Policy Implications of the Computed

Tomography (CT) Scanner: An Update

January 1981

NTIS order #PB81-163917
‘Library of Congress Catalog Card Number 81-600006

For sale by the Superintendent of Documents,

U.S. Government Printing Office Washington, D.C. 20402
Foreword

In August 1978, OTA published a report called Policy Implications of the Computed Tomography (CT) Scanner. The report has generated much interest in both the

CT scanner itself and Federal policies aimed at rationalizing its diffusion and use. During the summer of 1979, OTA staff reviewed the status of policies concerning the scanner and found that they were very much in the process of change. A number of staff of

congressional committees (especially the Senate Committee on Finance, which had requested the original study) expressed interest in an update of material in the original

report. In addition, OTA continued to be consulted by outside organizations and

groups, including Federal and State government agencies, on implications of CT scanners, For these reasons, OTA decided to update the 1978 report.

This paper does not repeat material in the original report. For the most part, it is

assumed that the reader is familiar with the 1978 report. Thus, basic descriptions of

the scanner and of certain Federal laws and policies are found in the earlier report.

As part of this paper, OTA has updated its list of operational CT scanners. The

OTA list apparently continues to be the most complete and reliable inventory of scanners. An analysis of data from the list is presented in chapter 2.

This paper considers the CT scanner in the context of the entire field of what has

come to be called “diagnostic imaging” (making pictures of the inside of the human

body for the purposes of diagnosis). A number of new applications of existing technologies as well as several new technologies have developed. The field of diagnostic

imaging is developing rapidly, and presents a significant challenge to policy makers.

Can the relative advantages of the different technologies be demonstrated? Can

Federal policies rationalize the use of the many technologies? Or will the new

technologies merely be added on to the existing methods, driving up costs and contributing only a small marginal benefit to people’s health?

Since this is a background paper, no policy options are presented. The purpose of

this paper is to summarize the most important development concerning CT scanners

that have occurred over the past 21/2 years. However, since the policy options of the

1978 report seem generally valid, they are reprinted in appendix A.

Drafts of the final paper were reviewed by the Health Program Advisory Committee chaired by Dr. Sidney Lee and by a number of other individuals and groups representing manufacturers, radiologists, and Federal agencies (see app. I). We are

grateful for their assistance.

JOHN H. GIBBONS

Director

111
Health Program Advisory Committee

Sidney S. Lee, Chairman

Associate Dean, Community Medicine, McGill University

Stuart H. Altman

Dean

Florence Heller School

Brandeis University

Robert M. Ball

Senior Scholar

institute of Medicine

National Academy of Sciences

Lewis H. Butler

Health Policy Program

School of Medicine

University of California, San Francisco

Kurt Deuschle

Professor of Community Medicine

Mount Sinai School of Medicine

Zita Fearon

Consumer Commission on the Accreditation

of Health Services, Inc.

Rashi Fein

Professor of the Economics of Medicine

Center for Community Health and

Medical Care

Harvard Medical School

Melvin A. Glasser

Director

Social Security Department

United Auto Workers

Mark Lepper

Vice President for Inter-Institutional Affairs

Rush-Presbyterian Medical School

St. Luke’s Medical Center

C. Frederick Mosteller

Professor and Chairman

Department of Biostatistics

Harvard University

School of Public Health

Beverlee Myers

Director

Department of Health Services

State of California

Mitchell Rabkin

General Director

Beth Israel Hospital

Frederick C. Robbins

President

institute of Medicine

Kerr L. White

Rockefeller Foundation
Computed Tomography Scanner Project Staff

Joyce C. Lashof, Assistant Director-, OTA

Health and Life Sciences Division

H. David Banta, Health Program Manager

Karen Kohlhof, Co-Project Director

H. David Banta, Co-Project Director

Chester Strobel, Research Associate

John Bell, Computer Prograrner

Kerry Britten Kemp, * Editor- and Writer

Virginia Cwalina, Administrative Assistant

Shirley Ann Gayheart, Secretary

Nancy L. Kenney, Secretary

Publishing Staff

John C. Holmes, Publishing Officer

John Bergling* Kathie S. Boss

Debra M. Datcher Patricia A. Dyson*

● Contract personnel
Contents

Chapter Page

1.

2.

3.

4.

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

NUMBER AND DISTRIBUTION OF CT SCANNERS . . . . . . . . . . . . . . . . . 9

Diffusion of Medical Technology—Some General Considerations. . . . . . . . . . . 10

Distribution of Operational Scanners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Geographic Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Institutional Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 15

Trends in the Type and Manufacture of Scanners . . . . . . . . . . . . . . . . . . . . . . . . 20

CHANGES IN FEDERAL POLICIES TOWARD CT SCANNERS . . . . . . . . . 27

Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Evaluation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......27

Regulation of Efficacy and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Diffusion and Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 32

Diffusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Utilization . . . . . . . . . . . . . . . . .. .. ... ... ... .. 36

SUMMARY AND CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

APPENDIXES

A.

B.

c.

D.

E.

F.

G.

H.

I.

Policy Alternatives (Reprinted From Policy Implications of the Computed

Tomography Scanner, Office of Technology Assessment, August 1978). . . . . . 47

Research and Development of CT and Other Diagnostic Imaging Technologies 59

CT-Related Policies of the Department of Defense and the

Veterans Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Indications for CT Scans. . . . . . . . . . . . . . . . . . . . . . ..........74

National Guidelines for Health Planning: Standards for CT Scanners. . . . . . . . 92

Amendments to Regulations Governing Reviews of CT Scanners Under 1122

and CON Programs(April 25, 1979). . . . . . . . . . . . . . . . . . ... 94

Methods of Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..98

Glossary of Acronyms and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. ... ... 105

LIST OF TABLES

Table No. Page

1.

2.

3.

4.

Medical Technology Development and Use: Formal Programs of the

Department of Health and Human Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Distribution of CT Scanners by Region and State. . . . . . . . . . . . . . . . . . . . . . . . 12

Ranking of States by CT Scanners per Million Population as of February 1979

and May 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14

Distribution of Installed CT Scanners in l0 Countries . . . . . . . . . . . . . . . . . . . . 15
Contents–-continued

Table No. Page

5. Number of CT Head and Body Scanners by Health Service Areas . . . . . . . . . . . 16

6. Distribution of CT Scanners by Type of Facility . . . . . . . . . . . . . . . . . . . . . . . . 18

7. Distribution of CT Scanners in Community Hospitals by Hospital Size . . . . . . . 18

8. Manufacturers of CT Head and Body Scanners in Use . . . . . . . . . . . . . . . . . . . . 20

B-1. Overview of Diagnostic Imaging, United States . . . . . . . . . . . . . . . . . . . . . . . 59

B-2. Sales of Diagnostic Imaging Equipment in the United States, by Year . . . . . . . 60

B-3. Types and Models of CT Scanners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

B-4. Federal Funding for R&D in Ultrasonic Imaging Diagnostic

Instrumentation , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

LIST OF FIGURES

Figure No. Page

I. Cumulative Number of CT Scanners Installed . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2. A Scheme for Development and Diffusion of Medical Technologies. . . . . . . . . . 10

3. Diffusion of Chemotherapy for Leukemia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4. Cumulative Number of CT Scanners Installed, by Manufacturer. . . . . . . . . . . . 21

B-1. Principal Components of the DSR Imaging System . . . . . . . . . . . . . . . . . . . . 62

B-2. Principal Components of Real-Time B-Mode Ultrasound Imaging System . . . 68
1.

lntroduction
1. ■

Introduction

This paper is an update of the OTA report

Policy Implications of the Computed Tomography (CT) Scanner, published in August of

1978 (129). The CT scanner remains an instructive case study of Government involvement in

the policy areas of evaluation, regulation of diffusion and use, and financing of medical technologies.

After 7 years’ use in the United States, the CT

scanner has established itself as a revolutionary

diagnostic device (69,81,137). It has given physicians a diagnostic capability that they previously lacked. The development of this and

other diagnostic technologies has made possible

the definitive and conclusive diagnosis of some

conditions. These technologies can sometimes

guide physicians to appropriate treatments, preventing deaths and disability and relieving pain

and suffering. These basic activities are unquestionably valuable. There seems to be little doubt

that CT scanning has been a remarkably useful

addition to the array of medical technology.

During the past few years, however, both the

availability of a wide variety of new diagnostic

tests and the strong incentives to use them have

enormously increased the use of these tests. In

fact, there appears to be virtually no upper limit

on the number and kind of diagnostic tests that

a cautious and caring physician can order.

Likewise, hospitals desire to acquire new

technologies such as the CT scanner for a variety of reasons, not least of which is to make their

program more effective in relieving human suffering and sometimes saving lives. In the case of

the CT scanner, radiologists felt (and continue

to feel) that the improvement in imaging, and

thus in diagnosis, was so evident as to allow

reasonable clinicians to accept the new instrument readily. For the radiologist, CT scanning

was easier, safer, and in many cases more reliable than the X-ray procedures in use,

However, the CT scanner appeared in the

United States at a time when the benefits, risks,

and costs of medical technology were of increasing concern. Because of this concern, CT scanning has been evaluated more than is usual.

