Healthcare’s bottom line

Economics may not be many people’s strong suit. The majority of us can manage only our own personal finances (some even have yet to master this feat) and anything on a more macro-level than a checkbook can be bewildering. This is why big picture fiscal debates are reduced to analogies involving family credit card debt or some other easily visualized scenario.

But these analogies belie the complexity of how markets work, particularly the healthcare market in the U.S., and there’s too much at stake for mismanagement of healthcare dollars to continue. Health expenditures in the U.S. were about $2.6 trillion in 2010, according to Kaiser Health. That’s a ten-fold increase from 1980 levels, and healthcare spending growth is projected to continue to outpace income growth in the near future. Medicare, Medicaid and the Children’s Health Insurance Program combine to make up more than one-fifth the federal budget.

Something must be done, but the question is what? The answer from many policymakers has been less than satisfactory in many instances, with across-the-board cuts being proposed, many targeting radiology specifically. Policymakers have been slow to incorporate cost-effectiveness data, as presented in one case study published in the American Journal of Roentgenology that showed the changing economics of contrast agents did little to spur changes to reimbursement policy.

In the meantime, problems persist. The practice of imaging self-referral continues, despite studies showing it raises utilization and costs. It’s a touchy subject for physicians who truly believe they are imaging appropriately and for policymakers who want to curb unnecessary image orders without disturbing effective healthcare delivery, self-referred or not.

Of course, curbing imaging utilization doesn’t automatically lower overall healthcare costs, either. Yes, advanced imaging is pricey, but a quick, accurate diagnosis provided by CT, MRI or PET study can make for more efficient treatment, saving dollars in the long run. The Harvey L. Neiman Health Care Policy Institute at the American College of Radiology reported that a dollar saved on imaging could translate into as much as three additional dollars spent on downstream costs.

It is possible to both cut the unneeded imaging studies while increasing the appropriate use of healthcare dollars. One way is through improved communication technology. Health information exchanges can cut costs for all participating members by making it easier to send data from one institution to another.

More smart strategies for reducing healthcare costs will be on display at RSNA in Chicago, Nov. 25-30, and the Health Imaging editorial team has selected a handful of sessions that we believe will be useful in illuminating the current issues surrounding healthcare economics.

Attend if you can, and if not, be sure to follow up on our website and in our print edition as we recap the highlights from the conference.


Evan Godt, staff writer