Sticker Shock: My $8,000 MRI

BOSTON — If you’ve ever looked into the cost of an MRI or some other health care test, you know there’s a big range. And now that people are paying more and more of the cost of their care, many people are asking why health care prices vary so much.

This summer, I needed an MRI and was trying to be cost-conscious by comparing prices. I recently got the MRI bill and talked about my reaction with WBUR host Sacha Pfeiffer.

Sacha Pfeiffer: Martha, it’s fair to say you experienced some sticker shock?

Martha Bebinger: That’s fair, yes. I had a series of migraines this summer, and my doctor suggested an MRI to check just to make sure there was nothing besides headaches going on. And I went to Newton-Wellesley Hospital because that’s where my doctor is, and that’s where he suggested. I thought I was choosing a mid-range option among high- and low-cost providers in Massachusetts. But the bill was for $7,468.

For your MRI, which I should add, you had thought might be unnecessary. Did everything end up being OK?

Yes. The test showed that I just happen to have a brain with a propensity for migraine headaches. So somebody spent all this money on me. In fact I had two tests. I had an MRI and an MRA, which is a type of MRI. So one lesson I learned is be sure you know what you’re being referred for, and if you’re going to get charged for two tests, be prepared for that.

You showed me your bill, and $7,468 is what Newton-Wellesley charged for the tests, and if you include the charge for reading the test, the total is almost $8,000. Now, we should clarify that the only people who would actually pay that full amount are people who don’t have health insurance. So $8,000 is almost certainly not what your insurer will end up paying.

That’s correct, but it took a long time to figure that out because it doesn’t say that anywhere on the bill that I got from the hospital. And I thought that since the hospital knows I’m a Blue Cross member, they’d send me the Blue Cross rate — what Blue Cross was going to pay for the test. But because different insurance companies negotiate different rates with different hospitals, you don’t really know from the hospital what you’re being charged. You have to ask a lot of questions to figure that out.

You called some labs beforehand to try to get an estimate. One of the labs you called was Shields. It’s a chain that specializes in MRIs and other radiology tests, and Shields said it would have charged you between $2,000 and $3,600 for this same set of tests. Do you know why there’s that huge price difference?

I can tell you what Newton-Wellesley told me – which is that it costs a lot to keep a hospital open 24 hours a day. Hospitals lose a lot of money on some services and make it up other other services. MRIs or other tests are a place that they often make it up. And hospitals say they lose money taking care of patients with Medicare — that’s mostly for the elderly — or Medicaid — that’s government insurance mostly for the poor. So private insurance payers, like me, end up paying more for these tests so that the hospitals can have everything on balance in the end.

You also talked to Shields, the lab, about those reasons. What did Shields say?

They acknowledge that they don’t have all the overhead of a hospital. But Tom Shields, the company’s president, says charging more for an MRI to make up for losing money on other  services is just a sign that health care finances are really broken:

You’re reimbursing for diagnostic imaging at a very high rate to justify the underpayment for other lines of health care. It’s sort of like justifying the $500 Ace bandage. The logic isn’t there.

Were you able to find out how much of the charge for an MRI is based on things like cost of the machine or the salaries of the technician or doctor?

It seems to vary, but in many cases, not much. We know that hospitals with a strong brand name use that brand to boost their charges. Rick Siegrist, who teaches health care management at the Harvard School of Public Health, says hospitals, much like computer giant Apple, can really set their charges as they see fit:

A lot of times, people think they’re just going to look at what their cost is and put a little markup on that and that’s what the charge will be. That’s not the way it’s done, just like it’s not the way it’s done in private industry.

Let’s look at the bigger picture here. Because we’re not just talking about this to gawk at your MRI bill. This is an example of how hard it is for patients to be smart consumers when it comes to their health care.

Yes. We’re trying to do a lot here at WBUR to help people understand all of the changes that are happening in health care, aimed mostly at reducing costs. So we have the health care industry telling us to shop around, to be smart consumers, to make wise choices, and yet it’s really difficult to do that because we don’t understand how hospitals set prices. It often seems very arbitrary. And we’re left trying to make some changes that are very difficult to make.

And as a result, it seems there’s a long way to go before we have a transparent, easy-to-understand health care system.

That’s how it looks to me.

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  • Circusmcgurkus

    Yet another example of why single payer medical care (with everything included from acupuncture to animal-assisted therapy to herbs to allopathic and homeopathic medicine) is the only viable option.  Why should someone who cannot afford BCBS insurance be charged more because their insurer – which they chose for economic reasons – does not have the negotiating power of BCBS? 

    Ms. Bebinger will not be required to pay much if any of that artificial price.  They send that to you to make you feel like you are getting a deal with insurance.  However, that $8000 figure can actually be negotiated by an uninsured private individual (they will give an immediate %10-%15 discount to anyone who asks and negotiate down from there to those who haggle).  But, if the insurer that individual can afford has a set reimbursement rate, that is NOT negotiable for the patient to make the gap payment.  This is absurd.