Thus, the CT scanner itself is not the problem.

The problem is much broader and concerns

appropriate use of medical technology in society. Perhaps a detailed examination of some

aspects of policy toward CT scanning can indicate how far we are from having effective

policies to promote the efficient expenditure of

our health care dollar (142). In particular, OTA

is concerned about regulatory approaches being

considered to control CT scanners and other

technologies in the absence of definitive scientific information that will allow wise decisionmaking by Federal officials or insurance companies.

The purpose of the original OTA study on the

CT scanner (129) was twofold. First, it was to

examine the usefulness and costs of CT scanning, the effect of CT scanners on medical care

delivery patterns, and ways to improve planning affecting such devices. In the background

was a concern about the implications of costly

new technologies such as CT scanners. The second purpose was to examine policies toward CT

scanners. The 1978 study examined emerging

and existing policies concerning the development, evaluation, diffusion, use, and financing

of the CT scanner. It attempted to determine the

effects, both real and potential, of those policies, and to identify problems experienced in implementing them.

Like the original report, this update (covering

the period since August of 1978) documents the

changes in the number, distribution, and diffusion of CT scanners. It also summarizes changes

in Federal policies, agencies, and programs during that time that affect research, development,

and diffusion of CT scanners, and the evaluation and financing of CT scanning. Wherever

3
4 ● Policy Implictions of of the Computed Tomography (CT) Scanner: An Update

possible, it focuses on the relationship between

changes in policy and in the numbers and distribution. Although the 1980 CT scanner is quite

different from the 1973 edition, most of the discussion treats all scanners as if they are the same

(see app. B). Nevertheless, the continued development of technological improvements in

CT scanners and the concomitant documentation of new uses for scanners, has posed a

serious problem for policymaking.

The dramatically rapid rate of diffusion of

scanners during 1975 and 1976 set the stage for

OTA’s original study. An equally dramatic

drop in this rate during 1978, 1979, and 1980

provides the backdrop for this update. During

1977, the rate of installation of scanners was

about 40 per month. (ch. 2 compares this rate of

diffusion with that of other technologies. ) In

1978, the rate fell by half to about 20 per month.

Whereas about 480 scanners were installed in

1977, only 270 units were installed in “1978.

These turnabout trends in the installation of

scanners are also reflected in the manufacture of

CT scanners. The consolidation of production

evident in 1978 is in sharp contrast to the expansion that had occurred steadily since the

mid-1970’s (see ch. 2).

This diffusion pattern has occurred during a

period of change in Federal policies toward

medical technology. With recent changes in Federal law, the Federal Government is involved in

every stage of research, development, diffusion,

and use of CT scanning (see table 1). The

Government has invested in R&D on CT scanning. But the Government also regulates CT

scanners through the Food and Drug Administration, which approves medical devices for

marketing. Since 1974, a nationwide network of

Table 1 .—Medical Technology Development and Use: Formal Programs of

the Department of Health and Human Services

Policy area Stage of development Function Agency or program

R&D . . . . . . . 1. Research and development

a. Basic research

b. Applied research

Evaluation. . 2. Demonstration of safety, efficacy,

and cost effectiveness

a. Clinical trials

b. Assure efficacy and safety of

drugs and devices

c. Provide economic analyses

d. Evaluate social, ethical, and

political impacts

Regulation . 3. Diffusion

Financing . . 4. Widespread use

● Support and planning of research

 Support and planning of research

● Test safety

● Test efficacy

● Protect human subjects

● Control of testing procedures

. Postmarketing surveillance

● Cost-benefit analysis

● Cost-effectiveness analysis

● Technology assessment

● Premarket approval of drugs and

devices

● Encourage distribution by

information dissemination

 Control distribution through CON,

review of purchase

● Assure appropriate use

● Monitor practice

. Reimbursement

● Define benefits package

● Set reimbursement levels

NIH, other small

NIH, other agencies and

programs

NIH, other small

FDA

NIH (limited)

NCHCT, NCHSR

FDA

NIH (limited)

HRA

PSRO certification programs

PSROs (limited)

Medicare (elderly)

Medicaid (poor)

CON = certificate of need. NCHSR = National Center for Health Services Research.

FDA = Food and Drug Administration NIH = National Institutes of Health

HRA = Health Resources Administration. PSRO = Professional Standards Review Organization.

NCHCT = National Center for Health Care Technology.

SOURCE: H. D Banta, 4’Publlc Policy and Medical Technology: Critical Issues Reconsidered,” presented at the conference ‘( POIICY Imnovatlon and the Service Sector,”

Berlln, West Germany, June 13-16, 1978.
health planning agencies has had approval zation program has had the authority since 1972

power over capital investments such as that re- to review medical services provided under the

quired to purchase a CT scanner. The medicare medicare and medicaid program for medical apand medicaid programs pay for CT scanning. propriateness. The impact of these policies and

And the Profession] Standards Review Organ i- programs is explored in succeeding chapters.
2 .

Number and Distribution

of CT Scanners
2 ●

Number and Distribution of CT Scanners

By May 1, 1980, there were 1,471 operational end of 1976, the number of operational scanners

scanners in the United States. This number of had increased to 475. Diffusion was even more

operational scanners has been rapidly attained rapid in 1977, when about 40 scanners were in-

(see figure 1). ’ At the end of 1974, only 45 scan- stalled per month. During 1978, however, the

ners were in operation. Two years later, at the rate of installation of scanners fell by nearly

half, In 1979 and the first 4 months of 1980, the

rate fell a little more, to about 17 scanners per

‘Based on data collected through April 1980. month.

Figure 1.— Cumulative Number of CT Scanners Installed (1973-80)

-

1,400 .

1,300 —

1,200 —

1,100 —

1,000 —

900 “

800 —

700 —

600 —

500 —

400 —

300 ‘

200 -

100

o

1973 74 75 76 77 78 79 1980

Year

SOURCE Off Ice of Technology Assessment
DIFFUSION OF’ MEDICAL TECHNOLOGY–

SOME GENERAL CONSIDERATIONS

The process by which a technology enters and

becomes part of the health care system is known

as diffusion. The diffusion of a technology

follows the stage of R&D and may or may not

occur following careful clinical trials to demonstrate efficacy and safety. Descriptive research has shown that the diffusion process for

any technology usually follows an S-shaped or

sigmoid curve, relating the percentage of potential adopters to actual adopters (see figure 2).

Generally, there is an early phase of diffusion

that is somewhat slower. This has been interpreted as indicating caution on the part of users

(145), although it could also indicate problems

of communication of information about the innovation (126). As experience indicates that the

technology does indeed have some benefit, acceptance increases. Finally, when most potential

adopters have accepted the innovation, diffusion slows and the curve flattens. Although

most of the work demonstrating the S-shaped

diffusion curve is outside the health care area,

this curve has been documented for such medical technologies as intensive care units (1.46),

cardiac pacemakers (126), respiratory therapy

(146), diagnostic radioisotope facilities (1.46),

and electroencephalographs (146).

The diffusion of medical technologies does

not always follow the sigmoid curve. One major

departure from this model occurs when diffusion reaches a high rate almost immediately

SOURCE Off Ice of Techology Assessment, U S Congress, Deve/oprnerr/ o/ Med/ca/ Techrro/ogY Opporfurr/f/es for Assessment (Washington, D C Government

Prlntlng Off Ice, August 1976)
after the technology becomes available (see

figure 3). This pattern has been referred to as the

“desperation-reaction model” (182). A first

phase of rapid diffusion seems to occur because

of the provider’s sense of responsibility to help

the patient and their mutual desperation. Later,

results of clinical tests and experience begin to

influence the physician’s behavior. If results of

tests are positive, diffusion may continue rapidly. If the evidence is not clear cut, there may be

caution and slow diffusion. If the evidence

seems negative, use of the technology gradually

declines.

Figure 3.— Diffusion of Chemotherapy for Leukemia

I I

SOURCE K Warner, “A ‘Desperation-React!on’ Model of Medical Dlffuslon,”

Healfh Serv/ce Research 10369, 1975. Redrawn by the Off Ice of

Technology Assessment

Whatever its initial pattern of diffusion, a

technology may eventually be partially or completely abandoned. The rate of tonsillectomy

(surgical removal of the tonsils), for example, is

presently declining (119). Such a decrease in use

can result from additional knowledge or the introduction of a more effective technology. The

introduction of polio vaccine, for example,

almost overnight entirely supplanted the costly

halfway technology of rehabilitation centers

(176).

