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Disparities in the Cost (and sometimes Quality) of MRIs

Posted Apr 06 2009 11:15pm

Healthcare Prices:   Looking Behind the Curtain  is a new blog that you should follow. Jeffrey Rice, CEO,HealthCare Blue Book, covers healthcare transparency news and discusses issues that you will find interesting.   His recent post discusses the disparities in health care pricing and how paying more doesn’t always mean better quality.   The fact is that the price for an MRI can range from $500-$2500 in the same geographic area.   Let’s take a look at some of the real out-of-pocket savings when consumers choose a provider that charges $500 for an MRI, rather than the provider that charges $2500 for the exact same diagnostic test.

  • An individual with a co-pay would save $100 out-of-pocket by selecting the $500 MRI , rather than using the $2500 provider
  • An individual with a high-deductible would save $2000 by selecting the $500 MRI
  • Employers that are self-insured wouldsave ½ million dollars a year just on MRIs of the knee, if they encouraged employees to use the cost-effective provider that charges $500 for their MRI.
  • Total dollar amount of claims would be reduced, and this could result in lower premiums
  • Just imagine how much $$$$ insurers would save if consumers adopted cost-effective behavior <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


One of the greatest challenges in getting people to use cost-effective providers is how do we encourage and enforce this cost-effective behavior?   One of the few unquestionable principles of economics is that people respond to incentives.   If you give people more of a reason to do something, they will do more of it.   If you make it easier to do more of something they are already inclined to do, they will also do more of it.   R educing my out-of-pocket expenses is enough of a reason for me to select the provider that offers the best value.  


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