While the six largest radiology benefits management firms (RBMs) cover an estimated 88 million privately insured Americans, there still exists only limited information to trumpet their cost-effectiveness or positive impact on patient care, according to a study published in the June issue of the Journal of the American College of Radiology.
To model the effects of a typical RBM on a health plan with 100,000 members, lead researcher David W. Lee, PhD, of GE Healthcare and his co-authors used published data and the Medical College of Georgia’s experience with an RBM. In their simulations, they assumed an annual advanced imaging utilization rate of 90 to 180 exams per 1,000 insured members and an average 12.5% reduction in utilization. Based on the Medicare Physician Fee Schedule, the average cost of an exam was considered to be $380; the price of the RBM, $0.38 per member, per month. All parameters were designed to make RBMs cost-neutral for care.
The authors found that an RBM was estimated to save $640,263, 80% of which would go to payors and 20%, to patients. However, they discovered, fees to the RBM, along with $182,066 in costs to physicians for complying with RBM procedures, waiting on the telephone, and launching appeals, would offset these savings. Across all varying denial rates and RBM fees, 55% of simulations projected that RBMs would increase costs, while 95% of simulations pegged savings of $397,880 and $341,991 in extra costs generated by RBMs. These estimates stemmed from 5% to 15% reductions in utilization rates. As Lee and his colleagues had anticipated, savings were greater as the RBM was projected to lower utilization by higher levels.
“Our analysis demonstrated that RBMs have the potential to either increase or decrease societal costs under a range of plausible assumptions about the parameters that govern their economic impact,” the authors write. “This cost shifting creates scenarios in which RBMs are cost saving from the perspective of a health plan but actually increase costs to the healthcare system overall.”
Lee and his colleagues also estimate that when scaled up to the 88 million individuals whose care is currently affected by RBMs, providers shoulder some $160 million in additional costs from RBMs. This figure would increase exponentially, they assert, as the number of RBMs grows, given the increasing time and resources required to navigate between multiple RBMs’ procedures.
Based on their findings, the authors challenge policymakers’ estimations that RBMs could contribute to Medicare savings. “It is telling…that none of these pro-RBM recommendations considered the broader, system-wide perspective,” they state.”There is little doubt that formal technology review groups, such as the U.S > Preventive Services Task Force and the Medicare Evidence Development and Coverage Advisory Committee, would conclude that the level of available information is ‘insufficient’ to warrant recommending RBMs for widespread use.”
Lee and his co-authors add that their estimates did not take into account indirect costs associated with RBMs, including patient self-payments (at higher rates) for denials and the progression of undiagnosed diseases resulting from RBM denials. Their estimates, they say, were based on conservative RBM data in relevant literature. According to the authors, providers can minimize the costs of RBMs by increasing the appropriateness of physician orders for imaging. Alternatively, they suggest, providers can deploy clinical decision support solutions, which have been shown to effectively reduce utilization.