how do you justify charging $2500 for a CT scan? can't you do it for $500?

[Dr McSteamy]

how do you justify charging $2500 for a CT scan? can't you do it for $500?

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[AggieSean]

 

[pcguy2]

You are kiding right?

How can the hospital stay in business when a CT scanner costs ~1-5 million with all associated costs (insurance, service, etc). Newer gen technologies only up the price more?

Amortized over 10 years, you would need a hell of a lot of patients to make this worth it. Not even thinking about staffing costs.

 

[Dimoak]

Hospitals lovez teh moneyz and Radeologizts lovez te hot carz and fast womenz and you haz to pay for dat haha don't want to pey read your own studies lolololol!¡!i101í11!

But seriously, as pcguy mentioned, the machine itself is extremely expensive, plus you have to pay the Radiologists, CT Techs, Aides, replacement parts, service, maintenance, electric bill, insurance.....after the massive overhead, the hospital doesn't keep nearly as much of that $2500 as some people think.

 

[AggieSean]

Hospitals lovez teh moneyz and Radeologizts lovez te hot carz and fast womenz and you haz to pay for dat haha don't want to pey read your own studies lolololol!

Sig line worthy.

 

[hans19]

how do you justify charging $2500 for a CT scan? can't you do it for $500?

Your wife has expensive tastes.

 

[colbgw02]

Your wife has expensive tastes.

Nominated.

 

[Dr McSteamy]

i saw an article comparing CT scan cost.

some hospitals in the middle of nowhere only charge $600.
some charge $3000.

both are for the exact same scan.

so wtf is going on with the $3000 scan?


it may be a $1 million machine, but not every doc has to own one. They can lease, or group buy.

some docs single handedly do 15 ct's per day. out of 250 workdays per year, they're doing over 2000 per year.

that's only the diagnostic part. if they find something positive, the CT can lead to further revenue from special procedures.

so do they really need to charge $3000?

some articles list the typical cost as $500 to $1500.

so it is about the hot wimmen and fast carz after all huh?

 

[Dimoak]

i saw an article comparing CT scan cost.

some hospitals in the middle of nowhere only charge $600.
some charge $3000.

both are for the exact same scan.

so wtf is going on with the $3000 scan?


it may be a $1 million machine, but not every doc has to own one. They can lease, or group buy.

some docs single handedly do 15 ct's per day. out of 250 workdays per year, they're doing over 2000 per year.

that's only the diagnostic part. if they find something positive, the CT can lead to further revenue from special procedures.

so do they really need to charge $3000?

some articles list the typical cost as $500 to $1500.

so it is about the hot wimmen and fast carz after all huh?

The differences in overhead can be astounding in some places. You simply cannot compare the cost of something in Manhattan or Los Angeles to be the same as it would be in Ruralsville. There is a massive discrepancy in cost associated with just about any change in region or demographics, from medical procedures, to business licenses. It'll cost a lot more to open a McDonald's in Central Park than it would near a Southwest Iowa truckstop. The food will probably also be considerably more expensive in Central Park, even though it's essentially the same Big Mac. Medicine is not exempt from the standard financial equations that apply to other business sectors that provide a service.

 

[Marsupilami]

Does anyone know what an MRI scan costs on average ? A doc in Germany recently told me that 100 ml of contrast agent ( Gadolinium) alone are worth circa 10 000 Euros, around 10 ml are supposed to be needed for a scan.

 

[MrBruxist]

Don't come on this board and ask questions when you have no idea what you're talking about. No-one is charging $3000 for a CT, that's absolute nonsense. Head CT, CT Chest, CT Abd, CT Pelvis are each about ~ $300 for global reimbursement. Contrast adds about $50.

So your average patient in the ER that gets a CT Abd/Pelv w & w/o contrast is going to be charged about $600-700. Of this, the radiologist will take home around $120.

You could pan-scan your entire body for 1200 - hardly your average CT order.

Oh, and for the previous poster, it depends on the type of MRI. For example, a brain MRI will run $1300 or so if you do both with and without contrast. And no, the gadolinium contrast does not cost anywhere near 1000 euro/ml, its much cheaper than that.

 

[Marsupilami]

Oh, and for the previous poster, it depends on the type of MRI. For example, a brain MRI will run $1300 or so if you do both with and without contrast. And no, the gadolinium contrast does not cost anywhere near 1000 euro/ml, its much cheaper than that.

Oh well, I shouldn't have listened to a Nuc. 😉

 

[colbgw02]

Don't come on this board and ask questions when you have no idea what you're talking about. No-one is charging $3000 for a CT, that's absolute nonsense. Head CT, CT Chest, CT Abd, CT Pelvis are each about ~ $300 for global reimbursement. Contrast adds about $50.

