Japanese study touts low-cost MRI

August 11, 1993

Is there life for MRI after health-care reform? A recent studyof MRI diffusion in Japan suggests that the answer is yes--butat a price. MRI has frequently played the role of villain in the ongoingdrama of rising health-care costs in the U.S. The

Is there life for MRI after health-care reform? A recent studyof MRI diffusion in Japan suggests that the answer is yes--butat a price.

MRI has frequently played the role of villain in the ongoingdrama of rising health-care costs in the U.S. The modality isoften cited as an example of big-ticket medicine gone awry; thefact that there are more scanners operating in Los Angeles thanin all of Canada is a common refrain sung by many cost-cutters.

The per capita ratio of MRI scanners to population is higherin Japan than in the U.S., however, and Japan is experiencingno health-care cost-control crisis. Japan's percentage of health-carespending as a share of gross national product has remained constantfor the past 10 years, according to Dr. Ryu Niki of the JapanUniversity of Social Welfare.

"In Japan there are no people who argue that health-caretechnologies are the main culprits in cost increases," Nikitold SCAN. "Generally speaking, we do not have a health-carecost crisis."

Niki recently completed a study on diffusion of MRI in Japanthat examines the country's success at balancing cost containmentwith high-tech medicine. Niki and his co-researcher, NicholasJ. Mankovich of the University of California at Los Angeles, foundthat the key is setting very low reimbursement rates for MRI scans.

Japan's Ministry of Health and Welfare, which sets the nationwidefee schedules followed by private insurance companies, has peggedthe MRI reimbursement rate at $200 per scan, one-fifth of theU.S. average. This rate was established in 1985 and has stayedvirtually the same ever since, Niki said.

At the same time, Japan adopted a laissez-faire policy regardingMRI diffusion. There are no restrictions on MRI acquisition, suchas the certificates of need (CON) required in many states in theU.S. The result of the Japanese model has been widespread butcost-efficient MRI diffusion, with sales of low- and mid-fieldscanners predominating.

"Since private hospitals in Japan wholly depend on reimbursementrevenue, it is crucial for them to adopt cost-effective (low-field)machines," the study said. "On the other hand, hospitalswith high-field machines cannot escape from a deficit in MRI operation."

Hospitals with high-field machines--usually larger, publichospitals--receive public subsidies that enable them to operateMRI equipment at a loss, according to Niki.

While Japan has recently experienced a surge in high-fieldpurchasing, low- and mid-field units remain most common. About20% of Japanese magnets are high-field, compared to 44% in theU.S.

Other findings in the study include:

  • total expenditure on MRI in Japan is one-tenth of thatin the U.S.;

  • Japan's ratio of MRI scanners to population standsat 13.6 per million, compared to 12.3 per million in the U.S.;

  • 89% of all Japanese magnets are installed in hospitals,compared to just over 50% in the U.S.; and

  • Japanese hospitals annually spend 3% to 4% of a scanner'soriginal acquisition cost on service, compared to about 8% inthe U.S.

The study also found that discounting is more dramatic in Japanthan in the U.S. Although a Ministry of Health and Welfare studyfound list prices on three MRI models to be 50% higher in Japan,vendors were more apt to discount. The discounts ranged from 51%on a 1-tesla Siemens Magnetom Impact to 80% on Hitachi and Shimadzu0.5-tesla scanners.

Would the Japanese model work in the U.S.? While the idea mightbe tempting to Clinton administration cost-cutters, the realityis likely to be different. There are enough disparities betweenthe health-care systems of the two nations to render such a comparisonproblematic.

For one thing, much of the cost savings inherent in the Japanesemodel come at the expense of radiologists. There are three timesas many radiologists per capita in the U.S. than in Japan, andas a result staffing levels--and thus labor costs--for MRI scannerstend to be much lower. In addition, far more nonradiologists areresponsible for reading MRI scans in Japan than in the U.S.

But the study can provide useful insight into the utility ofusing reimbursement levels rather than acquisition restrictionslike CONs to lower health-care costs, according to Niki.

"The essential point is reimbursement control," hesaid. "If the American people really wish to control health-carecosts, you must introduce a (system with) a national fee schedule."