    There can be a quality difference, too, in the actual image and, especially, in who is reading the results.  This is not necessarily dependent on the “name brand” of the hospital; some highly ranked hospitals have absolutely no idea what they are doing.  Indeed, “ranking” is often based on who gets the most highly coveted grant for a specific research project but has nothing to do with actual care. 

    I certainly hope that the MRI is accurate and just a colossal waste of money (which, if it happened in any other “business” they would immediately seek to figure out a safe way to lower the cost and improve the service), but the image may not be perfect and someone else might see something in there and a second opinion is not unwarranted. 

    The problem is, especially in MA where doctors are given an unreasonably high status when, in fact, they are fallible beings like the rest of us mere mortals, we have no idea who to trust and what numbers are really reflective of actual cost.  MA is outrageously expensive compared to other markets but the delivery of services ranks near the bottom of all states. 

    Patients cannot be tasked with the responsibility to question their doctors, all the bad science out there http://www.guardian.co.uk/science/series/badscience and also watch for price controls.  It is an incomprehensible burden.

    The system is broken beyond repair and we need single payer all inclusive medical coverage with cost controls built in (i.e. hospital personnel including doctor salaries must be capped).  The tax for single payer will come nowhere close to the middle man insurance idiocy we have today where doctors conspire with insurers for reimbursement value even though doctors, in theory are there for their patients and insurers are there for their stockholders.  So, the former should be mostly concerned about actual care and the latter with denying all care to reduce the costs.  But, because the former depends on the latter for reimbursement, there is an unholy alliance between the caregiver and the care denier. 

    Does anyone else see that the patient is not part of the equation at all under this rubric?

    In fact, the culprit they are identifying as evil, Medicare, is the ONE medical service system in this country that actually works!  The question is will the bozos in Washington agree to fund it in a sensible manner?  And will Americans stop complaining about the tiny portion of their paycheck that goes to this functional system?  If we doubled the payroll taxes (not the most regressive nor the most progressive but a reasonable tax that no one has even paid in 2 years), increased progressive income taxes by a reasonable amount and created real jobs to ensure that people could pay their taxes, we could institute single payer and end the medical care crisis in one fell swoop.  We won’t, but we could.

  • Doorcoach

    The most telling comment in this article is the reference to ‘the Blue Cross rate’ — it’s hard to believe that this procedure is being performed at a financial loss simply because BCBS is paying for it — rather, it’s much more likely that ‘list price’ of ~$8000 is grossly overstated, and being used for accounting purposes as a write-off when payment is defaulted on by the uninsured — an accounting game that jacks up the cost of medical care for everyone.

  • Methylman63

    A single payer system probably would have prevented you from having an MRI unless you had clear neurological deficits on exam. When there is just one insurer you loose your voice as a patient. Ask any Masshealth patient about Masshealth’s response time.

    8k for an MRI is expensive, knowing that you do not have a brain tumor or aneurysm is ..,.

  • Guest
  • Peter McIntire

    A few comments.

    First, patients need to understand some basics about MRI pricing.  The national Medicare rate for a MRI Brain (with and without contrast) is $658.29. This is Global and covers both the Technical (equipment, tech, etc.) component and Professional (radiologists) component.  Managed care companies pay around Medicare (plus or minus 20%).  Note in Boston the
    Medicare rate is a bit higher b/c costs are generally higher here than the national average.

    Second, there are over 90 American College of Radiology (ACR) MRI accredited facilities
    within 50 miles of Boston.  There is an extreme amount of competition in diagnostic imaging and facilities would much rather scan a patient at a lower self-pay rate than let the scanner sit
    empty.  Most costs in imaging is fixed and not variable.

    Third, there are many outpatient centers that are owned and operated by the same docs
    that read in the hospital.  So, don’t think you’re getting a poor read in an outpatient setting.   It’s true that outpatient centers (independent from hospital ownership) will in most cases work with patients on price.

    Understanding all three points above will result in a properly read scan at a fair price.


    http://www.mrimatch.com does all this work for you – for free.

  • Aljn

    “Exploitation of sick people”–simple–I’m sure there are SOME good people in the health care industry.                                BUT– if I were a crook- why rob a bank?? just get into health care.                11%  to 15% increase every year with inflation running about 3% or so??                     some talk about gouging the public at a Super Bowl or etc.–there you have a simple choice– health care the choice is pay or dye or be crippled etc.             how many of the lawmakers have a stake in the money from health care?           making laws that prevent competitive free enterprise to work,          with the guise of  “protecting the public”?????

  • http://www.facebook.com/people/Greg-Martin/598725150 Greg Martin

    18k for MRI of knee at Stanford

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