Sticker Shock: My $8,000 MRI

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.