The median price difference for MRIs in hospitals versus freestanding imaging centers in the United States often varies by thousands of dollars, underscoring the need for consumers to shop around given high out of pocket health costs, data out Tuesday show.

This price spread was widest in Alaska, where the median price for hospital MRIs was $3,200 more than in imaging centers. Michigan wasn’t much better with a price difference of about $2,500.

Health care data company Amino, which released the pricing analysis, uses claims data from Medicare and up to 80% of insurers. It includes billions of health insurance claims that are 48 hours old and constantly updated.

"Most of us think there’s a big difference between $750 and $3,000 for an MRI," says Leah Binder, CEO of the Leapfrog Group, which rates hospitals. "It’s not some minor detail on an insurance plans’s balance sheet."

In the United States, 35 million MRIs are performed each year and $100 billion is spent on these services, about as much as is spent on cancer drugs, said David Vivero, Amino's founder and CEO.

“Overall health care is taking over the American wallet," said Vivero. "Our approach is to save every American money."

One way Amino can't do that — yet — is by helping people figure out whether it's cheaper to withhold their insurance card. Vivero said that may be coming.

The prices negotiated between insurers and health care providers are based on what's known as a hospital's "charge master" price. That's like a list price that nobody ever really pays.

Jeanne Pinder, founder and CEO of, says she regularly hears from users who have stories about how they saved considerable money by not using their insurance.  Her site has pricing data based on reporting and consumers' experiences in 11 areas of the country, as well as Medicare pricing for the whole country.

"In some plans, you pay up to the charge master rate until you meet your deductible," says Pinder, a former New York Times editor. "Also the negotiated price might be much higher at one provider than at another. Since those prices are hidden, it's hard for you to know."

One thing that's clear from the data is that freestanding centers on average tend to be much cheaper for MRIs so they warrant strong consideration in non-emergencies.

These facilities have much lower operating costs than hospitals, which have to meet higher standards for their buildings, maintain larger staffs, be open around the clock every day, and be prepared for a range of situations, said Doug Leonard, president of the Indiana Hospital Association.

Hospitals are also under more pressure to update their equipment more often while freestanding MRI centers may not upgrade as often, he says,

Leonard, whose state had less price variability than all but six other states. said one contributing factor could be that Indiana hospitals realize they increasingly compete in “a retail-like environment” so have to cut the costs of their most common services.

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Free-standing centers have their own challenges, said Matt Malloy, vice president for the Centers for Diagnostic Imaging, which partners with local radiology groups or hospital systems to run such facilities in 28 different markets, including Indiana.

Like hospitals, freestanding centers often find themselves in negotiations with insurers that try to bring down the cost, sometimes to levels too low for some centers to remain open.

“It’s getting tougher and tougher for independents to stay viable out there,” Malloy said. “If cost is the only thing, you run the risk of pushing a high quality provider like CDI out of the market. At a certain point, from our perspective, if we can’t maintain a quality level at that reimbursement, if that’s not a viable market and we can’t stay in, the pricing goes back to the hospital.”

Without competition n a market, health plans have less leverage to negotiate lower prices with hospitals, he added. In some cases, CT scans will do as a good a job at providing the image needed at a lower price. Places that offer only MRIs can provide, well, only MRIs.

“Like any other product, you get what you pay for and diagnostic imaging is not a place where you want to cut corners. It’s the cornerstone that provides the rest of your care plan,” Malloy said. “The most expensive scan we do is one that gives you wrong information or incomplete information.”

A study in the Spine Journal this month reported that MRIs on one patient’s lumbar spine at 10 different imaging centers in New York City showed variability in how the findings were interpreted and a "high prevalence" of errors in interpretation.

Making matters worse for consumers: Quality is not necessarily correlated with price, says Binder.

"Not all MRIs are created equal," agrees Binder.

Amino recommends doctors based upon the person's level of experience with the procedure or ailment. A top ranked doctor — with a 1% rating — would have more experience treating similar patients for the same condition than 99% of other doctors. With MRIs, the ranking is based on the distance to the consumer searching for prices because patients typically choose an imaging location rather than doctor.

The site, which is funded in large part through venture capital, also allows users to book MRIs and other appointments directly on its site, but doesn't receive any compensation to do so. Vivero says that cash prices could come soon.

The problems surrounding the lack of transparency with health care procedures goes far beyond hospitals and independent imaging centers, Pinder notes.

"The system is a mess," says Pinder. "People love to hate the insurers and the (health care) providers, but it’s the system that’s the villain.  And there are a lot of people benefiting from having the current system."

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