, plan members will enjoy
prompt scheduling of radiology services
as well as decreased out-of-pocket radiology expenses.
Self-insured programs should find out
what type of diagnostic management
solutions their administrators have in
place. Are they leveraging a specialty
network? If not, implementation is simple and hassle-free for both the selfinsured program and the administrator.
In addition, the network is easy for plan
members to use. Program launch begins
with educational and training for all
stakeholders, regarding the specialty
network’s benefits, proper referral procedures, and the toll-free number to
reach its scheduling center, usually
printed on the member’s benefit card.
As many early adopters have discovered,
diagnostic radiology is one area of medical expense, in which they can immediately and substantially impact with the
right diagnostic management partner.
Don Duford is
President and
COO of One
Call Medical
(www.onecall
medical.com),
a
leading
provider
of
diagnostic
management
solutions. He
can be reached via email at
don_duford@onecallmedical or by phone
at 1-800-872-2875.
1 David Kaplan, “A new way to manage
radiology utilization could help limit
costs,”
Managed
Healthcare
Executive, September 2006.
1 David Kaplan, “A new way to manage
radiology utilization could help limit
costs,”
Managed
Healthcare
Executive, September 2006.
1 John Boyes, “The DRA: surviving and
thriving,” Imaging Economics,
November 1, 2008.
1 America’s Health Insurance Plans
(AHIP), “Ensuring Quality Through
Appropriate Use of Diagnostic
Imaging,” July 2008.
1 Gina Kolata “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.
1 U.S. Government Accountability
Office, “Medicare Part B Imaging
Services,” June 2008.
1 Gina Kolata, “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.
1 Gina Kolata, “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.
1 David Kaplan, “A new way to manage
radiology utilization could help limit
costs,”
Managed
Healthcare
Executive, September 2006.
2 David Kaplan, “A new way to manage
radiology utilization could help limit
costs,”
Managed
Healthcare
Executive, September 2006.
3 John Boyes, “The DRA: surviving and
thriving,” Imaging Economics,
November 1, 2008.
4 America’s Health Insurance Plans
(AHIP), “Ensuring Quality Through
Appropriate Use of Diagnostic
Imaging,” July 2008.
5 Gina Kolata “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.
6 U.S. Government Accountability
Office, “Medicare Part B Imaging
Services,” June 2008.
7 Gina Kolata, “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.
8 Gina Kolata, “Good or Useless,
Medical Scans Cost the Same,” The
New York Times, March 2, 2009.