Little work has been done on the diffusion of

specific medical technologies, but some comparisons can be made. Intensive care is an expensive technology that had its most rapid spread in

U.S. hospitals from 1960 to 1968. The most rapid diffusion rate was slightly over 200 per year,

or less than 20 per month (146). Another technology, nuclear medicine, spread at the rate of

almost 200 facilities per year during the period

1969 to 1972 (141), As noted above, the diffusion of CT scanners was considerably more

rapid than the diffusion of either of these two

technologies. The more rapid diffusion of CT

scanners could be due in part to the change in

reimbursement policies since the 1960’s.

Technologies have been observed to diffuse

most rapidly among large hospitals (146). Early

diffusion to hospitals affiliated with medical

schools was observed for intensive care (146)

and nuclear medicine (141). Cromwell, et al.

(39), however, found that when size and longterm debt were held constant, medical school affiliation had little effect on equipment expenditures. These investigators also showed that

technologies diffuse more rapidly as the percentage of hospital resources from third parties increases. As seen below, except for its rapidity,

the diffusion of CT scanners generally follows

the pattern predicted by previous research.

The sections that follow give detailed information on the diffusion and present distribution

of CT scanners.
DISTRIBUTION OF OPERATIONAL SCANNERS2

Geographic Distribution

Table 2 summarizes information

tion of scanners by State. All States

one scanner. There are no scanners

Samoa, Guam, the Trust Territory

tion. States with high scanner-to-population

ratios include Nevada (12.8), Florida (10.9),

on the loca- California (10.5), Missouri (9.4), North Dakota

have at least (9.1), Arizona (9.0), Nebraska (8.3), and New

in American Mexico (8.0). States with the lowest scanner-toof the Mari- population ratios include South Carolina (2.4),

ana Islands, or the Virgin Islands. The national Rhode Island (3.3), Idaho (3.3), Delaware (3.4),

average is now about 6.7 scanners per million Michigan (3.6), New Jersey (3,7), Kentucky

population. Washington, D. C., has the highest (3.7), and Montana (3.8). Puerto Rico has only

ratio, with 16.7 scanners per million popula- about 1.6 scanners per million population.

Table 3 shows that a ranking of States according

to scanner-per-population ratios changed little

‘Numbers In this paper may dltfcr tr-om those ]n the 1978 O T A

report on CT w~nners becdu~ e they include ackiltl<~nal scanners with the addition of new scanners between Feb-

[den t I t ICLi, replclcemen t+, d nci \LI on. ruary 1979 and May 1980.

Table 2.— Distribution of CT Scanners by Region and State (May 1980)

Region and State

New England. . . . . . .

Maine. . . . . . . .

New Hampshire ... ... ...

Vermont. . . . . . . . . . . . . . . .

Massachusetts. . . . . . . ... ., . . . .

Rhode Island. ... ... . . ... .

Connecticut . . . . . . . . . . . . . .

Middle Atlantic . . . . . . . . ... .,

New York. ... . . . ... ., . . . . .,

New Jersey . . . . . . . . . . . . . . . . . . . . .

Pennsylvania, ... ... ... . . ...

East North Central . .

Ohio . . . . . . . . . . . ... ... ...

Indiana. . . . . . ., ., ... . . . . .

Illinois . . . . . . . . ... ... . . . . . . .

Michigan . . . . . . . . . . . . . . . . ., . . .

Wisconsin . . . . ... ... ... . . .

West North Central . . . . . . . . . . .

Minnesota. ... . . . . . .,

Iowa ..... . . . . . . . . . . .

Missouri . . . . . . . . . . . . . . . . . . . .

North Dakota. . . . . . . . .

South Dakota . . . . . . . . . . . . . .

Nebraska . . . . . . . . .

Kansas . . . . . . . . . . . . . . . . . . . . . .

South Atlantic ......., ... . . . . . . . . .

Delaware . ., ...... . . . . . . . . . . .

Maryland . . . . . . . . . . . . . . . . . . . . .

District of Columbia . . . . . . .

Virginia . . . . . . . . . . . . . . . . . . . .

West Virginia . . . . . . . . . . . .

North Carolina . . . . . . . . . . . .

South Carolina . . . . . . . . . . . . . .

Georgia . ... . . . . . ... ... . .

Florida . . . . . . ... ... . ... .
Table 2.—Distribution of CT Scanners by Region and State (May 1980)–continued

Region and State

East South Central ...,

Kentucky, . . . . ..., ..., ..., ...,

Tennessee. ..., ..., . . . . . . .

Alabama ., ..., ..., ...,

Mississippi ., ., ..., ..., ..., . . .

West South Central . . . . . . . . . . . . . . . . . . . . .

Arkansas . . . . . . . . . . . . . . . .

Louisiana . . . . . . . . . . . . . . . . . . . . .

Oklahoma . . . . .

Texas . . . . . . . . . . . . . . . . . .

Mountain . . . . . . . . . . . . . . . . . . . . .

Montana . . . . . .

Idaho . . . . . . . . . . .

Wyoming. . ., . . . . . . . . . . ...,

Colorado . . . . . . . . . . . .

New Mexico . . . . . . . . . . . . . . . . . . . . . . . . . .

Arizona . . . . . . . . . . . . . . . . . . . . . . . . .

Utah. . . . . . . . . . . . . . . . . . . . . . . . . . .

Nevada. . . . . . . . . . . . . . . . . . . . .

Pacific. . . . . . . . ..., . . . . ...,

Washington. . . . . . . . . ...,

Oregon. . . . . . . . . . . . .

California. . . ., . . . . . . . .

Alaska . . . . . . . . ..., ..., .

Hawaii ., . . . . . ..., . . ..., ..., . . . . .

Puerto Rico. . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . .

Total scanners in the United States ..., . . . .

aPopulatlon datawereobtalned from the U S Bureau of the Census

b[nclud[ng I mOblle scanner

Clncludlng 2 mobde scanners

Number of CT scanners Number of CT scanners per million populationa

Hospital Hospital Office Total

67 6

11 2 3.1 0.6 3.7

24 3 5.5 0.7 6.2

22 0 5.8 — 5.8

10 1 4.1 — 4.1

126 1

9 1 4.1 0.5 4.6

2 5

b

3 6.2 0.7 6.9

15 0 5.2 . 5.2

77 25 5.8 1.9 7,7

62 14

3 0 3.8 — 3.8

3 0 3.3 — 3.3

2 0 4,4 — 4,4

17 3 6.1 1.1 7,2

5 5 4.0 4.0 8.0

I 8

b

4 7.3 1.6 9.0

6 1 4.4 0.7 5.1

8 1 11.4 1,4 12.8

239 54

19 11 4.8 2.8 7.6

16 0 6.3 — 6.3

196e

43 8.6 1,9 10.5

3 0 7.4 — 7.4

5 0 5.5 — 5.5

2 3 0.6 1.0 1.6 —

1’, 193 2 7 8 5.4 1.3 6 . 7 —

1,471 6.7 -

The ratio of scanners per million population

is often used as a standard by which to compare

scanner availability in the United States to scanner availability in other countries. Table 4 gives

the number of CT scanners in the United States

and in a number of other industrialized countries early in 1979. It seems apparent from these

data, and from other sources, that the United

States at present has the greatest number of CT

scanners of any country in the world. This information is not easy to interpret, however,

because the appropriate number of scanners is

not known. One also needs to consider that the

United States has, in addition to scanners, the

greatest amount of other diagnostic technologies such as conventional X-ray (120) and a

large number of surgeons per capita in comparison to such countries as Canada and the United

Kingdom (28,178).

dlncludlng 3 scanners at [he National Institutes of Health If they are removed

from the totals, Maryland has 58 scanners per mll I on population

elncludlng 8 mobile scanners

Within the United States, the ratio of scanners

per million population is often used as an indicator of relative geographic maldistribution

from State to State, as the discussion above illustrates. The ratio is inadequate as an indicator

of relative access, however, because it does not

incorporate the geographic dimension of access.

The ranking of States by number of square miles

is shown in the last column of table 3. It is striking that the 10 States with the highest scannerto-population ratios are all relatively large

States characterized by relatively low population densities. Several of these States are further

characterized as mostly rural, so their population may be expected to be dispersed over the

State.

