Radiology Benefit Managers — My Path to Discovery

July 22, 2010 at 10:38 AM Leave a comment


Yesterday, I was speaking with a potential client who manufactures diagnostic imaging equipment.  To my surprise, I learned about a new player in the healthcare system: diagnostic benefit managers.  Every day, I seem to learn about a new facet of healthcare delivery system that illustrates how large and complex it is.  While simplicity might be good, the healthcare industry has left that idea far behind.

Radiology benefit managers play a well-defined and important role.   Their goal is to lower radiology costs by enhancing physician knowledge.  They accomplish by making sure physicians they need to order the most appropriate diagnostic imaging exams and radiation oncology treatment plans.  Making sure patients get the right tests and treatments at the right time lowers cost, improves the quality of care and reduces the incidence of illness caused by unnecessary radiation exposure. 

A report from November 2008 in the Wall Street Journal documented how diagnostic imaging exams, such as MRIs and PET and CT scans have helped drive up health care costs .  CT and MRI scans increased by 43% in five years to a total of 96.2 million procedures in 2007, while PET scans more than tripled from 2001 to 2005, for an estimated total of 1.1 million.

A recent Government Accountability Office report found that Medicare spending on scans varied significantly by geographic region and suggested that not all procedures were “necessary or appropriate.”   Also, the new diagnostic imaging applications become available almost every day.  It can be challenging for physicians to stay abreast of all of the changes.  A radiology benefit manager can educate physicians about these advances by providing clinical evidence and diagnostic algorithms approved by leading medical societies.

Insurers can require physicians to obtain permission from a radiology benefit manager before ordering a costly imaging exam.  The effort and staff time required to gain authorization can in and of itself help reduce the conduct of unnecessary diagnostic exams. 

About 90 to 100 million consumers are enrolled in health plans that use radiology benefit managers.  This accounts for more than half of all U.S. residents with commercial insurance. The three largest radiology benefit managers are CareCore National; American Imaging Management, a WellPoint subsidiary; and National Imaging Associates, a unit of Magellan Health Services.   These organizations grant immediate approval to 70% or more of imaging requests and authorize even more after having in-depth conversations with doctors.  It is the education and sentinel effect they provide as well as the disapproval of a limited portion of the imaging requests that makes their mission cost-effective for insurers.

In the future we’ll explore these organizations in more depth.  We’ll also examine other relatively unknown but impactful  players in the healthcare system.  I sometimes wonder what portion of our healthcare costs, which total approximately 18% of gross domestic product, is due to the number of players in our complex and bureaucratic healthcare system.   Does the sheer number of players help more than it helps or vice versa?  Will healthcare reform add to the number of players and the bureaucracy of our system or will it streamline it?

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Entry filed under: Healthcare Economics, Healthcare Reform, Insurance Design, Radiology Benefit Manager. Tags: , , , , , , , , .

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