Michal Horný, PhD, MSc, a health services researcher and assistant professor of Health Policy and Management at the University of Massachusetts Amherst, talked with Ken Herrmann, MD, MBA, from the Universitätsklinikum Essen (Germany), and Johannes Czernin, MD, from the David Geffen School of Medicine at the UCLA, about a recent analysis of U.S. imaging costs. Dr. Horný was previously an assistant professor of radiology and imaging sciences at Emory University School of Medicine (Atlanta, GA) with secondary appointments in the departments of Health Policy and Management and of Biostatistics and Bioinformatics at the Emory Rollins School of Public Health. His research focuses on issues surrounding the affordability of care and implications for health equity. He received his doctorate in health services research from Boston University School of Public Health (MA), a master’s degree in stochastics and financial mathematics from VU University Amsterdam (The Netherlands), and 2 bachelor’s degrees, one in financial mathematics and the other in economic theories, from Charles University (Prague, Czech Republic). His research has been supported by the Commonwealth Fund, the Centers for Disease Control and Prevention, the National Center for Advancing Translational Sciences, and the Harvey L. Neiman Health Policy Institute. His work has been published in high-impact peer-reviewed journals, such as Health Affairs, JAMA Internal Medicine, Cancer, the American Journal of Roentgenology, the Journal of the American College of Radiology, and the American Journal of Preventive Medicine.
Dr. Czernin: Michal, thank you for taking the time to speak with us. We wanted to discuss your recent article on the contribution of imaging to health care costs: “Decomposition of Medical Imaging Spending Growth Between 2010 and 2021 in the US Employer–Insured Population” (Health Affairs Scholar. 2024;2:1–8). Together with a student, Yang Yang, I once reported that PET imaging accounted for around 1% of Medicare cancer costs (J Nucl Med. 2011;52[suppl 2]:86S–92S) As a result, the notion that imaging (PET imaging in particular) is expensive has irritated me for a long time. How did you get into the business of medical imaging cost assessments?
Dr. Horný: Growing up, I often overheard my parents—who are both physicians in Czechia—talking about various systemic problems in Czech health care, which eventually sparked my interest in health care delivery systems. Czechia has a universal health care system that is financed through taxes. Historically, patients did not have to pay additional fees for this care. Almost 20 years ago, the Czech government implemented copayments for health care use, which became a highly divisive topic.
Michal Horný, PhD, MSc
Dr. Czernin: How high were the government-proposed copayments?
Dr. Horný: It will sound funny in the U.S. context: it was only 30 Czech crowns (about $1.50) per outpatient visit. After adjusting for differences in purchasing parity power, this would be equal to $4 or $5 per visit.
Dr. Herrmann: The average salary in the Czech Republic is around $2,500/mo, and maybe it was around $1,700/mo at that time. So we’re talking about less than 0.5% of monthly income.
Dr. Horný: Moreover, patients were protected against catastrophic spending through an out-of-pocket maximum of roughly $100/y, and those with the lowest incomes and high health care needs were eligible for subsidies. In my opinion, the cost-sharing obligations were neglibible. Yet there was public outrage against this, and the copayments were abandoned after a few years.
Dr. Herrmann: You became interested in this topic while still living in the Czech Republic?
Dr. Horný: Yes. I started looking for graduate programs where I could study health care systems, how they work, and how we should set them up. I wanted to participate in health policy development and ended up in the United States, where the health care system is so incredibly complex and, in my opinion, broken.
Dr. Czernin: That’s an interesting observation, and we’ll return to it later in this discussion.
Dr. Herrmann: You arrived in the United States in 2012?
Dr. Horný: I studied at Boston University School of Public Health in the Health Law, Policy, and Management department. The PhD program was, at the time, unfunded, so I had to find my own funding for my dissertation. As an international student, I did not have access to National Institutes of Health grants, so I sought funding from private foundations. My advisor, James F. Burgess, PhD, introduced me to Danny Hughes, PhD, who was the director of the Harvey L. Neiman Health Policy Institute of the American College of Radiology, and we were able to identify a win–win situation. I found diagnostic radiology intriguing, given that it can provide tremendous value to patients by providing information but at the same time does not directly treat patients. This is an additional level of complexity that makes assessment of the value of radiology services a little bit more challenging. I found that fascinating. One part of my dissertation looked at the dynamics of imaging prices in the commercial health care sector.