The point to be made is that both population

and geography are essential factors to consider
Table 3.—Ranking of States by CT Scanners per Million Population as of February 1979 and May 1980

States (ranked by May May 1980 ratio of February 1979 ratio of State ranking based on

1980 ratio of scanners/ scanners/miIIion scanners/million 1979 ratio of scanners/ State ranking based on

million population) population population million population size in square miles

1. Nevada. . . . . . . . . . . .

2. Florida . . . . . . . . . . . .

3. California. . . . . . . . . .

4. Missouri. . . . . . . . . . .

5. North Dakota. . . . . . .

6. Arizona. . . . . . . . . . . .

7. Nebraska. . . . . . . . . .

8. New Mexico. . . . . . . .

9. Texas . . . . . . . . . . . . .

10. Georgia . . . . . . . . . . .

11. South Carolina . . . . .

12. Washington. . . . . . . .

13. Alaska . . . . . . . . . . . .

14. Colorado . . . . . . . . . .

15. Illinois . . . . . . . . . . . .

16. Louisiana. . . . . . . . . .

17. Maryland . . . . . . . . . .

18. Oregon. . . . . . . . . . . .

19. Pennsylvania. . . . . . .

20. Tennessee. . . . . . . . .

21. Virginia . . . . . . . . . . .

22. Iowa . . . . . . . . . . . . . .

23. Kansas. . . . . . . . . . . .

24. New York. . . . . . . . . .

25. Alabama. . . . . . . . . . .

26. Ohio . . . . . . . . . . . . . .

27. Minnesota . . . . . . . . .

28. North Carolina . . . . .

29. Hawaii . . . . . . . . . . . .

30. Indiana. . . . . . . . . . . .

31. Wisconsin . . . . . . . . .

32. Massachusetts. . . . .

33. West Virginia. . . . . . .

34. Oklahoma . . . . . . . . .

35. Utah . . . . . . . . . . . . . .

36. New Hampshire . . . .

37. Arkansas . . . . . . . . . .

38. Maine. . . . . . . . . . . . .

39. Vermont. . . . . . . . . . .

40. South Dakota . . . . . .

41. Wyoming . . . . . . . . . .

42. Connecticut . . . . . . .

43. Mississippi . . . . . . . .

44. Kentucky . . . . . . . . . .

45. New Jersey . . . . . . . .

46. Michigan . . . . . . . . . .

47. Delaware . . . . . . . . . .

48. Idaho . . . . . . . . . . . . .

49. Rhode Island. . . . . . .

50. Montana. . . . . . . . . . .

12.8

10.9

10.5

9.4

9.1

9.0

8.3

8.0

7.7

7.6

7.6

7.6

7.4

7.2

7.1

6.9

6.5

6.3

6.2

6.2

6.2

5.9

5.9

5.9

5.8

5.8

5.7

5.7

5.5

5.5

5.5

5.4

5.3

5.2

5.1

4.7

4.6

4.6

4.6

4.4

4.4

4.2

4.1

3.7

3.7

3.6

3.4

3.3

3.3

3.0

12.8

10.3

9.8

8.3

7.7

7.8

8.3

4.2

6.3

7.5

2.1

6.3

7.4

7.2

6.0

5.6

6.3

5.2

4.5

6.0

4.5

4.2

4.7

4.8

4.9

4.4

6.0

4.9

4.5

5.3

5.2

3.6

4.3

4.6

5.1

4.7

4.2

3.6

4.2

4.4

2.5

3.6

3.3

3.2

2.6

3.4

3.4

5.8

2.2

3.0

1

2

3

4

7

6

5

37

12

8

50

13

9

10

14

18

11

20

30

16

31

36

26

25

23

32

15

24

29

19

21

41

34

28

22

27

35

40

38

33

48

39

44

45

47

43

42

17

49

46

7

22

3

19

17

6

15

5

2

21

40

20

1

8

24

31

41

10

33

34

36

25

14

30

29

35

12

28

47

38

36

45

42

18

11

44

27

39

43

16

9

48

32

37

46

23

49

13

50

4

SOURCE. Office of Technology Assessment.

in determining access, This is of particular im- availability of CT scanners in the largest State,

portance when making comparisons of access Alaska, and the smallest, Rhode Island. 130th

between States or countries. An intuitive appre- States have three scanners, but Alaska has 7.4

ciation of the relationship between population scanners per million population while Rhode Isand geography is illustrated by comparing the land has only 2.2. Few would infer from this in-
Table 4.— Distribution of Installed CT Scanners in 10 Countries (1978 and 1979)

March 1978

-.

1979

Scanners

Number of scanners per million

Country a Head Body Total population

United States. . . . 3 3 7 668 1,005 4.6

Japan ., . . . . . . . 180 112 292 2.6

West Germany . 51 42 93 1.5

Australia. . . . . . . . . . u u u u

Canada. . . . . . . . . . . . u u u u

Sweden. . . . . . . . . . 8 5 13 1.6

Netherland s

b 

. u u u u

United Kingdom ., 36 16 52 0.9

France c. . . . . . . . . . 10 2 12 0.2

Iceland . . . . . . . . . . . 0 0 0 0.0

Number of scanners

Head Body Total

400 854 1,254

304 212 516

u u 160

7 21 28

9 29 38

8 6 14

u u 20

39 18 57

20 10 30

0 0 0

Scanners

per million

population

5.7 (Feb.)

4.6 (Apr.)

2.6 (July)

1.9 (Jan.)

1.7 (May)

1.7 (Feb.)

1.4 (Jan.)

1.0 (Jan.)

0.6 (Jan.)

0.0 (Jan.)

Key to symbols U = Unknown

aRanked by scanners per m(ll(Ofl popu[atlofl In 1979

bThe Netherlands has planned to Install 30 head scanners and 8 body scanners

Cln France an additional 21 scanners were authorized {n JulY 1979

SOURCE Reprinted from reference 128 Data sources can be found there

formation, however, that Alaskans have better

access to scanners (according to geographic

availability) than Rhode Islanders. On the other

hand, the population of Rhode Island is almost

twice that of Alaska. Consequently, its greater

population density implies that access may be

greater in the geographic sense, but less in terms

of the greater population served.

OTA suggests consideration, therefore, of an

alternative index of scanner availability that

would incorporate the geographic dimension of

access. The index is based on the index used to

compare physician availability for any designated unit of analysis (124). The unit of

analysis that would be most appropriate in this

case would be individual health services areas. 3

First, a ratio of the number of scanners in a

health service area to the number of scanners in

the entire United States would be computed.

Next, a ratio of the population density (persons

per square mile) of the health services area to

the population densit y of the United States

would be determined. The availability index of

the geographic unit of analysis would be the

weighted average of the ratio between the first

ratio and the second. This index would have the

advantage of incorporating the relative impacts

of geographic effects and population effects on

access. The calculation of such an index would

‘Health xr~lce areas are the ge<)ptllltlcal areas served by correspondtn~ health systems a~encles ( HSAS ).

not give a clear indication of what appropriate

access should be, since the only point of reference would be the national average. Although

this index would not be the ideal indicator,

given the data currently available, it would be

an improved indicator to use in discussions of

comparative accessibility.

In terms of health service areas, the distribution of scanners has improved. In 1979, there

were 16 health service areas with no CT scanners, but now there are only 3. Table 5 shows

the number and type of CT scanner (head or

body) by health service area of May 1980. Although health service areas are smaller units

than States, and therefore give a better sense of

geographic distribution, some encompass the

entire State. However, the ratio of scanners to

population still varies greatly from one health

service area to another.

Institutional Distribution

In May 1980, 18.9 percent of the 1,471 operational scanners were in private offices and

clinics: This is very close to the figure of 19 percent observed in the May 1977 data presented in

the original OTA CT report (129). Table 2

shows the number of scanners in noninstitutional settings by State. More importantly, table

2 also shows the ratio of private office scanners

to population. States with high ratios include

New Mexico, with 4.0 scanners per million per-
Table 5.— Number of CT Head and Body Scanners by Health Service Areas (May 1980)

Health service area (by number)

State

-

1 2 3 4 5 6 7 8 9 10 11 12 13- 14 Total

2B 1B 6B 2B 4B 2B ●

Alabama . ... . . . . . 2H 1H 2H —

I 2B 1B I

I

I I

Alaska. ., ... . . . . . . . . .

Arizon a

Arkansas . ..., ... ,

California. , ..., .

Colorado . . . . . . .

Connecticut, ., ., ..., . . .

Delaware. . ...,

District of Columbi a

Florida ..., ..., ...,

Georgia . . . . . . ..., ..., ...,

Hawaii. ..., . . . . . ...,

Idaho, . . .

Illinois. . . . . . .

Indiana. . ..., ...,

Iowa . . . . . . . . . . . . . . . . .

Kansas . . . . . . . . . . . .., ....,

Kentucky . . . . . . . . . . . . . . . .

Louisiana ..,...... . .

Maine ..., ..., . . . . . . . . . . .

Maryland.... .. .

Massachusetts . . . . . ...,

Michigan. . .

Minnesota . . . . . . . . . . . . . . . . .

Mississippi. . . . . . . . ..., .,..

Missouri . . . . . . .

Montana. . ... . . . . .

Nebraska . . . . . . . . . . . . . . . ,.

Nevada, . . . . . . . . . . . . .

New Hampshire. ...., ..., . .

New Jersey. . . . . . . . . . . . . . .
Table 5.— Number of CT Head and Body Scanners by Health Service Areas (May 1980)–continued

SOURCE Office of Technology Assessment

sons, Florida (3.0), Washington (2.8), New

York (2.4), and Vermont (2.3). A number of

States have no private office scanners.

