The Impact of Price Transparency in Radiology

There is a price transparency movement underway in health care that has the potential to impact imaging revenue at hospitals in the United States. Now is the time for radiology departments to get ahead of the movement by defining and demonstrating quality in imaging exams.

The Price Transparency Rule issued by the Centers for Medicare and Medicaid Services (CMS) requires that each hospital operating in the U.S. provides clear, accessible pricing information online about the items and services they provide as a “display of shoppable services in a consumer-friendly format.”¹ The 300 “shoppable” services are defined as non-urgent, ambulatory services that can be scheduled in advance.

There is no question that this puts a spotlight on the price of medical imaging. Why the spotlight? It is an attempt by the federal government to keep skyrocketing health-care costs in check. In 2018, 17.7 percent of the U.S. gross domestic product (GDP) was spent on health care, according to the CMS.² That equates to $3.8 trillion annually.

Consumers – our patients – also are struggling to pay for health care. They are paying more out of pocket as employers pass along costs as higher deductibles. Health care spending as a percentage of compensation for the middle class in the U.S. is expected to increase from 13.4 percent in 2002 to 33.9 percent in 2030, according to Vizient Research Institute.³ The CMS hopes that price transparency will empower consumers (our patients) to shop and compare prices before scheduling imaging and other non-urgent services – and choose the lowest-price provider or service.

The government isn’t the only force driving patients to lower-cost providers. In 2019, Walmart began piloting “a program (to) connect patients with local doctors to cut down health-care costs on its workers …. as health-care cost is one of the largest expenses for the retailer after wages.”⁴ The messages of the CMS and employers seem to be getting through to consumers.

What Do Patients Value Most?

In 2018, the University of Utah Health conducted a nationwide survey to find out what three key stakeholder groups — consumers, providers, and employers — think about value related to three components: quality, service, and cost.⁵ In the Utah Value Survey of more than 5,000 patients, more than 600 physicians, and over 500 employers, respondents were asked to rate five statements that best reflect “what you value most when getting services from a health-care provider.” The number one response for patients (at a 45 percent response rate) was “my out of pocket cost is affordable.” Ranked last at number five with a 36 percent response rate was the statement “the provider knows and cares about me.”⁵

Another key finding in the aforementioned survey is that many patients believe that “high-quality health care can also be inexpensive.”⁵ This is contrary to the notion of “high prices as a proxy for the high quality of care.” Similarly, 60 percent of patients would like their providers to talk about the cost of care, and 73 percent of employers want providers to talk with employees about the cost of care. The challenge has been the lack of such tools, training, and workflow process.

The Cheaper, the Better?

In this age of price transparency and shoppable services, one can assume that patients are looking for less expensive care. However, does the mantra of “the cheaper, the better” apply to health care? Well, it depends. If services and goods (such as prescription drugs) are of the same quality or at least similar quality, consumers will choose cheaper prices (price-sensitive). When a patient needs a knee replacement or coronary artery bypass surgery, on the other hand, the patient will not select the cheapest orthopedic or cardiovascular surgeon (price-insensitive). In these situations, quality dominates over price.

Demonstrating Value in Radiology

Now, how does this apply to imaging?

Research shows that most patients do not perceive a difference in quality when it comes to medical imaging services. A general X-ray machine or computed axial tomography (CAT) scan at one hospital seems the same as a unit at a competing location.

These findings suggest that during this time of price transparency, radiology departments need to step up their efforts to explain and demonstrate the quality they bring to diagnostic imaging. I recommend that you find opportunities to explain the quality and value of your diagnostic imaging equipment and your radiologists’ expertise to four distinct stakeholders: patients, referring physicians, health systems, and employers.⁶

If you can’t or don’t want to compete on price, you need to demonstrate value. But how is value defined in health care? According to the University of Utah Health, “value is the product of the quality of care plus the patient experience at a given cost.”⁷ Adapting a concept first proposed by Michael Porter from the Harvard Business School, the university developed a value equation to help ensure the delivery of optimal care as opposed to a quantity of services. The University of Utah Health added service to the value equation in order to help reflect the patient’s voice in the determination of health care value. You can read the University’s white paper on this topic and engage with its Value Survey Results Interactive Dashboard.

We must have the knowledge to explain to our stakeholders the value that the radiology department provides in order to avoid the discounting price war.

I also recommend that you educate your referring physicians. Quality of reports matters as much as the report turnaround time. Adherence to the society guidelines for follow-up recommendation for incidental findings or providing the categorical imaging findings of stroke head CT (ASPECTS scoring system) or quantitative values of vascular narrowing via the North American Symptomatic Carotid Endarterectomy Trial (NASCET) add value to patient management.

Eight Essential Recommendations For Promoting Your Radiology Services

Here are additional recommendations to help demonstrate the quality and value of your radiology services:

• Make sure your patients and physicians understand that you practice low-radiation dose services, and explain your practices for patient safety.
• Highlight when you have subspecialty-trained radiologists doing imaging interpretation. This can be an important differentiator.
• Incorporate a prior imaging study into the current imaging report to increase the understanding of referring physicians.
• Take time to speak with providers for complicated cases. This helps them make a treatment decision.
• Improve the efficiency of your imaging services by reducing no-shows and streamlining protocols.
• Perform imaging tests as close to the scheduled time as possible to respect patients’ time.
• Keep an open line of communication with patients to help reduce their anxiety related to imaging tests.
• Lastly, reduce wasteful examinations to help reduce overall health-care costs to patients and our society.

Final Notes

We want to believe that quality matters in radiology, not just price. To prove it, we have to be more integrated into the health-care system and set our infinite goal to improve patient care using medical imaging.

Dr. Anzai is a professor of radiology at the University of Utah, and is the co-director of Women in Health, Medicine and Sciences at the University of Utah School of Medicine. Dr. Anzai is the Associate Chief Medical Quality Officer at the University of Utah Hospitals and Clinics.

References

1. Centers for Medicare and Medicaid Services. Hospital price transparency. Available at https://www.cms.gov/hospital-price-transparency . Updated December 1, 2021. Accessed February 4, 2022.
2. Centers for Medicare and Medicaid Services. National health expenditure fact sheet. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet . Updated December 15, 2021. Accessed February 4, 2022.
3. Vizient. Facing the reality of unmet expectations for price transparency. Available at: https://newsroom.vizientinc.com/facing-reality-unmet-expectations-for-price-transparency.htm . Published March 19, 2019. Accessed February 4, 2022.
4. CNBC. Walmart to test programs for US workers to cut its healthcare costs. Available at: https://www.cnbc.com/2019/10/03/walmart-to-test-programs-for-us-workers-to-cut-its-health-care-costs.html. Published October 3, 2019. Accessed February 4, 2022.
5. Pendleton RC. We won’t get value-based health care until we agree on what “value” means. Harvard Business Review. Available at: https://hbr.org/2018/02/we-wont-get-value-based-health-care-until-we-agree-on-what-value-means. Published February 27, 2018. Accessed February 4, 2022.
6. Anzai Y, Minoshima S, Lee VS. Enhancing value of MRI: a call for action. J Magn Reson Imaging. 2019;49(7):e40-e48.
7. University of Utah Health. Value equation. Available at: https://uofuhealth.utah.edu/value/value-equation.php. Accessed February 4, 2022.

Editor’s note: This article has been adapted with permission from the original publication on Carestream’s Everything Rad blog at https://www.carestream.com/blog/ .