Dr. Czernin: Your recent article seems like a straightforward analysis of dynamic changes in health care costs but does not include the downstream effects of whatever management decisions are based on imaging.
Dr. Horný: Correct. This is more of a macro-level article—a broad overview of trends in spending on diagnostic imaging and the factors that drive that spending either up or down. Our analysis shows that spending on imaging in the privately insured population has been consistently falling since 2010. Even though nominal spending is going up, the share of imaging costs in total health care spending is going down.
Dr. Czernin: How much is the current contribution of imaging to health care costs?
Dr. Herrmann: In the United States, it was 10.5% in 2010 and went down to 8.9% currently, as Michal and his colleagues showed.
Dr. Horný: I should clarify a nuance related to these figures. It has been widely believed that increasing health care costs over time were being driven—in part—by growth in spending on imaging. In the past decade, we saw several policies and awareness campaigns aimed at the use of imaging in low-value settings. As a result, imaging has been intensely scrutinized.
“Our analysis shows that spending on imaging in the privately insured population has been consistently falling since 2010. Even though nominal spending is going up, the share of imaging costs in total health care spending is going down.”
Dr. Herrmann: My take-home message from your findings would be that the growth in imaging expenses was smaller than the growth of the rest of the health care costs. Is this correct?
Dr. Horný: Exactly. We showed that spending on imaging in the privately insured population in the United States during our study period did go up. But remember, I’m talking about nominal spending, so a big part of it is just price inflation—an increase in prices over time. What we showed is that spending on nonimaging health care services grew substantially faster than that for imaging services.
Dr. Herrmann: Did these cost increases slow down because the costs per imaging procedure decreased or because the number of imaging procedures grew less rapidly than the rest of health care costs?
Dr. Horný: Prices in general went up. Prices for imaging services went up pretty much at the same rate as inflation in the general economy. Health care services billed by physicians went up, actually less than inflation and less than imaging, but the prices billed by hospitals went up or increased much, much faster than all the other categories. Essentially, it’s the hospital prices of nonimaging services that drive a good amount of the overall spending growth.
Dr. Herrmann: Did you take a more granular look? Which imaging modalities increased more than others?
Dr. Horný: We didn’t drill down to specific billing codes, but we looked at different modalities. For example, the prices of MRIs stayed virtually constant. In fact, when adjusted for inflation, prices of MRIs actually decreased over time. Prices of CT scans increased a little bit less than general inflation but more than MRI prices. Prices increased the most for ultrasounds, x-rays, and especially nuclear medicine procedures. The former two are higher-volume types of services but generally at much lower prices per procedure. In contrast, nuclear medicine comprises only a small portion of the overall imaging volume. This suggests that private payers were perhaps more deliberate when negotiating prices for certain types of imaging. The thought process was probably as follows: “MRIs are very expensive. We will put a strong effort into reducing these prices. Prices for x-rays are not a priority, because, although very high volume, they are relatively inexpensive.”
Dr. Czernin: Did you also look at cost changes for PET/CT?
Dr. Horný: We did not specifically analyze prices for PET/CT. The goal of our article was to provide a high-level overview of what is happening in the imaging space and to determine whether it is still true that imaging drives the growth of health care spending. Our answer is no. More granular analyses—such as looking at PET/CT—may be conducted in follow-up projects down the road.
Dr. Czernin: What were your data sources―Medicare, private insurance, other?
Dr. Horný: In the current work, we looked at spending on imaging in the privately insured population, which includes individuals aged 0–64 y. Some people stay enrolled in employer-sponsored insurance even after they turn 65, typically in the form of Medicare supplemental insurance, and we did not analyze spending on imaging in that population. As of now, we don’t have immediate access to traditional Medicare or Medicare Advantage data.