The proportion of scanners located in private

offices versus hospitals raises concern over the

issue of access. Data on the hospitals by type

and size do little to assuage this concern. Tables

6 and 7 present data on the distribution of CT

scanners by type of facility and for short-term,

general community hospitals, by size of hospital. Of a total of 5,881 short-term general hospitals (12), 1,01.5 or 17.3 percent have CT scanners. As shown in table 7, 361 hospitals, or 35.6
Table 6.—Distribution of CT Scanners by Type of Facility (May 1980)

Facilities with CT scanners

Percentage

Type of facility Number of total

All hospitals. . . . . . . . . . . . . . . . 1,041 78.7%

Community hospitals . . . . . (1,015) (76.7)

Other short-term hospitalsb. (26) (1.9)

Mobile scanners . . . . . . . . . . . . 18 1.4

Office and clinics . . . . . . . . . . . 264 19.9

Total . . . . . . . . . . . . . . . . . . . 1,323 1OO.OO

/O

1,175 79.9%

(1,147) (77.9)

(28) (1.9)

18 1.2

278 18.9

1,471 100.0%

alncl udes pror, rletary, public, and voluntary community hospitals

blncludes 17 VA hospttals and 8 armed forces hoswtals

SOURCE Of fl(:e of Technology Assessment and Amertcan Hospital Association

Table 7.—Distribution of CT Scanners in Community Hospitals”

by Hospital Size (May 1980)

All hospitals Hospitals with CT scanners

Percentage Percentage Number of

Size of hospital Number of total Number of total CT scanners

O- 99 beds. . 2,833 48.20/0 14 0.5 % 14

100-199 beds. . 1,401 23.8 129 9.2 133

200-299 beds. . 713 12.1 218 30.6 225

300-399 beds. . 380 6.5 220 57.9 228

400-499 beds . . 243 4.1 170 70.0 187

500 and over . . 311 5.3 264 84.9 360

Total. . . . . . 5,881 100.0% 1,015 1 7.3=X. ‘1 ,147

alnc ludes proprietary, public, and VOIU ntary hospitals Does not Include federally surworted hospitals

SOURCE Office of Technology Assessment and American Hospital Assoclatlon

percent of the total community hospitals having

CT scanners, are less than 300 beds in size.

Of the total short-term general hospitals,

1,832 are supported by State and local governments, and only 161, or 8.8 percent, have CT

scanners. When size is taken into consideration,

this point becomes even more striking. A shortterm general hospital with 500 beds or more is

almost certain to have an active emergency

room, a neurosurgery service, and other specialized and acute care services that virtually require a CT scanner for the provision of appropriate care. But of the 47 local-government-supported community hospitals of at least 500 beds,

only 32 have CT scanners. New York City alone

has six such hospitals with no CT scanner.

These include Bellevue Hospital (1,258 beds), 4

Harlem Hospital Center (884 beds), Metropolitan Hospital (754 beds), and the City Hospital

—

4Money is currently budgeted for a scanner for Bellevue Hospital.

of Elmhurst (816 beds). Other important public

hospitals in the United States without CT scanners include Cook County Hospital in Chicago

(1,326 beds), D.C. General Hospital in Washington, D. C. (600 beds), and San Juan Municipal Hospital in San Juan, Puerto Rico (687

beds). Not only are the patients of these hospitals poor, but they are often members of

minority groups.

The problems related to the distribution of

CT scanners in hospitals are not confined to

those in urban ghettos. The Department of Defense and the Veterans Administration (VA)

operate large hospital systems. Although these

hospitals do not run the busy emergency rooms

of the urban public hospitals, they do serve

large populations. Only 17 of 171 VA hospitals

and 8 of 135 armed forces hospitals currently

have CT scanners. There are 44 VA hospitals

across the country with 500 beds or more that

have no CT scanner. (The average bed size of

this group of VA hospitals is over 800 beds. )
There is 1 armed forces hospital of over 500

beds with no scanner. (See app. C for more

details on the VA and armed forces’ policies

toward CT scanners. )

As shown in table 7, 84.9 percent of shortterm general hospitals of over 500 beds now

have at least 1 CT scanner; 264 such hospitals

have 360 scanners. Thus, there is a fair proportion of community hospitals with more than one

scanner. This category is comprised of several

types of hospitals including voluntary, public,

and proprietary. Most of the community hospitals with CT scanners are voluntary. The

category of public hospitals includes hospitals

supported at the level of hospital district, city,

county, and State governments, but excludes

federally supported hospitals. Of the State-supported hospitals with over 500 beds that have

CT scanners, all but one are affiliated with the

State university. This reflects the concentration

of diffusion of CT scanners in hospitals affiliated with virtually all medical schools in the

country. However, not all university teaching

hospitals are large, and some major ones lack a

CT scanner (e.g., Beth Israel in Boston).

The plight of local-government-operated

hospitals has already been discussed above. The

case of proprietary hospitals also illustrates inequity in distribution of CT scanners. There are

a total of 81 such institutions with CT scanners.

In general, proprietary hospitals tend to be

smaller, in terms of bed size, than other community hospitals. Of the 80 proprietary hospitals with scanners, 40 have less than 200 beds.

In total, there are 97 hospitals of all types

with 500 beds or more which are still without a

CT scanner. The 44 VA hospitals constitute

almost half of these, or 45.4 percent. The 15

large, publicly supported urban hospitals and 1

military hospital discussed above comprise

another 16.5 percent, and the remaining 36

hospitals, or 40.3 percent, are “private” community hospitals, including voluntary and proprietary hospitals. 5 There are, then, 51 community hospitals of 500 beds or more without

‘The discrepancy of two hospitals from the data in table 6 is due

to the fact that two large hospital systems were counted as one

hos.pltal each In the American Hospital Association data, In OTA’s

analysis, the scanners were Ilsted under individual hospitals.

scanners, which account for the 16.5 percent of

all hospitals of that type and size that are still

without CT scanners. b

Based on these data, a seemingly clear case of

maldistribution of scanners within the category

of hospital settings emerges. It is not clear,

however, which type and size of hospital may

derive the greatest benefit from having a CT

scanner. Modest evidence from a new study suggests that scanners may have a greater diagnostic and therapeutic impact in a public university-affiliated hospital than in a private medical

center with a similar affiliation (14). Yet it is

these hospitals for whom the economic and

technical support a scanner requires may be less

feasible.

The capital expenditures and technical support required may prohibit the hospital of less

than 200 or 300 beds from installing a scanner.

Table 7, showing the proportion of community

hospitals by bed size and the proportion of each

of these groups that has a CT scanner, would

lend support to this hypothesis.

This analysis of type of setting, and type and

size of hospital, suggests another issue besides

that of institutional distribution of scanners:

The commercial market for CT scanners, at

least in voluntary community hospitals of appreciable size (500 beds), may be approaching

saturation. Such a conclusion, however, is subject to the qualification of type and generation

of scanner being considered. Thus far, in discussing the diffusion and distribution of scanners, the technical capabilities (beyond those

indicated by dedicated head v. total body CT

units) of scanners have not been explicitly considered. Clearly, any statements regarding saturation of the market are a function of the fact

that these facilities merely have a CT scanner—

not that they have the CT scanner of a type that

they might need or desire. One outcome of the

“rush” for scanners in 1975 was that a great

many hospitals purchased scanners representing

the state of the art of CT technology at that

time—typically an early head scanner. Since

that time, improvements in scanning speed and

“There is also one Public Health Service hospital not included in

these figures that has .500 beds but lacks a CT scanner.
20 ● Policy Implications of the Computed Tomography (CT) Scanner: An Update

image resolution, as well as the potential to

reduce radiation exposure to patients, have occurred in successive models of scanners, creating a concomitant demand for these new stateof-the-art CT scanners,

In considering the question of whether health

planning policies have influenced diffusion,

either in terms of the aggregate number of scanners, the rate of purchase, and/or market saturation (as qualified above), the concomitant effects of the distribution and technical capability

of existing operational scanners have been ignored. The focus on whether these policies have

been effective in either limiting diffusion or promoting market saturation reflects concern for

only one of the two objectives of the health

planning laws— the containment of costs. But if,

in the attempt to control diffusion, the law and

related regulation can be shown to have effected

an inequitable distribution of medical technology that is inadequate for the needs of various

health care providers, then they have failed to

assure the second objective—namely, ensuring

access to and quality of care. Perhaps more important is the issue of whether existing health

planning policies will be able to redress distributional inequities and resolve problems related to

appropriate technology in the future (see ch. 3).

TRENDS IN THE TYPE AND MANUFACTURE OF SCANNERS

The CT scanner market has undergone dramatic changes since EMI, Ltd., developed the

first commercial head scanner in the early

1970’s. By May 1980, there was a striking

change in type of scanner being sold (see table

8). Only slightly more than half of the EMI

scanners are now head scanners, compared to

92 percent of the EMI scanners installed as of

May 1977, Body scanners have increased their

domination of the market, and by May 1980, almost 69 percent of operational scanners were

body scanners. During the 24 months from January 1978 through December 1979, however,

Ohio-Nuclear installed 83 head scanners.7

Since the sale of the first scanner in this country by EMI in 1972, the CT market has undergone “see-saw” changes in both the number of

companies manufacturing CT equipment and in

7Comparison with FDA data on scanners reported installed indicates that a good portion of these wt>re the new lower priced scanners.

