The Relationship between Low Back Magnetic Resonance Imaging, Surgery, and Spending: Impact of Physician Self-Referral Status

Abstract

To examine the relationship between use of magnetic resonance imaging (MRI) and receipt of surgery for patients with low back pain. Medicare claims for a 20 percent sample of beneficiaries from 1998 to 2005. We identify nonradiologist physicians who appear to begin self-referral arrangements for MRI between 1999 and 2005, as well as their patients who have a new episode of low back pain care during this time. We focus on regression models that identify the relationship between receipt of MRI and subsequent use of back surgery and health care spending. Receipt of MRI may be endogenous, so we use physician acquisition of MRI as an instrument for receipt of MRI. The models adjust for demographic and socioeconomic covariates as well as month, year, and physician fixed effects. We include traditional, fee-for-service Medicare beneficiaries with a visit to an orthopedist or primary care physician for nonspecific low back pain, and no claims for low back pain in the year prior. In the first stage, acquisition of MRI equipment is a strongly correlated with patients receiving MRI scans. Among patients of orthopedists, receipt of an MRI scan increases the probability of having surgery by 34 percentage points. Among patients of primary care physicians, receiving a low back MRI is not statistically significantly associated with subsequent surgery receipt. Orthopedists and primary care physicians who begin billing for the performance of MRI procedures, rather than referring patients outside of their practice for MRI, appear to change their practice patterns such that they use more MRI for their patients with low back pain. These increases in MRI use appear to lead to increases in low back surgery receipt and health care spending among patients of orthopedic surgeons, but not of primary care physicians.