Dr. Herrmann: You mentioned earlier that the U.S. health care system is broken. How can we fix it?
Dr. Horný: That’s a million-dollar question.
Dr. Herrmann: More like a billion-dollar question.
Dr. Horný: Many experts are out there trying to answer this question, and no one has yet quite figured it out. In my opinion, the main contributor to the poor performance of the U.S. health care system is the fragmentation of both health care delivery and health insurance. Both patients and physicians have massive administrative burdens stemming from this fragmentation. Moreover, the U.S. health care system is market-based, which, on the one hand, can drive innovation and quality but also means that these benefits are available only to those who can afford it. The market-based system hardly ever puts a cap on prices. At the end of the day, it’s the prices that make health care in the United States so inaccessible. Another contributor is the fact that practices, physicians, and hospitals have to pay large liability insurance premiums. Finally, I should mention that many physicians in the United States enter the workforce with huge student debts that must be repaid. That’s a problem as well.
Dr. Herrmann: Let’s imagine we are in dreamland and the fairy gives you 2 wishes. What would they be?
Dr. Horný: Continuous universal coverage would be my number 1 wish. That doesn’t necessarily mean a single-payer system. We can have a multipayer system for universal coverage that is substantially simplified for consumers.
Dr. Czernin: Can you just explain what you mean? Medicare for everyone?
Dr. Horný: I do not necessarily mean Medicare-for-all as a single-payer health care system. For example, I have recently changed jobs in the United States. Although I have a PhD in health policy, and health insurance benefit design is my area of expertise, I still find it extremely confusing to navigate the intricacies of changing health insurance from one employer to another and to figure out which insurance to choose from the variety of options. And even if I don’t change employers, I still must do this every single year. In Europe, I never have to think about renewing health insurance.
Dr. Czernin: Your first wish was universal coverage. What’s the second wish?
Dr. Horný: I’ll be somewhat vague here. I would want to see thoughtful restrictions on the growth of health care prices. I understand that bluntly capping prices would cause many problems down the road for health care providers, because that’s their revenue. But if done thoughtfully, the societal benefits would outweigh the harms. For example, reference pricing is a feasible market-based approach to limiting the growth of health care prices. Alternatively, allowing payers to place caps at the 90th percentile of prices in a local market, as recently proposed by the Brookings Institution’s Hamilton Project, would put pressure only on the few providers with excessively high prices while leaving everyone else intact.
Dr. Czernin: What do you think about the fee-for-service model, which is not the norm worldwide. It’s unusual in that every service is essentially paid for individually. That’s probably a significant cost driver.
Dr. Horný: Absolutely. We used to have a pure version of the fee-for-service model in the United States, but the Centers for Medicare & Medicaid Services have recently implemented many innovations tying payments to quality. Of course, there are many ways to do this. Pay-for-performance models haven’t really had much success, but Accountable Care Organizations—especially those formed by physicians and not hospitals—seem to be fairly successful in improving the quality of care while reducing costs.
Dr. Czernin: If you were to look into a crystal ball, what’s going to happen with the cost of health care and the costs of imaging in the next 10 years?
Dr. Horný: One thing I can’t see in the crystal ball is what new technologies will be out there, a factor that can totally disrupt any prediction. But working with the knowledge we have available now, it seems that we’re getting a better grasp on when imaging provides good value to patients and when it does not. In addition, we are getting better at putting effective incentive structures into place to motivate physicians and hospitals to provide imaging in high-value settings and not so much in low-value settings. Overall, I think inflation-adjusted spending on imaging will eventually plateau. Having said that, the growing and aging population is a major threat to keeping spending on imaging—and health care in general—under control.
Dr. Hermann: Thank you, Michal. Johannes and I are grateful for your participation in this discussion, which our readers will find very interesting. It was a great pleasure to meet you and learn more about your impressive work.
Footnotes
Published online Oct. 3, 2024.
- © 2024 by the Society of Nuclear Medicine and Molecular Imaging.
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