Economic and utilization analysis of magnetic resonance imaging units in the United States in 1985

Of the 72 clinical magnetic resonance imaging (MRI) installations operating in the United States in 1985, operations data were obtained from 47. The average annual technical operating cost of each unit is estimated at $841,500 when performing 2000 clinical procedures. Most costs are fixed and the annual cost varies slightly, between $800,000 and $882,000, with procedure volumes of 1000-3000 annually. The "typical" clinical MRI unit currently is examining 1500 patients and billing 1260 patients annually with a mean technical charge of $500. Of the procedures, 77% are neuroradiologic (head and spine). Radiologists are responsible for 93% of MRI procedures. The partial-pay/bad-debt revenue deduction is high (40%). With annual technical costs of about $820,000 and net technical revenues of $378,000, the typical unit is operating at an annual economic loss of about $440,000. An economic break-even point would be met with a charge of $1100 at the current procedure volume or a volume of 2700 procedures/year at the current charge. MRI units in outpatient locations study more patients, perform considerably more spinal examinations, and have higher charges. Compared with computed tomography at a comparable stage of development, MRI has less clinical demand, more outpatient locations, three to five times higher costs, and two-and-one-half times higher charges. To achieve economic viability with a technical charge of $500 or less, increased patient volume and third-party payer acceptance to reduce the partial-pay/bad-debt revenue factor will be required.
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