Study validates MedSolutions cost savings

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A report by a Milliman team released by MedSolutions Inc. documents the savings generated by the MedSolutions radiology management program in 2005 and 2006 for an HMO. The study demonstrates cost savings for radiology management with statistical analyses, showing per member per month (PMPM) savings for a program that managed three high technology diagnostic imaging services covered by the MedSolutions program: contract-computerized axial tomography (CAT), magnetic resonance imaging (MRI) and positron emission tomography (PET).

“The reductions compared to trend generated for the HMO after MedSolutions’ involvement are impressive, especially in light of double-digit inflation for high-tech imaging studies,” says Kathryn Fitch, RN, MEd and principal at Milliman. “We estimate that, compared to costs based on historical trends, the HMO’s allowed PMPM experience was lower during the MedSolutions management period by 30 percent during  2Q05-4Q05 and 42 percent during 1Q06-3Q06.” 

Industry experts attribute about 10 percent of the total commercial spending to radiology, and the growth in volume has been significant. According to the Blue Cross Blue Shield Association (2006), over the course of three years (1999 to 2001) the number of MRI scans rose by more than 45 percent. Diagnostic imaging services paid under the Medicare physician fee schedule grew more rapidly than any other physician category between 1999 and 2003 – at 45 percent more than twice the growth for all physician services.

The primary drivers of the upward trend in imaging costs include: increased inappropriate and redundant use of imaging; increased sales and installation of imaging scanners; development of new high-tech imaging; and direct marketing to consumers.