Table 8.—Manufacturers of CT Head and Body Scanners in Use (May 1980)

Head scanners Body scanners Total scanners

Percentage Percentage Percentage

Manufacturer Number of total Number of total Number of total

EMI, Ltd.. . . . . . . . . . . . . . . . . . . 284 61 .60/0 267 26,40/. 551 37.5%

Ohio-Nuclear . . . . . . . . . . . . . . . 109 23.6 309 30.6 418 28.4

General Electric. . . . . . . . . . . . . 16 3.5 221 21.8 237 16.1

Pfizer. . . . . . . . . . . . . . . . . . . . . . — — 107 10.6 107

Artronix . . . . . . . . . . . . . . . . . . .

7

28

.3

6.1 4 0.4 32

Syntex. . . . . . . . . . . . . . . . . . . . .

2.2

11 2.4 17 1.7 28 1.9

Picker . . . . . . . . . . . . . . . . . . . . . — — 22 2.2 22 1.5

Elscint . . . . . . . . . . . . . . . . . . . . — — 13 1.3 13 0.9

Varian . . . . . . . . . . . . . . . . . . . . — — 16 1.6 16 1.1

AS&E. . . . . . . . . . . . . . . . . . . . . – — 11 1.1 11 0.7

Philips. . . . . . . . . . . . . . . . . . . . — — 10 1.0 10 0.7

Omni. . . . . . . . . . . . . . . . . . . . . 9 1.9 — 9 0.6

Other a. . . . . . . . . . . . . . . . . . . .

—

3 0.6 14 1.4 17 1.2

Total . . . . . . . . . . . . . . . . . . . . 460 100.0% 1,011 100.0% 1,471 100.0%

aTflree Companies— Neuroscan, Sle Tens, and cGR

SOURCE Off Ice of Technology Assessment
Ch. 2—Number and Distribution of CT Scanners ● 21

their respective shares of the CT market. EMI

dominated the American (and world) market

through mid-1975 (see figure 4). Although six

other companies were marketing CT scanners in

the United States by May of 1977, EMI still had

sold almost 60 percent of all operational scanners at that time.

However, the rapidly increasing number of

new companies entering the market, as well as

the new generations of scanners they introduced

to the commercial marketplace, brought about

some abrupt changes in the share of the market

controlled by early manufacturers. By March

1978, there were 15 companies worldwide that

had CT scanners in operation: Only 4 of these

(EMI, Pfizer, General Electric (GE), and Siemens) had ever manufactured a rotate and

translate, dual-detection scanner; 7 more of

these (Philips, Elscint, Picker, Ohio-Nuclear,

Syntex, Hitachi, and CGR) had entered the market with a rotate and translate, multiple detection scanner; and 4 more (Varian, Artronix,

Searle, and American Science and Engineering

(AS&E)) had entered with a rotate-only scanner

(see table B-3 in app. B) (65,120).

The most dramatic change in the U.S. market

share occurred in 1977 with the sharp increase in

the number of scanners installed by GE. This is

primarily attributable, not to expansionary

market trends, but to GE’s introduction of its

new rotate-only scanner (which had been pioneered by that company) to the commercial

market. Both GE and Ohio-Nuclear expanded

their share of the market during 1978, so that by

1979, EMI’s share had fallen to 40 percent of

operational scanners. By 1980, EMI’s share had

Figure 4.—Cumulative Number of CT Scanners Installed, by Manufacturer

1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0 L

Other

Ohio-Nuclear

1973 74 75 76 77 78 79 1980

Year

SOURCE Off Ice of Technology Assessment
been further reduced to about 37 percent. Figure

4 shows the changing relative market shares of

manufacturers, as measured by the proportion

of operational scanners in the United States,

over the past several years.

Another indicator of changing market shares

is worldwide sales of scanners. According to

one source, estimated 1979 sales yield a ranking

of manufacturers as follows: GE ($100 million),

Siemens ($50 million), Johnson & Johnson

(Ohio-Nuclear) ($45 million), both Picker and

Pfizer ($30 million), EMI ($15 million), Elscint

($l4 million), Philips ($10 million), and both

Toshiba and Hitachi ($5 million)8 (48). Naturally, different companies tend to be more successful in certain countries, usually their own or

contiguous countries. For example, Siemens, a

West German company, tends to dominate the

market in West Germany. Despite an early lead

by EMI, the Japanese companies are gaining

dominance in Japan. Siemens dominates in

Belgium, with CGR, a French company, having

major success as well. Other countries have a

larger spread of manufacturers, although EMI

tends to have larger percentages because of its

early domination of the market. GE is apparently the only U.S. company that has had significant success outside of the United States (33).

The precipitous decline in both the number of

scanners sold and in scanner sales in 1977 and

1978 marked the beginning of the end of previous expansionary market trends. As the first,

and for many years dominant, manufacturer of

CT scanners, EMI aptly illustrates the various

aspects of the troubled CT market over the past

few years, Following a $29.1 million profit for

the fiscal year of 1977 (115), the medical electronics division of EMI, including the CT

scanner business, incurred major losses in both

fiscal years 1978 ( – $28.7 million) and in 1979

( – $27.8 million) (172). In early 1979, it was

reported that EMI had begun to seek a merger of

its medical division with a U.S. company in

order to cushion these losses (31). In December

1979, EMI was acquired by Thorn Electrical Industries, Ltd., of Great Britain, but in April

1980, Thorn attempted to sell its newly acquired

—

“Data collected by U.S. ma lufacturers indicate that the estimate

for the Japanese companies is much too low.

EMI scanner interests with a sale to GE (26,165).

GE sought an advisory opinion from the U.S.

Department of Justice, however, and was informed that such a takeover would probably be

found to violate antitrust law. The upshot was

that GE only acquired EMI’s non-U. S. operations, leaving EMI’s U.S. operation in limbo. In

1977 and 1978, EMI initiated litigation against

Technicare of Ohio-Nuclear (45), Pfizer (113),

and GE (@I). The suits filed by EMI against these

companies sought damages for alleged infringements of its many patent rights on the CT scanner.9 Part of GE’s agreement in purchasing EMI

was the settlement of this patent litigation (26).

Further signs of the troubled CT scanner market are evident in the trend toward market consolidation as measured by the number of other

companies that have merged, are seeking to sell,

or have already sold their scanner interests. The

depressed state of the CT scanner market in

1978 is reflected by the fact that by the end of

that year, at least two companies (Searle and

Syntex) went out of the CT scanner business

(26,43); another (AS&E) sold its rights to

market and produce the scanner it had pioneered (to Pfizer) (42); and one of the leading

manufacturers of body scanners at that time

(Ohio-Nuclear) was acquired by the single

newcomer to the CT scanner market (Johnson &

Johnson) in 1978, (44). In 1979, Varian also put

its CT scanner division on the market, with the

intent of eliminating the divison if it could not

find a buyer (114). By October 1979, Neuroscan

was no longer making scanners, and Artronix

had notified the Food and Drug Administration

(FDA) that it would cease to market scanners

(90).

Thus since the beginning of 1978, eight companies, EMI, Searle, Syntex, AS&E, Ohio-Nuclear of Technicare, Varian, Neuroscan, and

Artronix, have left the CT market (in some

fashion), and only one, Johnson & Johnson, has

entered it. As of September 1979, there were 10

companies which still had CT scanners certified

as meeting FDA performance standards marketed in the United States (90): These included

‘ln a separate agreement with EMI, Johnson & Johnson agreed

to pay EMI $15 million to drop suit against Technicare of OhioNuclear (44).
GE (United States), Siemens (West Germany),

Johnson & Johnson (formerly Ohio-Nuclear,

United States), Picker (United States), Pfizer

(United States), EMI (Great Britain), Elscint

(Israel), Philips (Netherlands), CGR (France),

and Omni Medical (United States).

With the apparent exit of EMI in late 1979,

nine companies remain. Counting the three

Japanese companies (Shimadzu, Toshiba, and

Hitachi), there are now 12 companies worldwide still manufacturing CT scanners. It is

believed that the remaining market for scanners

will not support all of these companies,

however, and further consolidation is predicted

for the future (26).

