The Impact of Price Transparency in Radiology

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How to demonstrate quality when you cannot compete on price.

By Yoshimi Anzai, MD, MPH, Professor of Radiology at the University of Utah.

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

Drivers of the price transparency movement

The Price Transparency Rule issued by the Centers for Medicare and Medicaid (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 – putting 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% of the U.S. GDP was spent on healthcare, according to the CMS (2).  That equates to $3.8 trillion annually.

Consumers – our patients – also are struggling to pay for healthcare. They are paying more out of pocket as employers pass along costs as higher deductibles.  Health spending as a percentage of compensation for the middle class in the United States is expected to increase from 13.4% to 33.9% from 2002 to 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 that will connect patients with local doctors to cut down healthcare costs on its workers ….  as healthcare cost is one of the largest expenses for the retailer after wages. The pilot programs are being held in parts of Arkansas, Florida, and Texas.” (4) The messages of the CMS and employers seem to be getting through to consumers.

Utah Value Survey: what do patients value most?

In 2018 the University of Utah Health conducted a nationwide survey to find out what three key stakeholders—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 – receiving a 45% response – was “my out of pocket cost is affordable.” Ranked last at number five – with a 36% response rate – was “the provider knows and cares about me.” (5) 

Another key finding in the Utah Value 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% of patients would like their providers to talk about the cost of care, and 73% 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 – as in “the cheaper, the better.” Is the same true for healthcare?  The answer is, “it depends”. If goods and services are of the same quality or at least similar, such as prescription drugs, 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).  Quality dominates over price.  The question is, how about imaging?

Demonstrating value in radiology

Research shows that most patients do not perceive a difference in quality in medical imaging services. A general X-ray machine or 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 system, 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? The University of Utah Health defines value based on this equation, which will help quantify and share the value of your diagnostic imaging services.(7)

According to the University of Utah, “value is the product of the quality of care plus the patient experience at a given cost. Adapted from a concept first proposed by Harvard Business School’s Michael Porter, we created a value equation to help our health system provide the right care versus simply more care. Service was added to the numerator of Utah Value equation to give the patient an equal voice in determining value.” (7) You can read the University’s white paper on this topic and engage with their Value Survey Results Interactive Dashboard.

We must have the knowledge to explain to our stakeholders the value that radiology department provides – 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 (ASPECT score) or quantitative values of vascular narrowing (NASCET) add value to patient management.  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 protocol.
• Perform imaging tests as close to the scheduled time 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 healthcare costs to patients and our society.

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

How does your imaging department define value? And what changes are you making in radiology as a result of the price transparency movement? Please comment below.

Learn More

A Guide to Values-Based Practice in Radiography

Radiology’s Role in the Patient Experience

Patient-centered Care and the Radiologist

Yoshimi Anzai, MD, MPH, is a Professor of Radiology at the University of Utah. She completed her Diagnostic Radiology residency and neuroradiology fellowship training at the University of Michigan. She had served as the neuroradiology fellowship director at the University of Washington, subsequently became the chief of Neuroradiology at UW. She obtained her MPH from the University of Washington in Health Services funded by the GERRAF program and AHRQ K08 award.

Dr. Anzai currently serves as Associate Chief Medical Quality Officer of the University of Utah Health. She contributes to improving the safety and quality of patient care, facilitating the process standardization and coordination of care, and increase awareness of the direct costs of delivering care among providers. She received the AAMC (Associations of American Medical College) Awards to implement the Value-Driven Outcome tool in 2016 and Price Transparency Tool in 2018.

Dr. Anzai has been a longstanding member of many academic organizations, including ASNR, ASHNR, RSNA, AUR, ACR, and AAWR. She has over 20 years of experience as a neuroradiologist with a background in health services research. Her passion is to provide better coordinated patient care at a lower cost using medical imaging innovation.  Her primary imaging research interest includes head and neck cancer imaging, traumatic brain injury, and neurodegenerative disease. She is involved in imaging appropriateness and comparative effectiveness of diagnostic tests. Dr. Anzai delivered a presentation on this topic at #RSNA2020.

References

1 Centers for Medicare and Medicaid Services  https://www.cms.gov/hospital-price-transparency 

2 Centers for Medicare and Medicaid Services  https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet

3 When Markets Fail: The unmet expectations for Price Transparency; 2018 Economic Research Findings.  Vizient Research Institute

4 CNBC, Walmart to Test Programs for US Workers to Cut Its Healthcare Costs; Oct. 3, 2019; https://www.cnbc.com/2019/10/03/walmart-to-test-programs-for-us-workers-to-cut-its-health-care-costs.html

5 University of Utah Health; Value Survey: https://hbr.org/2018/02/we-wont-get-value-based-health-care-until-we-agree-on-what-value-means

6.  Enhancing Value of MRI: A Call for Action. Anzai Y, Minoshima S, Lee VS.  JMRI 2019 Jun;49(7):e40-e48  https://doi.org/10.1002/jmri.26239

7 University of Utah Health; Value Equation https://uofuhealth.utah.edu/value/value-equation.php