Emrah Turudu

The use of sophisticated and expensive imaging technology has mushroomed over the last decade, raising the need for cost-conscious health insurers to improve their ability to measure the technology's costs and benefits. So say medical school researchers, who found that the federal government picked up the tab for twice as many magnetic resonance imaging and computed tomography scans in 2005 than 10 years prior.

"Medicare has been willing to pay for a wide range of things, but as its budget gets tighter, it will need to be more aggressive at determining this technology's value," said Laurence Baker, PhD, professor of health research and policy and lead author of a paper in the November/December issue of Health Affairs.

MRI and CT, which take detailed pictures of the body's anatomical structures, are widely used for the early detection of cancer and other conditions. According to IMV, a market research company, 26 million MRI procedures are performed annually, and more than 10,000 CT units are estimated to be in operation. The technology does not come cheap: Baker said a state-of-the-art MRI unit can cost upward of $2 million.

For this paper, Baker and his colleagues looked at Medicare claims data to determine that MRI procedures jumped from 50 per 1,000 beneficiaries in 1995 to 173 by 2005. More than twice as many CT procedures—547 per 1,000 beneficiaries—were performed in 2005 than in 1995.

The researchers also showed a relationship between the availability of imaging units and their use: Each additional MRI unit led to 733 additional MRI procedures, and each additional CT unit was associated with 2,224 additional CT procedures.

"When you put these things in, they find a way to get used," said Baker. According to his calculations, each additional MRI unit was associated with about $550,000 in additional Medicare spending per year, and a CT unit with $685,000.

Baker said the value of increased availability is not clear. Studies show that the use of these technologies is cost-effective for particular patients with particular conditions. But there isn't this type of data on every type of patient. And adding a piece of equipment increases the likelihood that patients with a wide range of conditions, including those for whom imaging probably wouldn't be cost-effective, will be scanned.

"When we put in a new scanner, we do a bunch of procedures that wouldn't otherwise have been done," said Baker. "Sometimes that's beneficial, but not always."

To determine the benefits of this technology, Baker said it's important to look at such things as improved health outcomes and the effect on spending for other sometimes more costly diagnostic tests. There are also less tangible benefits: because scans yield quicker results than other diagnostic methods, patients usually experience less angst. "You might find out the same sort of information as traditional diagnostic techniques, but patients are happier," he said.

Given the country's spiraling health-care costs, Baker said the government and other insurers should conduct cost-effectiveness analyses that address both the obvious and intangible benefits of imaging technology.

Baker's Stanford colleague on the paper was Scott Atlas, MD, professor of radiology and a senior fellow at the Hoover Institution. Their work was funded by InHealth, a nonprofit organization that focuses on the value and impact of medical devices and diagnostics.