Manufacturers have cited Federal interventions as the culprit behind the millions of dollars

lost on the CT scanner market over the last few

years. Specifically, this calamitous turn of

events has been blamed on the implementation

of the health planning laws enacted in 1974 and

on the consequent certificate-of-need (CON)

regulations imposed through local health systems agencies (HSAs) since 1976 (26,65). However, it is also true that the expansionary trends

exhibited in the mid-1970's could not continue

forever: The number of scanners that could

ultimately be sold was not limitless, and that

number could have been reached by far fewer

manufacturers than the number of manufacturers that rushed to share in profits such as

those EMI was realizing in 197510, In addition,

companies like EMI in 1976 which in 1976 faced

a backlog of 250 unfilled orders, had geared up

production capacities to meet the wildly escalating demand for scanners. Thus, it appears

that there may have been substantial overestimation of the potential market for scanners on

the part of manufacturers.

In the wake of this controversy, there have

also been modifications in marketing strategies,

‘“A. U.S. market estimate In 1975 prepared by Kidder, Peabody,

and Co., predicted that a total of 1,425 CT units would be in place

by the end of 1980. In fact, th]s number was probably attained by

the end ot 1979 (according to manufacturers’ sales data). In reporting the above projection, however, it IS interesting to note that the

author, cri tlcal of the lmpos,ltion of health planning measures in

1976, noted: “The growth curve was well on the way to reaching

that level ( 1425} until It encountered the Federal and State CON

laws that were Imposed” (65 ).

some of which appear to be in response to the

CON review process and specific regulations.

The advent of the new low-priced scanners, in

particular, has drawn the attention of policymakers. At least three companies have models

of a head scanner having a list price of less than

$200,2000 (49). Four of these models sell for less

than $l50,000, the threshold figure at which

CON approval is required for purchase. One

company has a body scanner whose purchase

price is less than $100,000, plus maintenance

costs (49). The interim regulations issued in

April 1979 by the Bureau of Health Planning

(BHP), however, have countered this particular

strategy as a means of skirting the purview of

CON review (see ch. 3).

According to FDA data on scanners reported

as installed between June 1978 and June 1979,

there were 39 scanners listed that sold for less

than $200,000 (95). Ohio-Nuclear has been particularly active in selling these scanners, having

sold 16 of the model 150 Delta-Scan head scanner that costs approximately $145,000 and 6 of

the model 110 Delta-Scan that is priced at

$96,500 (49). Omni Medical has also been active

in the promotion and sale of these scanners and

has reportedly concentrated its production in a

low-cost (sub-$l50,000) highly reliable cranial

CT scanner (40). The technical capabilities of

these scanners are more limited than those of the

more expensive and technically sophisticated

models, and this reduces their appeal to many

potential buyers. Still, these new lower priced

scanners avail themselves to a new market of

small hospitals and private offices (49).

Another strategy of some manufacturers has

been to upgrade and refurbish older scanners;

this includes modifying head scanners to body

units. Several of the “new” cheaper scanners are

actually older scanners that have been bought

back, or traded in on more advanced newer

equipment, and then refurbished by the manufacturers (90). EMI and Pfizer have both been

engaged in programs of updating older models

to the latest specifications. Generally, refurbishing can be done for less than $100,000. The

change in definition from CT scanning equipment to CT scanning services (again by virtue of

the April 1979 interim regulations issued by
BHP), however, means that changes such as

upgrading a head to a body machine are subject

to CON review (see ch. 3).

Another strategy manufacturers have used to

diversify their CT markets has been to install

scanners in a mobile environment. At least two

companies are now selling various models of

their scanners installed in special vehicles. According to OTA’s data, the number of mobile

scanners as of February 1979 had doubled, going from 7 to 14 in less than a year; by May of

1980, the number had increased further to 18.

For a while, the market potential for mobile

units appeared substantial, since these scanners

were not subject to CON review. It was also expected that medicare would soon begin to pay

for scans done on mobile scanners. In anticipation of that announcement by medicare,

however, mobile scanners were placed within

the purview of CON review (once again, under

the interim regulations issued by BHP in April

1979) (see ch. 3). Furthermore, when the announcement did come from medicare, the regulations for reimbursement stipulated that reimbursement would be made only for scans done

on CON-approved mobile scanners (85). Nonetheless, the number of mobile scanners seems

certain to increase. One company is now servicing the needs of 44 hospitals in southern

California for CT scanners (166), and that company reports to OTA that it expects to expand

its present stock of 21 operational scanners (as

of October 1980) by 1 to 11/2 per month. This

development is clearly to the advantage of the

smaller hospitals that cannot support a scanner

on their own, and it may well be an efficient

way to provide access to CT scanning services

(70). So far, however, Federal policy with respect to mobile scanners has been conservative,

and sharing has not been encouraged.

It would seem fair to conclude that manufacturers have attempted to place the blame for the

changes that have occurred in the CT scanner

market over the past 2 years on cost-conscious

Federal policies. Although it is unlikely that

these policies are solely to blame for the rather

abrupt turn of market events, it is clear that the

trend in Federal policies toward the CT scanner

market over the past 2 years has been one of increased restraint in a kind of “cat and mouse”

game with the manufacturers in the name of

cost containment. It would seem that Federal

policymakers and manufacturers alike could

benefit from taking a broader, more comparehensive view of the forces shaping these events,

and developing a more balanced appreciation of

the two objectives of ensuring access and quality care and containing costs. One of the forces,

research and development of existing and

emerging diagnostic imaging modalities with

which CT is competing (or will eventually compete) for a place in medical practice, is discussed

in appendix B. Federal policies toward CT scanners and changes in those policies since 1978 are

summarized in the next chapter,
3.

Changes in Federal Policies

Toward CT Scanners
3 ●

Changes in Federal Policies

Toward CT Scanners

This update of information presented in

OTA’s 1978 report on the computed tomography (CT) scanner (129) focuses on four areas of

Government policy: 1) research and development, 2) evaluation, 3) regulation, and 4) financing. Generally, the policies in these four

areas address issues characterizing the stages of

research, development, and demonstration of

efficacy and safety, diffusion, and widespread

use of medical technology, respectively. These

functions are performed largely by agencies and

programs within the Department of Health and

Human Services (DHHS), as shown in table 1 in

RESEARCH AND DEVELOPMENT

As previously stated, biomedical R&D has

been generously supported by Federal funds.

Nevertheless, Federal investment in the development of CT scanning was small. Because CT “is

well beyond the initial stage of development,

Federal support has now largely ended. The last

major CT project funded by the National Institutes of Health (NIH) ended in April 1978 (22).

It supported the development of a more technically advanced, ultrafast prototype scanner.

Basic R&D agendas at present reflect the pursuit

of alternative imaging techniques that promise

even greater technical capabilities than CT.

Such new technologies may eventually become

EVALUATION

The available efficacy information on CT

scanning in 1978, OTA found, was inadequate

for the purposes of planning agencies and other

organizations in need of such information (129).

Planning agencies, Professional Standards Rechapter 1. 12 The changes that have occurred in

these functions, programs, and agencies since

1978 are discussed below.

I Following the crea tlon of a separate Department oi Education,

the name of what was formerly the Department of Health, Educatlc~n, and ~~’elfare ( DHEF7’ ~ wa~ changed Ettectlve Nla} 4, 1 Q80,

the new name IS the Department t>t Health and Human Scrvlces

I DHHS)

‘OTA’s ~rl~lnal report ( 129) describes the involvement of nine

(~t her agenc]e+ (Jr departmcn t> CIU t +]de DH E\\r that were I n v<ll~’ed

I n w~me wav WI th CT \ca nn I n~. hl ~l~t ~verc c<>ncerned WI t h wicty

~nd radla tt(}n expo\LI re. Two ot these, the Lreterans Admlnlstra -

tl{~n and the Department (~t Detenw, purchaw <canners and pr(~-

vldc wrv Ice>. An update (~1 act I VI tws and po] ]c)e~ Of t hew I w()

a~enc]e~ 1> presented I n app. C-. tlt t h IS LI pda t c.

alternatives to, and may even surpass the capabilities of, CT scanning (122).

At this time, there are a number of new imaging techniques evolving that have present and

greater future clinical applications. These include ultrasound tomography, scintigraphy, dynamic and spatial reconstructive CT, and electronic recording. In addition, there are two new

techniques that will require considerable capital

investment: positron emission transaxial tomography scanning and nuclear magnetic resonance

scanning. The latter two applications are described in some detail in appendix B.

view Organizations (PSROs), and third-party

payers did not have the information they required to determine the need for scanners, appropriate standards of use, and appropriate indications for reimbursement, respectively. The

2 7
1978 report on the CT scanner (129) stated:

“The development and diffusion of CT scanners

occurred without formal and detailed proof of

their safety and efficacy . . . Nonetheless, by

1977, efficacy and safety have been more thoroughly assessed for CT scanning than for many

other medical technologies at a similar stage of

development and use. The evidence has not

come from well-designed, prospective clinical

trials, but as typical for medical technologies, it

has been obtained from analyses of clinical experience. ” This summary statement is still generally valid. The Federal Government must take

a large share of the blame for this situation. Federal investment in clinical trials of efficacy and

safety has been small (125).

As defined in the original CT report, efficacy

is more than a simple consideration of benefits.

