Diagnostic imaging costs in

the United States are expected to total as much as $100 billion annually

by 2005, up from about $75 billion in 2000.

Blue Cross and Blue Shield

companies across the country are developing innovative collaborations

with physicians and hospitals that focus on the most efficient use of

high-cost medical technology while safeguarding access to needed services.

For example:

- Excellus BlueCross BlueShield,

Rochester Region works closely with a community technology advisory board

on resource allocation.

- Anthem Blue Cross Blue

Shield in Virginia encourages consumers to make informed diagnostic imaging

choices through tailored co-pay arrangements.

- Blue Cross and Blue

Shield of Kansas is working with the state's medical society to establish

protocols for MRI use.

"Diagnostic imaging technology

is one the most important advancements to healthcare in the past quarter-century,"

said Allan Korn, M.D., Chief Medical Officer for the Blue Cross and Blue

Shield Association. "But it is also the most expensive technology.

One of the critical questions before all of us in healthcare is how do

we ensure access to medical technology and keep it affordable?"

The report found that demand

may be driven in part by the development of better and less-invasive technology

and consumer demand for new technology even when it is not clinically

indicated. In addition, more new procedures and machines are being added

to the healthcare system instead of replacing older procedures, according

to the study. Increasing costs and utilization of these new technologies,

coupled with growth in older technologies such as X-rays and ultrasound,

suggest duplicative use. In addition, there is a strong incentive to perform

more tests to help pay for the high initial cost of the newer technology.

Studies published earlier this

year in the American Journal of Managed Care identified medical technology

as one of the key drivers of hospital inpatient and outpatient costs and

a significant contributor to rising physician costs. New technology, the

report notes, expands the scope and quality of the products, which in

turn enhances its use in diagnosis and treatment. In some cases, this

ultimately reduces the cost of healthcare. The report also shows, however,

a need to encourage effective use of technology as it advances. A study

on the use of imaging for prostate cancer, for example, found that while

imaging had declined over time because of the recognition that it was

an ineffective diagnostic tool for some patients, more than one-half of

those with intermediate risk of the disease and one-quarter of patients

with a low risk, continued to have imaging tests.

To address rising costs in

Rochester, N.Y., a collaborative community-wide committee of hospitals,

physicians and patient representatives reviews new technologies or new

uses for existing technologies and recommends whether health plans should

cover the services. As a result, magnetic resonance imaging (MRI) rates

in the Rochester region are 19 percent lower than the national rate and

28 percent lower than the New York State rate.

"Diagnostic imaging certainly

plays a vital role in patient care," said Jonathan Kaplan, M.D.,

senior vice president and corporate medical director for Excellus BlueCross

BlueShield. "But the cost to consumers and the community for this

technology has grown dramatically in recent years. By working with providers

and others in our community to address issues such as the duplication

of services and the appropriate use of technology, patients receive the

treatment they need in a timely manner and our community isn't paying

for unnecessary duplication of services."

Wide variations in how often

imaging is used state by state and its usage when it is not clinically

effective indicates a need to promote more effective use of technology.

The number of MRI scans rose by 45 percent - from 9.3 to 13.5 million

between 1999 to 2001, with an increase in cost of as much as $3.4 billion.

In addition, the supply of MRI machines is growing at three times the

rate of the population.

Kansas, which has 47 MRI facilities

across the state, has one-fourth the population of Michigan, which has

48 MRI facilities. Still, patients in Kansas sometimes have an MRI scan

in one part of the state and then travel to another part of the state

for treatment, where an additional MRI typically is done. To help reduce

the number of unnecessary or duplicative MRIs, Blue Cross and Blue Shield

of Kansas is working with the state's medical society to establish

protocols for when and how MRI should be used.

According to the BCBSA report,

which includes data from the American College of Radiology and claims

data from a large national group health plan with more than 3 million

members, newer imaging technology costs are growing the fastest, but older

technologies (X-rays and ultrasound) still constitute a significant portion

of imaging expenses. Growth in outpatient diagnostic imaging cost (per-member

per-month) was seen in each of the four technologies between 1999 and

2001: X-Ray, 18 percent; ultrasound, 23 percent; CT scans, 45 percent;

and MRI, 47 percent.

In Virginia, Anthem Blue Cross

Blue Shield introduced $100 co-pays for all expensive imaging procedures

on high co-pay HMO plans. The program encourages consumers to make informed

diagnostic imaging choices. Many of the cost-sensitive customers who responded

were able to substitute lower-cost tests for higher-cost ones. More importantly,

patients still got the tests they needed without compromising quality.

"Keeping healthcare affordable

means finding what works to preserve access to these and other valuable

medical procedures - and we can do it without sacrificing quality

and access to the right care at the right time," said Dr. Korn. "Blue

Cross and Blue Shield companies are leaders in keeping healthcare affordable

on behalf of their members and the communities they serve. We will continue

that leadership, focusing on what works."

The Blue Cross and Blue Shield

Association is comprised of 42 independent, locally operated Blue Cross

and Blue Shield plans that collectively provide healthcare coverage for

more than 88.7 million - nearly one-in-three - Americans. For

more information on the Blue Cross and Blue Shield Association and its

Plans, visit www.bcbs.com.

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