June 5, 2015 -- A radiology practice in Indiana has come up with a unique response to patient confusion about medical imaging costs: a flat-rate pricing program that offers set rates for various imaging exams, regardless of whether patients have insurance.
Launched in March, the program has been successful thus far for Indianapolis-based Northwest Radiology Network, President and CEO Dr. Kent Hansen, PhD, told AuntMinnie.com. And flat-rate pricing makes it easier for patients to shop for healthcare, which more are doing because of increased out-of-pocket expenses, co-payments, and deductibles.
"Potential patients were calling, asking how much a particular exam would cost, and expressing a lot of confusion about why fees were so variable," he said. "And we would say, 'Well, it depends on your insurance, both the company and the plan, and how much deductible you have, and whether the exam would be approved -- after we know all that, maybe we can give you a ballpark figure.' So we saw a flat-rate program as a way to be responsive to patients and help them make better decisions."
Northwest Radiology is a 50-radiologist group that serves 16 hospitals and 17 imaging facilities in Indiana, providing subspecialty reads across a wide variety of modalities, including mammography, nuclear medicine, MR, CT, and ultrasound. The firm has three locations.
"Our radiologists are in the community; we're not doing shady, back-alley readings," Hansen said.
To determine reasonable prices for exams, the group evaluated its real cost of doing business, volume, and mix of patients and payors. It is one of the only practices in Indiana that offers flat-rate pricing, according to Hansen.
|Pricing at Northwest Radiology vs. average fee|
|Exam||Average fee||Northwest Radiology flat fee||Minimum average savings|
|CT without contrast||$1,500||$400||73%|
|CT with contrast||$1,750||$500||71%|
|MR without contrast||$4,275||$600||86%|
|MR with contrast||$4,575||$700||85%|
|MR with and without contrast||$4,775||$800||83%|
The group is unique in that it still submits insurance claims for patients, and payments go toward a patient's deductible. Hansen concedes that the flat-rate program is not an exact science: The group may lose money at times on particular exams and make money on others.
"If the insurer charges $700 for an MR and our rate is $800, our patients only pay the $700," he said. "With inflation and the cost of equipment, our prices may have to change, but we're committed to the flat-rate idea."
The flat-rate program definitely has brought more patients in, Hansen said.
"We've gotten more patients, and people are expressing gratitude," he said. "They thank us for doing it."