Hospitals Typically Charge a Median $1,000 More than Imaging Clinics for an MRI

If you or someone you love has ever needed to get an MRI at a hospital, you might have had a shock when you saw the bill. According to TIME Magazine, the price for a single MRI scan, averaged across hospitals and imaging clinics, is about $2,600 (although usually considerably less at freestanding imaging clinics). However, according to Jim Cramer’s The Street, some MRIs cost as much as $13,000.

If you’re insured, some of that cost is covered by your health insurance provider. However, as CNBC reports, co-pays and deductibles are on the rise, and employees are paying a greater share of their health insurance premiums. Even if you’re insured, a five-figure diagnostic test can be financially devastating.

Add to that the stress of not knowing in advance how much the MRI will cost. Even a reporter with Kaiser Health News struggled to get a clear estimate for her own MRI and was still surprised by some add-on costs after the fact.

Between the financial stress and the anxiety of not knowing how much you’ll be charged, it’s quite natural to wonder: why are MRIs so expensive at hospitals?

Inherent Costs

Magnetic resonance imaging (MRI) is possible only because of some very advanced technology and the skills of some highly-trained specialists. An MRI is much more complex than an X-ray or CT scan, for example, and there are some built-in reasons why MRIs will always be more expensive than other imaging techniques.

Expensive to Buy and Install

While some low-field MRI machines can cost as little as $150,000, typical prices range from $1 million to as high as $3 million for a single, state-of-the-art, high-powered MRI machine that can deliver the most detailed results.

The investment for the facility doesn’t end there. MRI machines must be installed in magnetically sterile clean rooms that eliminate outside interference while protecting people and property outside the room from the magnetic fields. This can push the installation cost alone up to hundreds of thousands of dollars.

This led Money magazine to estimate that the total cost of purchasing and installing an MRI machine in a dedicated suite runs from $3 million to $5 million, an investment that must be recouped over the lifetime of the machine. And again, that’s for one single MRI machine.

Expensive to Operate and Maintain

Multimillion-dollar machines come with pricey annual maintenance costs, but that’s just the beginning.

Because MRIs use powerful magnetic fields and are cooled by liquid helium, they consume a lot of electricity. A study by PE International found that the average MRI scan uses 15 kWh, about half the energy used by an average U.S. home in a day, according to the U.S. Energy Information Administration. The same study found that, with an average of 21 patients scanned each day, each machine was using about ten times the daily electricity of a typical U.S. home.

For some MRI scans, patients are also injected with a contrast dye that contains gadolinium, a rare-earth element. This dye enhances the detail of the scan, but it can also add hundreds of dollars to the cost.

Advanced Training to Operate and Interpret

Radiologists and radiology technologists need special, advanced training to operate and interpret the results of an MRI scan.

Operating an MRI requires a sophisticated understanding of electromagnetic fields, cryogenics (to cool the superconducting magnetic coils), high-powered computing (to capture and interpret massive amounts of data), and human anatomy. Interpreting the results requires additional expertise in biomedical sciences and pathology.

Developing all this necessary expertise takes long study and practice by talented medical professionals, and they do need to be appropriately compensated for their work.

Value of the Test

While all these inherent costs are substantial, hospitals and imaging centers continue to invest in MRI machines, doctors continue to order MRI scans, and health insurance companies continue to cover them. That’s because MRIs offer several advantages over other diagnostic imaging tools.

According to the FDA, while CT scans and X-rays work well for imaging bones, MRIs provide a much more detailed look at soft tissues within the body, making them a superior diagnostic tool for many diseases and conditions. Because MRIs use a magnetic field, they also don’t expose patients to ionizing radiation.

For many medical conditions, MRIs are simply the best way for a doctor to diagnose the problem and determine the most effective course of treatment. This makes MRI scans very valuable, both economically and medically.

Extraneous Costs

The inherent costs above explain only part of why MRIs are so expensive at hospitals. A study by Amino published in Business Insider found that hospitals were charging a national median of about $1,000 more for an MRI than were freestanding imaging centers, which can usually charge less. (The median difference was only slightly less in Kentucky.) Where does that cost disparity come from?

Covering Shortfalls in Other Departments

Hospitals must offer comprehensive services for emergency and acute conditions, even though they lose money on some of these services. The losses for hospitals deepened starting in 1986, when the Emergency Medical Treatment and Labor Act (EMTALA) mandated all Medicare-participating hospitals to provide emergency treatment to all patients regardless of their ability to pay.

In theory, Medicare reimbursements would make up the cost of providing this mandated care, but in practice most hospitals lose money on it. To make up the losses, they mark up the costs of other procedures that are covered by insurance or patient self-pay. Diagnostic tests such as MRIs are a popular target for these mark-ups.

Captive Audiences and Hospital Incentives

Sometimes patients get MRIs in hospitals because… they’re already in the hospital for the condition the MRI is meant to diagnose. If you’re hospitalized with an emergency condition, it makes sense for the hospital to perform that MRI rather than transfer you somewhere offsite for the test. In that scenario, you or your insurer are paying more because of the emergency medical necessity.

If your condition is less urgent, going to a freestanding imaging clinic may be a safe alternative that can save you and your insurer a lot of money. However, a hospital has no incentive to tell you that.

There are plenty of incentives for doctors to refer you to the hospital for your MRI. More and more primary care doctors today work for hospitals, and the Wall Street Journal says they are “pushed to keep lucrative referrals in-house.” Specialists are also incentivized to keep good relationships with the hospitals who refer work to them. This all may encourage doctors to refer patients to hospitals for MRIs without mentioning lower-cost alternatives.

Lack of Transparency

As that Kaiser Health News reporter found out, it’s often incredibly difficult to get a clear estimate for an MRI at a hospital, and surprise additional charges are common. That lack of transparency makes it harder to compare costs or make informed decisions.

A new hospital price transparency rule from the Centers for Medicare and Medicaid Services took effect on January 1, 2021. The rule, which requires hospitals to publish their prices online in a consumer-friendly format, is a step in the right direction. But health costs advocacy group Clear Health Costs found that hospitals’ pricing information remained difficult to find, nearly impossible to interpret, and often was missing key information.

There’s a lot of talk in healthcare these days about patients shopping around for value, but how can patients do that when hospitals make it so difficult for patients to know how much they’ll charge?

More Affordable Options are Available

While some inherent costs will always make an MRI a more expensive diagnostic test than an X-ray, many of the extraneous costs of hospital MRIs are avoidable. Whenever you have the option, look for freestanding imaging clinics with a reputation for quality diagnostics. Ask them for a clear estimate, or use their online calculator (if they offer one) to get a quick estimate automatically.

At Heartland Imaging, that’s how we think all imaging clinics should operate, and we’re happy to give you the information you need to make a well-informed decision. You can check out our online calculator for an instant estimate today.

Heartland Imaging is a full-service imaging center in Louisville, KY, dedicated to providing consistent, quality, state-of-the-art outpatient imaging services. With locations in Louisville and Elizabethtown, our professionally trained and registered radiologists offer affordable medical imaging without compromising expertise or a compassionate experience.