So your average patient in the ER that gets a CT Abd/Pelv w & w/o contrast is going to be charged about $600-700. Of this, the radiologist will take home around $120.

You could pan-scan your entire body for 1200 - hardly your average CT order.

This.

At first I thought the OP was a troll, but since he or she is apparently serious, I'll chime in.

First of all, as already mentioned, the OP's numbers are way off. In fact, a $120 professional fee for a CT, abd/pel even seems a little high, but I'm sure there's a lot of geographic variation there.

Second of all, the profit from a scan's technical fee goes to the machine's owner, which is only occassionally also the radiologist.

Last of all, how exactly do you quantify how much a radiologic interpretation is worth in order to set the professional fee? How do you put a number on the expertise behind 13-14 years of higher level education and training? If a study is completely normal, then maybe that interpretation isn't worth much. If it uncovers a life-threatening condition, then some people would say it's priceless. So how do you put a number on that? I'll save you some time - you can't. Ultimately, that service is worth however much the market is willing to pay.

 

[gluon999]

Actually the OP is not too far off with his/her numbers.

A family member of mine got a abd/pelvic CT recently and showed me the bill. It was around $1950. Additionally, the radiologist's fee was around $125. Now this was in an area where the cost of living is quite high. So maybe the geographic area where you live does play a big role in determining the cost of the test.

 

[colbgw02]

Actually the OP is not too far off with his/her numbers.

A family member of mine got a abd/pelvic CT recently and showed me the bill. It was around $1950. Additionally, the radiologist's fee was around $125. Now this was in an area where the cost of living is quite high. So maybe the geographic area where you live does play a big role in determining the cost of the test.

I would submit that estimating the cost of something to be 125% of the actual cost is pretty far off, especially in the context of trying to find out why something is priced the way it is.

I agree that location must play a big role. After seeing this thread, I checked my hospital's computer system for the billing cost of some common radiologic examinations. Our standard abd/pelvis with IV and PO contrast bills at just over $500.

And for anybody that cares to know, $125 is about 6.4% of that $1950 CT scan cited above. If you cut the professional fee by 10% (down to $112.5), then you've only dropped the overall cost of the scan by 0.64%.

 

[radslooking]

Don't come on this board and ask questions when you have no idea what you're talking about. No-one is charging $3000 for a CT, that's absolute nonsense. Head CT, CT Chest, CT Abd, CT Pelvis are each about ~ $300 for global reimbursement. Contrast adds about $50.

So your average patient in the ER that gets a CT Abd/Pelv w & w/o contrast is going to be charged about $600-700. Of this, the radiologist will take home around $120.

You could pan-scan your entire body for 1200 - hardly your average CT order.

Oh, and for the previous poster, it depends on the type of MRI. For example, a brain MRI will run $1300 or so if you do both with and without contrast. And no, the gadolinium contrast does not cost anywhere near 1000 euro/ml, its much cheaper than that.

This is directly from my hospital data. Comes straight from billing.

Metro area >1 million people

MRI Brain +/- contrast
total charge 2,500 Avg. Insurance pays: 1900 Medicare pays: 621

CT Abdomen +/- contrast
total charge 750 Avg Insurance pays 600 Medicare pays: 310

CT Pelvis + contrast
total charge 750 Avg Insurance pays: 600 Medicare pays: 310

I am not totally sure whether the CT Abdomen and pelvis are exactly additive, (i.e. $1500 when done together)

 

[Dimoak]

I would submit that estimating the cost of something to be 125% of the actual cost is pretty far off, especially in the context of trying to find out why something is priced the way it is.

I agree that location must play a big role. After seeing this thread, I checked my hospital's computer system for the billing cost of some common radiologic examinations. Our standard abd/pelvis with IV and PO contrast bills at just over $500.

And for anybody that cares to know, $125 is about 6.4% of that $1950 CT scan cited above. If you cut the professional fee by 10% (down to $112.5), then you've only dropped the overall cost of the scan by 0.64%.

The articles the OP was referring to probably included figures for interventional CTs, which can cost twice as much as a standard abd CT with contrast.

 

[MrBruxist]

These numbers sound a bit high from my experience but may be valid in some metro areas. The amount that insurers pay is usually not a single number. It varies widely from insurer to insurer. In reviewing our groups payments from various insurers, payments vary by 30-40%.

As mentioned before, radiologists receive a small portion of the total amount collected (the professional fee). We do not control what our hospitals charge for the technical component (the largest portion of the bill for any imaging study).

This is directly from my hospital data. Comes straight from billing.

