Reporter Elisabeth Sullivan looks at how echocardiogram testing has become a lucrative source of money for medical practices in the US and is done even when there is no reason to do it but just because the machine is there. As Dr. Eric J. Topol, a cardiologist at Scripps Health in San Diego who studies echocardiography says, “At many hospitals, the threshold for ordering an echocardiogram is the presence of a heart.”
And the charges for these tests are enormously variable. The one thing in common is that they are all much higher than what other countries charge.
Testing has become to the United States’ medical system what liquor is to the hospitality industry: a profit center with large and often arbitrary markups. From a medical perspective, blood work, tests and scans are tools to help physicians diagnose and monitor disease. But from a business perspective, they are opportunities to bring in revenue — especially because the equipment to perform them has generally become far cheaper, smaller and more highly mechanized in the past two decades.
With pricing uncoupled from the actual cost of business, large disparities have evolved. The five hospitals within a 15-mile radius of Mr. Charlap’s home here charge an average of about $5,200 for an echocardiogram, according to an analysis of Medicare’s database. The seven teaching hospitals in Boston, affiliated with Harvard, Tufts and Boston University, charge an average of about $1,300 for the same test. There are even wide variations within cities: In Philadelphia, prices range from $700 to $12,000.
In other countries, regulators set what are deemed fair charges, which include built-in profit. In Belgium, the allowable charge for an echocardiogram is $80, and in Germany, it is $115. In Japan, the price ranges from $50 for an older version to $88 for the newest, Dr. Ikegami said.
Because Mr. Charlap, 76, is on Medicare, which is aggressive in setting rates, he paid only about $80 toward the approximately $500 fee Medicare allows. But many private insurers continue to reimburse generously for echocardiograms billed at thousands of dollars, said Dr. Seth I. Stein, a New York physician who researches data on radiology. Hospitals pursue patients who are uninsured or underinsured for those payments, he added.
In Britain’s National Health Service, all echocardiograms are done in hospitals without charge. There are about 250 echocardiogram centers in the country, said Dr. John Chambers, a cardiologist at St. Thomas’ Hospital in London who studies echocardiography.
By contrast, in the United States, buying an echocardiogram machine is a good investment for an entrepreneurial practice. The number of echocardiograms ordered by cardiologists in the United States rose 90 percent from 1999 to 2008, according to a 2012 study. There are far more places to get one in New Jersey than in all of Britain, according to the Intersocietal Accreditation Commission, which accredits medical facilities.
It is not just echocardiograms. The costs for treatments are higher for a huge number of treatments.
This is the whole problem of the US health system. Providing good quality care at the lowest cost is not the only or even the main driver here. Making a lot of money for hospitals and medical professionals and health insurance companies rank highly and that distorts the system in ways that are irremediable. Is it any wonder that the per capita costs of health care in the US are 44% higher than that of the next most expensive country (Switzerland) and over twice the median cost of the OECD nations and yet, even after Obamacare, we still have 15% of the population who are uninsured and poor overall quality of care.
We need a government-administered single-payer system to replace the current crazy system.