Driving Up Costs

Extensive evidence confirms that self-referring physicians perform more imaging, leading to compromised quality and unnecessary costs.

A common suspicion about automobile mechanics is that some may be inclined to uncover more problems than there really are, inducing customers to pay for more than they need. These mechanics are incentivized in their recommendations for repairs by the payments associated with them. “Drumming up business” in this way may be good for business, they believe, at least in the short run.

Last year I took my car to a service center to which I had not been before. The mechanic there said I needed an expensive service on the basis of the elapsed time since a similar service had been performed. The center would have proceeded with this recommendation had I not intervened. You see, the service had been completed recently at a different center, whose records the current center did not have. Armed with knowledge substantiated by records, I was able to avert an unnecessary service and save myself a substantial sum of money.

In some ways, radiological services may be similar to auto repair services. A consumer, in this case a patient, may find himself in the potentially awkward, inequitable position of having inferior knowledge relative to the other party making a recommendation. Unless the patient has a high level of medical knowledge in general—as well as specifically pertaining to his particular situation, as further substantiated by medical records—he may be much at the mercy of his physician.

This asymmetrical power imbalance may at least partially explain why the utilization and associated costs of medical imaging have been rising dramatically over the past few decades. For example, Medicare data show that since the early 1990s, head CTs have doubled, abdominal CTs have tripled, and chest CTs have increased fivefold.¹ Although greater access to imaging has likely improved health outcomes for many Americans, this benefit is not without its associated costs and risks; imaging overutilization can lead to overdiagnosis and subsequent overtreatment,² excessive radiation exposure can actually induce cancer,³ and rising imaging utilization has become a major driver of health care inflation.⁴

Mark D. Hiatt, MD, MBA, MS, Chief Medical Officer, HealthHelp

The rise of medical imaging involves many complex causes, but one well-known determinant is physician self-referral. Although the Stark Laws of 1989 and 1992 sought to limit physicians from profiting from self-referral of Medicare and Medicaid patients, important exceptions exist. For example, physicians can self-refer patients for imaging procedures as long as the equipment is located in their own office. The process of self-referral has been known for possibly 100 years—a time long before the emergence of modern radiology technology—but the volume of self-referred cases has increased dramatically in the last two to three decades,⁵ perhaps related to the compelling financial inducements of recent years and permitted by such loopholes as the in-office ancillary services exception.

This rising trend of self-referral is corroborated by the experience of HealthHelp, a radiology benefits management company. HealthHelp analysts looked at their data derived from requests for authorizations of advanced diagnostic imaging procedures (including CT, CTA, MRI, MRA, and PET) for Medicare patients across the country. They found a slowly, but steadily increasing proportion of requests from self-referrers—from 27% in 2009 to 31% in 2012.

Contributing to this rise, and likely to overutilization, advanced diagnostic imaging may be ordered inappropriately and/or redundantly by physicians who have imaging equipment in their offices because of financial incentives to perform more tests and the absence of expert input from radiologists as to the optimal diagnostic approach. Examples of such self-referral include orthopedists ordering MRI of the joints, neurologists ordering CT or MRI of the brain, urologists ordering CT of the abdomen and pelvis, pulmonologists ordering CT of the chest, cardiologists ordering SPECT, CTA, and PET of the heart, psychiatrists ordering PET of the brain, internists ordering ultrasound of the vessels, and family practitioners ordering radiographs.

Extensive evidence confirms that self-referring physicians perform more imaging. Some of the earliest and most impressive studies of imaging utilization were conducted by Bruce Hillman and his associates. The authors used large samples of insurance claims, effectively controlled for case mix, evaluated specific clinical situations (eg, chest and lumbar spine radiography, obstetric sonography), and stratified analyses by physician specialty.⁵ Although the results varied by specialty and clinical domain, self-referring physicians, compared to radiologists, performed imaging between 2.4 and 11.1 times as often.⁶ A second study considering a more varied set of clinical presentations found that self-referring physicians used imaging 1.7 to 7.7 times more frequently than radiologist-referring physicians.⁷

