Payors: Medical imaging wastes $30B a year; AHIP report touts RBMs as solution
Insurers, led by WellPoint and Magellan Health Services, are increasingly rejecting imaging procedures recommended by physicians as the companies work to cut $30 billion annually that they claim is wasted on the diagnostic tests.
Bloomberg News reported that CT and MRI scans can cost as much as $2,000 each. Almost 50 percent of scans for some conditions fail to improve patients' diagnoses or treatment, according to a report issued Monday by America's Health Insurance Plans (AHIP).
Almost $100 billion a year is spent on imaging in the United States and that may double by 2013 unless costs are reined in, according to the AHIP report.
With U.S. healthcare costs projected to grow from the current rate of 16 percent to 25 percent of the economy in 2025, insurers are turning to radiology benefit managers (RBM) who can reject unnecessary scans, Shay Pratt of the Advisory Board, a Washington, D.C.-based consultant to hospitals, told Bloomberg. Physicians ordered 115 million imaging procedures last year. However, more than 80 million Americans already must get advance approval for the tests, and that figure may grow to 120 million in two years, Pratt said.
The AHIP report said that with “a growing number of health insurance plans and employers looking to implement RBM programs, continued analysis of the success of these programs, as well as identification of additional innovative strategies to address key cost drivers and ensure appropriateness, will be essential to realizing further improvements in quality and affordability.”
“We've seen radiology growth trends in the 20 percent-plus range drop to the low single digits” when pre-screening is used in a health plan, Wayne DeVeydt, WellPoint's chief financial officer, told Bloomberg. He also noted that prior authorization “is going to be a huge growth area” for insurers.
AHIP said that several health insurance plans have reported reductions in the average growth of utilization from 25 percent to 1 percent after a RBM program was implemented. Others report an 82 percent decrease in utilization of inappropriate imaging and reductions of up to $2 per member per month over two years, according to AHIP.
However, Christopher Ullrich, MD, chair of the American College of Radiology’s managed care committee, told Bloomberg that lives may be endangered with the growth of a new bureaucracy dedicated to saving payors’ money.
“You're going to find patients with a headache who turned out to have an aneurysm or who had abdominal pain that wasn't investigated and turned out to be a tumor,” said Ullrich, a radiologist in Charlotte, N.C. It is “hard to live with arbitrary denials and a system with huge administrative burdens with no reimbursement for providing that.”
By using pre-screening, the largest U.S. payor, Minneapolis-based UnitedHealth, cut the imaging costs for certain medical plans to about 7 percent in 2007 from 12 to 18 percent annually previously, Sam Ho, a senior medical officer at UnitedHealth, told Bloomberg—a total savings of $65 million.
The AHIP report also acknowledged that “management tools such as use of evidence-based guidelines, consultation with radiology professionals, privileging and feedback on practice patterns have succeeded in beginning to address the underlying cost and quality issues.”
Bloomberg News reported that CT and MRI scans can cost as much as $2,000 each. Almost 50 percent of scans for some conditions fail to improve patients' diagnoses or treatment, according to a report issued Monday by America's Health Insurance Plans (AHIP).
Almost $100 billion a year is spent on imaging in the United States and that may double by 2013 unless costs are reined in, according to the AHIP report.
With U.S. healthcare costs projected to grow from the current rate of 16 percent to 25 percent of the economy in 2025, insurers are turning to radiology benefit managers (RBM) who can reject unnecessary scans, Shay Pratt of the Advisory Board, a Washington, D.C.-based consultant to hospitals, told Bloomberg. Physicians ordered 115 million imaging procedures last year. However, more than 80 million Americans already must get advance approval for the tests, and that figure may grow to 120 million in two years, Pratt said.
The AHIP report said that with “a growing number of health insurance plans and employers looking to implement RBM programs, continued analysis of the success of these programs, as well as identification of additional innovative strategies to address key cost drivers and ensure appropriateness, will be essential to realizing further improvements in quality and affordability.”
“We've seen radiology growth trends in the 20 percent-plus range drop to the low single digits” when pre-screening is used in a health plan, Wayne DeVeydt, WellPoint's chief financial officer, told Bloomberg. He also noted that prior authorization “is going to be a huge growth area” for insurers.
AHIP said that several health insurance plans have reported reductions in the average growth of utilization from 25 percent to 1 percent after a RBM program was implemented. Others report an 82 percent decrease in utilization of inappropriate imaging and reductions of up to $2 per member per month over two years, according to AHIP.
However, Christopher Ullrich, MD, chair of the American College of Radiology’s managed care committee, told Bloomberg that lives may be endangered with the growth of a new bureaucracy dedicated to saving payors’ money.
“You're going to find patients with a headache who turned out to have an aneurysm or who had abdominal pain that wasn't investigated and turned out to be a tumor,” said Ullrich, a radiologist in Charlotte, N.C. It is “hard to live with arbitrary denials and a system with huge administrative burdens with no reimbursement for providing that.”
By using pre-screening, the largest U.S. payor, Minneapolis-based UnitedHealth, cut the imaging costs for certain medical plans to about 7 percent in 2007 from 12 to 18 percent annually previously, Sam Ho, a senior medical officer at UnitedHealth, told Bloomberg—a total savings of $65 million.
The AHIP report also acknowledged that “management tools such as use of evidence-based guidelines, consultation with radiology professionals, privileging and feedback on practice patterns have succeeded in beginning to address the underlying cost and quality issues.”