Published 7/1/2007
Ryan M. Nunley, MD; Alok Sharan, MD; Samir Mehta, MD; Jamie Genuario, MD; the Washington Health Policy Fellows

Radiology utilization presents referral, payment challenges

Health policy officials are increasingly concerned that the growing utilization of advanced technology, especially diagnostic imaging, is a major factor in the rapid increase in healthcare costs.

Radiology costs in the United States have grown to more than $100 billion annually1; diagnostic imaging is the fastest-growing expense for health plans, and is now second only to pharmaceuticals in total expenses. As a result, health plans and policy makers are making radiology utilization management a top priority.

The increasing clinical utility of newer studies such as computed tomography (CT) and magnetic resonance imaging (MRI), coupled with the greater availability of and capacity to perform these studies, has resulted in a dramatic increase in their use over the past several decades. The increasing demand for these and other new imaging techniques is not surprising in light of the rapidly advancing clinical uses for these techniques along with changes in practice patterns, patient complexity, and societal expectations.2

Anticipated growth
Unmanaged, radiology spending is expected to continue growing at a rate of 20 percent annually.1 The following factors are driving this growth: fragmentation of care, the continuous advances in diagnostic imaging technology, the affordability of imaging equipment leading to adoption and utilization in more care settings, direct advertising to patients, and an aging population.

Researchers at the Centers for Medicare and Medicaid Services (CMS) have estimated that there will be 60.6 million individuals older than age 65 by the year 2025—a 74 percent increase from 1998.3 Because Medicare reimburses approximately one third of all medical services in the United States,1 utilization of health care services among the Medicare population is of great importance in predicting needed future U.S. health care resources. Increased demand, explained in part by the aging and growth of the population and the availability of new and improved technologies, gives rise to general concerns about the overuse of imaging services.

When compared with figures from 1993, the portion of global imaging relative value units (RVUs) attributable to CT, MRI, and nuclear medicine studies has increased by nearly 62 percent.4 The inappropriate use of these imaging studies may be contributing to rising health care costs.

Management approaches
Current radiology utilization management approaches have failed to address the costs resulting from duplicate exams. An estimated $30 billion is wasted each year due to inappropriate utilization or duplication of radiographic studies. Redundant exams are performed because physicians are unaware of—or unable to access the results of—previous clinically equivalent exams. Simply providing access to previous studies could potentially result in enormous cost savings and improvements in quality of care.

Given the high cost of these studies, efforts at controlling expenditures should begin with identifying areas of highest use. Once these are identified, strategies for minimizing the inappropriate use of imaging resources can be implemented. The first step in devising cost-containment strategies is to study utilization patterns and to ensure that costly radiographic studies are used in the appropriate clinical scenarios. Information about utilization of radiology services is useful to practices, payors, and policy makers for planning growth, helping to ensure that necessary services are available for patients, making financial decisions, and negotiating contracts.

Radiographic imaging is an increasingly complex, highly technical, computerized field. The days of plain radiographs have given way to a myriad of imaging technologies. As a result, referring physicians may find it difficult to keep current on best imaging choices for given clinical indications, leading to the inappropriate radiology utilization that plagues our healthcare system.

Healthcare payors have already begun implementing policies to decrease radiology utilization and reimbursement; they are also trying to manage image ordering practices by both referring physicians and specialists. Orthopaedic surgeons must take a more active role in educating referring physicians on radiology utilization management, and not leave it to Medicare or other healthcare payors to determine what utilization criteria should be implemented in the future.

The Washington Health Policy Fellows include Ryan M. Nunley, MD; Alok D. Sharan, MD; Samir Mehta, MD; James W. Genuario, MD; Aaron Covey, MD; Sharat K. Kusuma, MD; Anil Ranawat, MD; John Flint, MD; and Alex Jahangir, MD.


  1. Health Care Financing Administration. 1999 HCFA statistics. Washington, DC: US Government Printing Office; April 2000. HCFA publication 03421.
  2. Henley MB, Mann FA, Holt S, Marotta J. Trends in case-mix-adjusted use of radiology resources at an urban level 1 trauma center. AJR 2001; 176:851–854
  3. Burkhardt JH, Sunshine JH. Utilization of radiologic services in different payment systems and patient populations. Radiology 1996; 200:201–207.
  4. Maitino AJ, Levin DC, Parker L, Rao VM, Sunshine JH. Nationwide trends in rates of utilization of noninvasive diagnostic imaging among the Medicare population between 1993 and 1999. Radiology 2003; 227:113-7.

Did you know?

  • The annual spending on diagnostic imaging in the United States is $100 billion, making imaging the second-largest and the fastest-growing item for healthcare payors.
  • An estimated $30 billion of this spending is wasted due to inappropriate utilization of imaging or duplication of studies.
  • Duplicate imaging studies account for 10 percent to 20 percent of every dollar spent on radiology services.
  • CMS estimates that there will be 60.6 million individuals older than age 65 by the year 2025, a 74 percent increase from 1998.
  • The number of musculoskeletal MRI studies performed on Medicare patients increased 134 percent from 1999 to 2005; at the same time, the number of conventional skeletal radiographs performed on these patients decreased by 4 percent.
  • Physician self-referrals constitute approximately 60 percent to 90 percent of all non-hospital radiography imaging.
  • Physicians who self-refer are 1.7 to 7.7 times as likely to order imaging as non-self-referring physicians in the same specialty who see patients with the same problems.