Fancy Imaging Equipment Runs Rampant Among Doctors

Fancy Imaging Equipment Runs Rampant Among Doctors

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Entrepreneurs are among America’s most celebrated personalities, but when it comes to entrepreneurial activity in the doctor’s office, the results can be harmful to your health and your pocketbook.

In recent years, thousands of physicians installed fancy imaging equipment in their offices. Companies like General Electric and Siemens sold powerful magnetic resonance imaging (MRI) and computed tomography scanning (CT) machines as a convenience to patients, who no longer have to schedule a separate visit at an imaging facility. The machines have been a money-maker for doctors, who now bill for the service instead of losing the fee to the local radiologist.

Orthopedists, neurologists and cardiologists have been among the larger purchasers of the machines. The result, according to a new study in the journal Health Affairs, has been an explosion in their use.

According to Laurence Baker, a professor of health services research at Stanford University, the number of MRI scans ordered by orthopedists soared from 46 per 1,000 episodes of care in 1999, when the machine purchasing explosion took off, to 72 per 1,000 episodes of care in 2005. Neurologists ordered 148 MRI images per 1,000 episodes in 1999 compared to 183 per 1,000 physician visits in 2005.

This latest study confirmed an analysis performed by the Medicare Payments Advisory Commission. In its June 2009 report to Congress, government-funded researchers found that spending on imaging services for the average senior citizen grew twice as fast as the cost of physician services between 2002 and 2007, with the highest growth rates occurring in offices where physicians owned the machines.

“There are reasons to be concerned that some of the increased use in recent years may not be appropriate, which contributes to Medicare’s growing financial burden on taxpayers and beneficiaries,” the report concluded.

The rising use of imaging in medical practices may also be harming some patients. For instance, high-resolution images can find coronary blockages that would otherwise remain undiagnosed by cardiologists. But they can also send out false alarms, leading to unnecessary invasive procedures to open an unclogged artery.

A recent study in the Journal of the American College of Cardiology found that using CT scans on people with symptoms of coronary artery disease (persistent shortness of breath, for instance, or intermittent chest pains) identified blockages that weren’t actually there more than 50 percent of the time. That leads to unnecessary cardiac catheterization operations to look for these falsely identified blockages, which drives health care costs unnecessarily higher.

And in a small percentage of procedures, it results in serious complications like perforated arteries, which can require major surgery that usually has long-term negative consequences for the patient’s overall health. “This high false-positive rate has potentially serious implications, leading to unnecessary and potentially risky procedures that threaten to accelerate already-excessive health care costs,” said Steven Nissen, a leading cardiologist at the Cleveland Clinic.   

I spoke this week with Bruce Hillman, a professor of radiology at the University of Virginia and co-author with Jeff Goldsmith of “The Sorcerer’s Apprentice: How Medical Imaging is Reshaping Healthcare.”  He estimates that Medicare could save at least $5 billion a year – about a third the cost of keeping physician salaries at their current levels – by reining in inappropriate use of imaging services.

“There are good reasons for imaging use rising rapidly,” he said. “The population’s age is rising; the incidence of chronic disease is rising.

“But self-referral, where there is a very big financial incentive” is a major factor, he said. Given that physicians invest big money – usually upwards of a million dollars – to acquire the machine and they control the flow of patients, “diagnostic testing is increasing rather than more conservative means of reaching diagnoses.”

Congress tried once before to rein in physician self-referrals. The so-called 1992 Stark law (named after Pete Stark, D-Calif., a leading health expert on the House Ways and Means Committee) prohibited physicians from investing in free-standing imaging facilities.

But the law left a loophole. Physicians could install machines in their offices. The idea was to allow small x-ray machines for patient convenience.

But in the past decade, that loophole has been exploited by machinery manufacturers and their salesmen, who often visited physicians bearing detailed financial plans about how much “patient flow” it would take to make sizable profits off the pricey MRI, CT and PET scanning machines. “The spirit of the law has clearly been violated,” said Hillman.

The recession has slowed sales in the past few years. Additionally, seniors, who must make a 20 percent co-pay for the price of the scan, are learning to “just say no.” Self-insured employers and some insurance companies are also cracking down on overuse by turning to radiology management firms to review claims.

But the key to reining in inappropriate use, Hillman said, is to remove physicians’ financial incentives entirely by eliminating the loophole left in the 1992 Stark law. “It would absolutely end the self-referral problem,” he said.

Alas, there substantial opposition to that move. The American Medical Association in 2005 passed a resolution opposing any effort to limit physicians’ right to order images for their own patients in their own offices. Perhaps Congress should attach the loophole’s repeal to the doc-fix that will be voted on in the Senate Wednesday.

Wouldn’t that be a pretty picture.

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spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.