Boston Capital

Picturing lower costs

By Steven Syre
Globe Columnist / January 25, 2011

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As health care costs climbed over the past decade, many of the most popular tests that helped push overall medical expenses higher took place in radiology and imaging labs.

But something very different happened in 2010. While overall health care expenses appeared to increase modestly across the state, the number of radiology tests declined sharply. Official numbers for 2010 are not in, but anecdotal evidence I’ve collected suggests radiology imaging decreased 5 to 10 percent at many high-volume hospital labs and private imaging companies.

Few categories of health care expense go down at all from year to year. Drops of that size hardly ever happen.

A bad economy and more high-deductible insurance policies are big parts of that story. People are less likely to ask for an MRI in tough times, especially if it could cost hundreds of dollars out of their pockets. A growing wariness of radiation risks associated with CT scans also made an impact.

One other interesting factor: Insurers have used a variety of carrots and sticks with doctors to put a dent in radiology expenses. It’s unclear exactly how much of a difference those have made. But the insurance executives, hospital chiefs, and policy wonks who are debating cost controls should make sure they understand why radiology use fell so steeply in Massachusetts last year.

Here are a few of the numbers they would see: Partners HealthCare, the parent of Massachusetts General Hospital and Brigham and Women’s Hospital, says major imaging was down 9.2 percent last year. CT imaging was down nearly 10 percent at Beth Israel Deaconess Medical Center. Shields Health Care Group, which operates 25 imaging centers across the state, saw volume drop about 7.5 percent.

A few years ago, insurers tried to slow the growth of imaging by forcing doctors to seek authorization before ordering tests. More physicians had to call 800 numbers and answer medical questions before the insurance company agreed to cover the scan. Some hospitals have since created their own software programs to replace the phone call, but doctors still must jump through a few hoops to justify ordering an image.

Advance authorization was a modest success. Doctors didn’t like the process and complained about the time it took. But it made a dent in the growth of imaging.

More recently, insurance companies such as Blue Cross Blue Shield of Massachusetts began offering financial incentives to medical groups to lower overall expenses. Imaging moved squarely into the cost-saving cross hairs.

And some physician groups and insurers also started tracking how often individual doctors used medical tests to treat different problems, an exercise called practice pattern variation. The idea: Show doctors how they compare with each other and the most expensive outliers in a medical group change their tendencies.

Hawthorn Medical Associates in Southeastern Massachusetts used that method to track radiology tests beginning in 2007 and saw a rapid change in patterns, says Tom Lee, chief executive of the Partners HealthCare physician network. The Partners network covers about 6,000 doctors, including those at Hawthorne.

“They were higher than the rest of the network but had a 13 percent decline almost immediately, and they’ve stayed lower than the rest of the network,’’ Lee says. “We have pay-for-performance incentives in our contracts. The financial incentives are useful for creating the context for which peer pressure can be brought to bear. They would never have done this if there wasn’t a financial incentive for us to focus on radiology use.’’

Blue Cross produces similar reports covering 60 medical problems for doctors who have incentives to cut costs. It doesn’t target radiology specifically, but includes treatment of medical problems such as migraines and back pain that often involve imaging.

A chunk of the big decline in imaging services will surely evaporate when the economy improves. Some industry executives, such as Shields’s chief financial officer, Jeff Ronner, believe the entire decline can be attributed to hard times.

I’m not so sure. Doctors with financial incentives to lower costs and new information about how they practice could have a lasting impact on medical imaging and many other kinds of health care.

Steven Syre is a Globe columnist. He can be reached at