Medical Imaging Under The Gun In Health-Reform Push
August 14 2009 - 11:06AM
Dow Jones News
Health-reform moves proposed by the White House and pursued in
Congress have largely steered clear of direct hits to the
medical-technology sector, with one big exception: medical
imaging.
Makers of expensive devices that glance inside the body are
staring down plans that could hurt business by lightening Medicare
payments to doctors and limiting the number of scans performed.
Such proposals follow years of rapid growth for medical scanning
that has provoked questions about overuse.
The big imaging-machine manufacturers include units of General
Electric Co. (GE), Siemens AG (SI) and Royal Philips Electronics NV
(PHG). Through their lobbying groups, they have been pushing the
case that cutting spending for imaging will hurt patients and rural
hospitals, and that prior rules passed by Congress already halted
rapid growth.
Imaging became a target based on "some dated perceptions," said
Ilyse Schuman, managing director of the Medical Imaging &
Technology Alliance, which represents many imaging companies.
Dated or not, evidence of a fast-expanding imaging market has
made it a target as the government searches for ways to control
costs while expanding health coverage. A report from the Government
Accountability Office released in June last year noted that from
2000 through 2006, Medicare spending for physician imaging services
more than doubled to $13.8 billion.
Health-reform legislation in the House of Representatives would
squeeze the industry by boosting the assumed rate at which machines
like MRI and CT scanners are used to 75% from the current 50%.
Factoring in a higher utilization rate means Medicare would pay
less per scan, according to critics.
The Senate's reform efforts haven't progressed as far, but the
industry is leery the Senate could aim for a higher utilization
rate. Meantime, the House plan also calls for a reduction in
government payments for additional scans done on nearby body
parts.
The imaging industry has highlighted the utilization-rate issue,
which it argues uses an inflated number based on a limited-scope
report from the Medicare Payment Advisory Commission, or Medpac.
They also argue that boosting the assumed utilization rate will
hurt rural hospitals where machines are likely to be used less
often than in busy, urban facilities.
Another key argument for the imaging sector is that it's already
taken its medicine, in essence, due to payment caps mandated by the
Deficit Reduction Act of 2005, which went into effect in 2007 and
has since slowed the market.
As the GAO noted in a report last September, Medicare expenses
for physician imaging services in 2007 fell to $12.1 billion - a
12.7% drop from 2006. But utilization of tests still increased,
which weighs against industry and doctor suggestions that reducing
fees would hurt patients' access. Also, despite the 2007 decline,
expenses for each Medicare beneficiary were still nearly 71% higher
in 2007 than they were seven years earlier, GAO said.
The Centers for Medicare & Medicaid Services "remains
concerned about the high volume of imaging services and their value
to beneficiaries," GAO said in the September report.
A study from an outside research firm, paid for and recently
promoted by the imaging lobby, concluded that this growth can be
pegged to rapid technological improvements. James Thrall,
radiologist-in-chief at Massachusetts General Hospital in Boston,
agreed.
"Growth has been confused with overutilization," he said.
Thrall is also chairman of the board of chancellors at the
American College of Radiology. The group says it has not taken a
position either for or against current congressional health-reform
proposals.
The House bill as now configured may restrain imaging, but it
could have been gone further. The bill does not include a plan from
President Barack Obama's proposed 2010 fiscal budget to use
so-called "radiology benefit managers" to vet and clamp down on
scans for Medicare patients, for example. Private insurers commonly
use these services.
William Peck, who directs the Center for Health Policy at
Washington University in St. Louis, said it's beyond debate that
medical imaging has revolutionized patient care, but is also used
too much. But he doesn't think the House legislation gets at the
causes of overuse, such as doctors hedging against the threat of
malpractice suits.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com