Levin and Rao described the growth of medical imaging, and promoted the practice of referring to radiologists, with additional evidence that self-referring physicians have higher utilization rates. They noted that the US General Accounting Office (unbiased regarding specialties) analyzed almost 20 million office visit claims by modality (eg, sonography, diagnostic nuclear medicine) and found utilization rates 1.95 to 5.13 times higher among self-referring physicians as compared to those referring their patients elsewhere.⁸ Levin et al compared radiologists to cardiologists ordering radionuclide myocardial perfusion studies between 1996 and 1998. Cardiologists (with the capacity to self-refer) showed 10 times the growth in their utilization across this time period as compared to nonreferring radiologists.⁹ In more recent work, Levin et al revealed that although radiologists own the majority of private-office CT facilities, the rate of growth between 2001 and 2006 was 263% for nonradiologists as compared to 85% for radiologists.¹⁰

Dozens of studies confirm substantially higher utilization by self-referring physicians. Varying by modality, physicians with some ownership in imaging equipment or centers request between 22% and 54% more imaging procedures.⁵ Furthermore, this excessive imaging may be accompanied by the twin problem of deficient quality. Mounting evidence posits that self-referring physicians are less accurate in interpreting images as compared to radiologists, and some nonradiologist specialties have lower image quality and patient safety ratings.⁵

The degree to which direct financial incentives motivate clinicians to order more often than they otherwise would is uncertain, but limited evidence suggests that such enticements are important. For example, more imaging studies were ordered in one health system after pay bonuses were tied to increases in patient billing.¹¹ Regardless of the exact motivations, Hillman argues that “in-office self-referral for high-technology imaging procedures creates conflicts of interest that undermine the public’s trust in physicians.” Like others, he argues that changing the exceptions to the Stark Laws would reduce unnecessary imaging and restore faith that doctors are primarily interested in the health of their patients.¹²

Whether it is in recommending replacement of a transmission or ordering an MRI, the presence of financial incentives may blur the reasoning process and lead to overutilization and compromised quality.

Mark D. Hiatt, MD, MBA, MS, is chief medical officer of HealthHelp, one of the major specialty benefits management companies. Hiatt completed a fellowship in cardiovascular imaging at Stanford University after a residency in diagnostic radiology at the University of Virginia and medical school at Wake Forest University. He also earned an MBA from Wake Forest.

References

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2. Brownlee S. Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer. 1st US ed. New York: Bloomsbury; 2007.
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4. Iglehart JK. The new era of medical imaging—progress and pitfalls. N Engl J Med. 2006;354:2822-2828.
5. Kouri BE, Parsons RG, Alpert HR. Physician self-referral for diagnostic imaging: review of the empiric literature. AJR Am J Roentgenol. 2002;179:843-850.
6. Hillman BJ, Joseph CA, Mabry MR, Sunshine JH, Kennedy SD, Noether M. Frequency and costs of diagnostic imaging in office practice—a comparison of self-referring and radiologist-referring physicians. N Engl J Med. 1990;323:1604-1608.
7. Hillman BJ, Olson GT, Griffith PE, et al. Physicians’ utilization and charges for outpatient diagnostic imaging in a Medicare population. JAMA. 1992;268:2050-2054.
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9. Levin DC, Parker L, Intenzo CM, Sunshine JH. Recent rapid increase in utilization of radionuclide myocardial perfusion imaging and related procedures: 1996-1998 practice patterns. Radiology. 2002;222:144-148.
10. Levin DC, Rao VM, Parker L, Frangos AJ, Sunshine JH. Ownership or leasing of CT scanners by nonradiologist physicians: a rapidly growing trend that raises concern about self-referral. J Am Coll Radiol. 2008;5:1206-1209.
11. Hemenway D, Killen A, Cashman SB, Parks CL, Bicknell WJ. Physicians’ responses to financial incentives. Evidence from a for-profit ambulatory care center. N Engl J Med. 1990;322:1059-1063.
12. Hillman BJ, Goldsmith JC. The uncritical use of high-tech medical imaging. N Engl J Med. 2010;363:4-6.