August 1, 2012

Advances in medical technology are a double-edged sword. On the one hand, they have brought huge health gains to millions of Americans. Hip and knee replacements, heart operations, brain surgery, drugs — treating everything from high cholesterol to depression — have become routine when they were once considered exotic or unimaginable. The drawback is that these same breakthroughs have driven health spending upward, because they’re prone to misuse and overuse.

Can we curb waste without undermining new technologies? Well, maybe.

We now have a study suggesting, optimistically, that proper incentives can concentrate new technologies on the patients who might most benefit. The study involves advanced diagnostic imaging, including CT scans (for computed tomography) and MRIs (for magnetic resonance imaging). From 2000 to 2005, CT and MRI use among Medicare recipients grew 14 percent annually. Now, growth of both Medicare and non-Medicare spending has slowed to estimated annual rates of 1 percent to 3 percent, the study says.

Imaging represents one of the great medical achievements since World War II. Until the 1970s, when CT scans appeared, traditional X-rays were the only way doctors could peer inside the body. X-rays’ most conspicuous limitation is that they can’t penetrate deeply into the brain. “The first CT scans were so exciting because you could see the brain much better,” says Yale historian Bettyann Kevles, author of “Naked to the Bone: Medical Imaging in the Twentieth Century.”

What CT scans can’t show, MRIs usually can. For example, CT scans are less able to image soft tissue (ligaments, tendons, nerves and blood vessels). “The two of them together give a good picture of the entire body,” says Kevles.

Better imaging is a natural ally in diagnosing many diseases and ailments: heart disease, cancer, spinal injuries, strokes and bone and muscle pain. Not surprisingly, costs ballooned. In 2009, Medicare paid $11.7 billion for medical imaging, according to Kaiser Health News.

Controlling spending on medical advances isn’t easy, because it’s favored by a three-legged alliance. First, patients want the newest and best care. Second, hospitals’ and doctors’ incomes often depend on using diagnostics and procedures in which they have invested. Finally, device and drug manufacturers want big markets for their products. There are huge pressures to apply medical advances to borderline cases where they might not be helpful.

The slowing growth of medical imaging might reflect a natural saturation: Scans are being used in most plausible clinical situations.

But the new study, posted on the Web site of the journal Health Affairs, disputes this. It argues that rapid growth was driven partly by powerful non-medical forces: Demanding patients insisted on scans; doctors feared malpractice suits if they refused; and doctors and hospitals wanted to maximize revenues. What explains slower growth is that these incentives weakened, contend economists Frank Levy of the Massachusetts Institute of Technology and David Lee of General Electric. (Note: GE is a major supplier of imaging equipment.)

One change was the adoption of prior authorization by many private insurers. Doctors usually had to get permission for advanced imaging and, if patients’ conditions didn’t comply with guidelines, explain why. This may have discouraged referrals, because doctors don’t like being overruled. Patients also became less demanding, because deductibles and co-payments rose. From 2006 to 2010, the share of workers with deductibles exceeding $1,000 grew from 10 percent to 27 percent. “Increased out-of-pocket expenses have made patients and physicians more cost conscious,” write Levy and Lee.

Finally, some reimbursement rates fell. In 2005, Congress mandated that Medicare couldn’t pay free-standing imaging centers — often owned by doctors — more than it paid hospitals for outpatient imaging. This “reduced profits for imaging centers and resulted in extensive consolidation in the industry,” the study said. Under complex reimbursement rules, doctors had incentives to establish imaging centers or install scanning devices in their offices, says Levy. And these imaging centers seemed “particularly active in stimulating demand.”

Have patients suffered from less imaging? Comprehensive studies haven’t been done, but Levy and Lee provide evidence of limited effects. Data from one insurance group suggested that about half the MRI slowdown involved lower back, elbow and knee pain. These cases often respond to “conservative treatment, including exercise,” they write. “Instead of ordering an MRI at the outset, a physician can prescribe conservative treatment and order a scan if the problem persists.”

The larger lesson involves better ways to police new technologies. The question is “how to stop physicians from just going with the flow and thereby breaking the bank,” says Levy. Some combination of prior notification, higher patient co-payments and restrained reimbursements might do the trick.