Why you don’t want to get an MRI in Richmond

Let’s say you need an MRI of your lower back (and just so we’re heeding the Choosing Wisely recommendations from the American College of Physicians, we’ll say it’s for some specific suspected abnormality and not just for non-specific back pain). How much is that going to cost? Well, if you’re in Richmond, Va., the average cost approaches $2,600, while about 150 miles south in Raleigh, N.C., the average cost is less than $1,000.

These numbers on price variation come from San Francisco-based Castlight, a company aimed at helping employers with benefits management, and one of the ways it does this is by arming consumers with data and improving price transparency. Castlight made waves this week by publishing a blog post and interactive map detailing price variation in four common outpatient services across dozens of metro areas in the U.S.

Two of the services analyzed by Castlight were imaging: the aforementioned low-back MRI and CT of the head/brain. In addition to Richmond, other cities with high-cost lower back MRIs included Sacramento, Calif. (average $2,635); Norfolk, Va. (average $2,422); and Austin, Texas (average $2,132). Meanwhile, cities like Fresno, Calif.; Buffalo, N.Y.; and Seattle all had average low-back MRI costs of less than $1,000. Head CT scans exhibited similar variability, with the average cost in Fort Wayne, Ind. ($1,539), nearly triple the average in Nashville, Tenn. ($579).

Just as illuminating as the inter-city comparisons is the variation within a metro area. While Las Vegas has a middle-of-the-pack average cost for head CT at $1,061, Castlight sets the range of costs within the city as low as $323 and as high as $1,562.

What to make of these data? Certainly being equipped with this knowledge could make consumers—both employers offering a benefit plan and the insured population actually seeking imaging services—more aware of the true cost of healthcare. This transparency may in turn lead to lower costs.

But broader than the specific findings in this analysis, the Castlight report is another indication that “big data” has arrived and is making an impact right now. The implications of big data were a major focus at this year’s annual meeting of the Society for Imaging Informatics in Medicine (SIIM) and will be the subject of Health Imaging’s cover story next month.

I’m also reminded of the release of Medicare physician payment data earlier this year, which tabbed $77 billion in payments made to 880,000 physicians and other providers in 2012. That data release was a fairly blunt instrument that didn’t account for overhead costs or specific billing arrangements at various practices, but it serves as a powerful signal. It signals that robust cost and value measurement is coming and that providers need to get ahead of the game in terms of self-measurement and start thinking about how they must evaluate the value of care they are offering patients.

If providers don’t start this process for themselves now, somebody else will be doing it for them shortly—and they may not be happy with the findings.

-Evan Godt
Editor – Health Imaging