Metro area >1 million people

MRI Brain +/- contrast
total charge 2,500 Avg. Insurance pays: 1900 Medicare pays: 621

CT Abdomen +/- contrast
total charge 750 Avg Insurance pays 600 Medicare pays: 310

CT Pelvis + contrast
total charge 750 Avg Insurance pays: 600 Medicare pays: 310

I am not totally sure whether the CT Abdomen and pelvis are exactly additive, (i.e. $1500 when done together)

 

[gluon999]

So if the radiologist billed $125, what percent does he/she usually get? Who else gets a piece of that pie?? The biller, coder, etc?

 

[MrBruxist]

Time for a little primer on healthcare reimbursement... too bad they don't teach this stuff in medical school.

To be reimbursed for an imaging study, any facility using imaging must go out and contract a rate with the various insurers for reimbursement. The global reimbursement (GR) for a study is made up of a Professional Fee (the amount the rad is paid to read the scan) and a technical fee (the amount used to pay for facility rental, electricity, paying rad techs etc...).

If you're following, GR = PF + TF

The contract is for a percentage reimbursement (80% of your charge for example). You charge $1000 for an MRI ($875 TF + 125 PF), they pay $800 ($700 TF + 100 PF). How much of the $100 ends up in your paycheck depends on your situation.

Each study you read is assigned a certain number of relative value units (RVUs, a number that indicates how much work is required to interpret a study...MRI>CR>plain films). Many groups pay you a salary and in return expect you to produce a certain number of RVUs (i.e. you don't really worry about the PF).

In other groups, you might get the entire PF for each study (and have a variable yearly income) or even slightly less than the full PF with some small amount taken to supplement the partners' salaries (but hey, you'll be partner someday 😉).

Whew! Hope this made sense. In reality, it gets a lot more complicated but this should give everyone a good baseline understanding.

 

[radslooking]

These numbers sound a bit high from my experience but may be valid in some metro areas. The amount that insurers pay is usually not a single number. It varies widely from insurer to insurer. In reviewing our groups payments from various insurers, payments vary by 30-40%.

As mentioned before, radiologists receive a small portion of the total amount collected (the professional fee). We do not control what our hospitals charge for the technical component (the largest portion of the bill for any imaging study).

I see your point about different metros and different hospitals having different payor mixes. What I quoted was the average insurance payment here in our midwestern major metro. thanks

 

[gluon999]

MrBruxist, that was actually useful...thanks.

Why is it that medicare only pays a fraction of the bill? Is it because they can get away it with it b/c no one stands up to them?

Then why don't private insurance companies also follow suit and pay out as much as medicare?

 

[MrBruxist]

Gluon,

Private insurers do indeed pay more than medicare for most services. Its a big combination of factors causes this effect and it's true for almost all medical specialties.

I can't say I'm exactly sure why this is the case but a major factor is that medicare funds teaching hospitals (resident salaries etc...) and in order to receive this funding, hospitals must accept basically all medicare patients. If it weren't for this factor, there would be more providers refusing medicare patients.

Private insurers, however, almost always follow medicare reimbursement trends. That is why doctors in any field get steamed when medicare cuts reimbursement - its not necessarily because the majority of their pay is from medicare, its because the private insurers are likely to follow.

 

[Dr McSteamy]

i see.

i thought the radiologist took home a bigger chunk, seeing that lots of rads take home $3-400k per year.

well, now i feel sorry for the radiologist. a little.

but the customer is still being screwed. hospitals order so many CT's. they will cover their cost many times over. those hospitals that charge $1950 must be for profit big time.
I guess i can't blame them. gotta put food on the table.

 

[eddieberetta]

1.) Medicare and medicaid negotiate fixed rates for services in bulk. They get a discount.

2.) Private insurance companies negotiate fixed rates, often based partially on medicaid (usually more, but nowadays a new disturbing trend is to offer a percentage of medicaid!). They get a discounted rate.

3.) People who show up in extremus, or walk into the ED for some trivial complaint but convince the ED doc to order a scan get sent a bill. A huge number of these people cannot and therefore do not pay.

That meany that the remaining people who a.) are not covered by medicare/medicaid/insurance) and b.) are contributing members of society who can pay (i.e. have assets that the hospital may pursue) get sent atrocious invoices and end up paying for group 3.

See? It's called socialized medicine. Americans already have it.

 

[Daran]

i see.

i thought the radiologist took home a bigger chunk, seeing that lots of rads take home $3-400k per year.

well, now i feel sorry for the radiologist. a little.

but the customer is still being screwed. hospitals order so many CT's. they will cover their cost many times over. those hospitals that charge $1950 must be for profit big time.
I guess i can't blame them. gotta put food on the table.

My hospital charges $2500 per CT and it's taxpayer funded...

 

[nadk9f]

truman medical center in kansas city for a ct w/ contrast

*Most commonly billed hospital price $965
Hospital Price $965 to $1,343
Physician Price $118 to $183