Costs of plain-film radiography in a partially digitized radiology department

Conventional radiography, rapid MR imaging, and conventional MR imaging for low back pain: activity-based costs and reimbursement

PURPOSE

To incorporate personnel and equipment use time in an activity-based cost comparison of conventional radiography and conventional and rapid magnetic resonance (MR) imaging for low back pain (LBP).

MATERIALS AND METHODS

At each of four Seattle Lumbar Imaging Project (SLIP) sites, patients were randomized to undergo conventional radiography or rapid MR imaging of the lumbar spine. For sample SLIP patients and for similar non-SLIP patients undergoing conventional lumbar spine MR imaging as usual care in calendar year 2000, measured imaging room use and technologist and radiologist times were multiplied by costs per minute of standard equipment acquisition, personnel compensation, and related expenses. Resulting provider-perspective costs and Seattle area Medicare reimbursements for conventional MR imaging and radiography for calendar year 2001 were used to estimate future "normative" reimbursement for rapid MR imaging.

RESULTS

For 23 conventional radiography, 27 rapid MR imaging, and 38 conventional MR imaging examinations timed in calendar year 2000, all rapid MR imaging times exceeded those of conventional radiography but were less than those of conventional MR imaging. All 0.3- and 0.35-T MR imaging room and technologist times exceeded those for 1.5-T MR imaging. Average costs (in 2001 dollars) were $44 for conventional radiography, 126 US dollars for 1.5-T rapid MR imaging, 128 US dollars for 0.3-0.35-T rapid MR imaging, 267 US dollars for 1.5-T conventional MR imaging, and 264 US dollars for 0.3-0.35-T conventional MR imaging. Conclusions regarding cost differences between conventional radiography and rapid MR imaging were robust to plausible parameter value changes evaluated in sensitivity analyses. Conventional radiography reimbursement was 44 US dollars. Applying the ratio of reimbursement (620 US dollars) to costs (264-267 US dollars) for conventional MR imaging to rapid MR imaging costs predicted reimbursement of 292-300 US dollars for the new modality.

CONCLUSION

Times and costs for rapid MR imaging are roughly three times those for conventional radiography but about half those for conventional MR imaging for LBP. While current conventional radiography costs exceed reimbursement, current conventional MR and projected rapid MR imaging reimbursements exceed costs.

Activity-based cost analysis: a method of analyzing the financial and operating performance of academic radiology departments

PURPOSE

To develop a methodology for an activity-based cost (ABC) analysis in an academic radiology department, to test the hypothesis that the business of academic radiology can be separated into three distinct businesses-clinical activity, teaching, and research-and to determine the effect of the current teaching paradigm on clinical productivity.

MATERIALS AND METHODS

Forty-seven key departmental activities were defined and distributed among the teaching, research, and clinical businesses. Individual radiologists determined the time spent in each of these activities by completing a detailed log of every activity performed during 2 weeks. All departmental revenue and costs were assigned to each activity in each of the three businesses.

RESULTS

The methodology provided a successful understanding of the relative costs of each of the businesses of teaching, research, and clinical activity. It also provided the departmental costs of performing the separate activities typical of each business. Key findings included the following: Faculty spends 72% of time in clinical activities, research is the most expensive service per direct activity hour, and clinical reads (23%) are the single largest departmental cost element.

CONCLUSION

ABC analysis can separate academic radiology into three businesses-teaching, research, and clinical-and provide a detailed understanding of the cost structure of each. This analysis identifies opportunities for improved quality of service, productivity, and cost within each business.