No technology is beneficial in the absolute. It is

beneficial only when used in an appropriate

manner—for a defined population, for a given

medical problem, under certain conditions of

use, and for a specified outcome(s) (125). Determining efficacy thus becomes a matter of determining indications for use, stated in terms of all

four of these criteria. The task is a formidable

one.

For a diagnostic technology such as CT, evaluating these benefits can become very complicated, depending on the type of impact specified

(125). For example, should a diagnostic device

be evaluated for its impact on diagnosis, on

treatment, or on patient outcome (13,61)? Most

of the available evaluations of CT scanning are

limited to evaluations at the levels of technical

capability and diagnostic accuracy. Few address

diagnostic and therapeutic impacts. Fewer still

are available that attempt to determine efficacy

in terms of patient outcome (102,181,185,186).

The focus of research is often on the methods for

going about the task of evaluation (27,173,185).

There has been little Federal initiative to undertake or support such evaluation of efficacy of

CT scanning (60,181). Little information that indicates in a definitive way either appropriate

uses or the benefits of use beyond diagnostic accuracy has been forthcoming (32).

Available information regarding the efficacy

of CT scanning is much more conclusive for

head than for body scanning (92,93), and it is

generally acknowledged that efficacy is much

better established for the former (3). As yet,

there are insufficient numbers of adequate studies or patterns of use available to ascertain in

full the proper indications for CT body scanning

(167). However, it should be noted that body

scanners are able to perform head scans whose

quality is at least as good as that of head scanners. To the extent that a body scanner is used

to scan heads, its usefulness may be said to be

more firmly established.

There have been numerous evaluations enunciating the comparative benefits of CT and

other diagnostic modalities for specific clinical

indications in the case of head scanning (19) and

for certain anatomical regions in the case of

body scanning. CT of the head has been found

to perform favorably in comparison with several neurodiagnostic procedures and to have

partially supplanted the use of some of these (4).

Body scanning capabilities have most often been

compared to ultrasonography, but have not always been found to be decisively superior ( 1,2).

To a large extent, the inconclusive efficacy

status of body scanning is a function of the

many more possible clinical indications and

organs to which computed body tomography

may be applied, as well as the large number of

alternative imaging and other diagnostic technologies with which it must be compared (167).

In addition, any physician or institution has a

limited number of patients with a specific condition, and outcome data are generally lacking in

all medical care (125).

To complicate matters further, a more imporant question now emerging is when to use CT

scanning vis-a-vis other modalities rather than

whether or not to use it at all. Evaluations of efficacy that compare the benefits of applying one

technology to those of another for a given problem can provide information that will enable efficient, as well as efficacious, application for

these technologies (184). To this end, the objective of comparative evaluation should be not

only to determine whether one modality can

supplant or replace another, but also to determine whether, when, and how the modalities
might be used in a complementary way to

achieve even greater benefit and efficiency.

Even if there were available efficacy information for CT scanning that was complete according to the criteria of application, benefit,

relativity, and complementarily, the question

would remain as to whether planners, PSROs,

and third-party payers would then have the information they need to make decisions required

of them. The decisions made by planning agencies and PSROs should be in keeping with their

triple mandate to contain the cost of medical

care while simultaneously assuring quality and

access. For third-party payers, the availability

of even the best efficacy information may address only the problem of reimbursement for inefficacious procedures and technologies. The

important policy question is whether it is possible to encourage a choice between competing alternatives or develop methods to assure complementary uses of them based on diagnostic

superiority.

An idea gaining prominence is that the needs

of decisionmakers in these agencies and programs can be met by information from economic evaluations, perhaps in the form of costbenefit analyses (CBAs) or cost-effectiveness

analyses (CEAs). The momentum in the research community toward these formal analytic

techniques is based on the premise that the techniques of CEA/CBA can contribute to achieving

cost-containment objectives—an assumption

that may be untenable. Countering this optimism is a growing body of skepticism regarding the potential use and usefulness of these

economic analyses (127). Nevertheless, the new

National Center for Health Care Technology

(NCHCT) (see below) has a specific mandate to

develop such information.

Review of the cost impact literature of CT

scanning reveals a myriad of approaches to economic evaluation (20,50,51,54,55,89,187), few

of which offer real assistance to planners, utilization review groups, or third-party payers

faced with resource allocation decisions (180).

To date, the bulk of most economic evaluations

of CT have been analyses of costs of CT scanning only or of the impact of CT on diagnostic

costs (180). Still, CT scanning is probably the

medical technology which has been most often

subjected to economic evaluation, and specifically, to so- called CEA/CBA.

The difficulties in applying CEA/CBA to

medical technologies in general are well documented (127). But applications to diagnostic

technologies present even more difficult problems (183). In the application of CEA/CBA to

any technology, there are tremendous problems

in estimating both costs and benefits (or effects).

The ability to conduct the CEA/CBA is dependent on (among other things) the availability not

only of good cost estimates, but also of valid

efficacy studies which are the basis for quantitative estimates of benefits (183). This methodological role underscores the need to develop

scientifically based efficacy information. Lack

of such information greatly exacerbates the

methodological difficulties of any analyses attempting to rationally compare costs and outcomes. The inclusion of CEA in the mandate of

the new NCHCT is appropriate, but high expectations regarding its contribution to policy objectives may not be, owing both to a continued

lack of adequate efficacy and effectiveness information and to the other unanswered questions concerning the methodological validity of

the analyses themselves and their usefulness in

decisionmaking.

Despite these complications, well-designed

studies are possible. The relative paucity of

scientifically derived efficacy information persists, and repercussions continue to be felt by

the affected agencies and organizations. Some

changes along the lines of proposals contained

in OTA’s 1978 report regarding efficacy have

been made. The most promising of these is the

legislation authorizing NCHCT. Newly mandated by the Health Services Research, Health

Statistics, and Health Care Technology Act of

1978, 3 this fledgling organization has now been

in operation a little less than 2 years. The effects

of this organization lie in the future, however,

because staff and resources so far have been

limited.

The mandate of NCHCT is a broad one, relating in some fashion to most technology- —

3Health Serz~ ices Research, Health Statistics, a}~d Health Care

Tec-hnology Act of 1978 (Public Law 95-623).
related issues and activities within DHHS. As of

October 1979, CT scanners were 1 of 16 technologies on the NCHCT list of priorities for

assessment. One of NCHCT’s most important

authorities, however, is its responsibility to recommend to the Health Care Financing Administration (HCFA) what technologies should or

should not be reimbursed by the Federal Government. This determination is to be made primarily on the basis of available information regarding the safety and efficacy of the technology. This formal link between safety and efficacy information and reimbursement decisions

realizes one of the proposed options presented in

OTA’s original CT report (129) (see app. A).

In this advisory capacity, NCHCT formally

assumes the function previously served by the

now defunct Office of Health Practice Assessment (OHPA) in the Office of the Assistant

Secretary for Health (OASH). To date, the

limited staff and resources of the Center have

been primarily devoted to answering inquiries

from HCFA regarding these reimbursement decisions (177). However, NCHCT has a specific

mandate to develop information on efficacy,

safety, and cost effectiveness.

A second development relating to evaluation

efforts at a Federal level is the series of consensus development conferences being sponsored

by the Office for Medical Applications of Research of NIH. These meetings convene over a

particular technology or disease category and

attempt to reach a consensus judgment regarding efficacy and appropriate conditions of use.

These conferences provide a forum for bringing

together representatives of the academic and

practicing medical communities. The outcome

represents a consensus falling on a middle

ground between analyses of clinical practice and

scientifically derived evidence from clinical

trials of efficacy and safety. The first of these

conferences was held in September 1977. Altogether, 12 were held in 1977 and 1978, and 28

had been held by October 1980 (58). Both CT

head and body scanning are on the conference

agenda. The first consensus conference on CT

will focus on CT scanning of the central nervous

system and is scheduled to be held in 1981.

The consensus development conference

planned for CT scanning will be jointly sponsored by NCHCT and NIH. The Center’s responsibility will be to provide cost-effectiveness

information, while the responsibility of NIH

will be to provide the medical and technical

evidence. The conference on CT scanning will

be one of the first that will include costeffectiveness information (131). What sort of

cost information NCHCT will supply, however,

remains to be seen.

Because scientific evidence, clinical experience, and expert opinion regarding the use of

CT are fragmented, and because practitioners

and policy makers have had an immediate need

for efficacy information, various scientific organizations, professional medical societies, and

peer review groups have reviewed and weighed

the available evidence (see app. D). Several

have reached a consensus and issued formal

policy statements on appropriate applications of

CT in medical practice. For example, in 1977,

the Institute of Medicine (IOM) published a list

of indications for appropriate use of CT scanning of the head and body as part of a policy

statement (116). In July 1979, part of this list

was updated and augmented by the Society for

Computed Body Tomography (SCBT), which

published a list of indications for extracranial

(other than brain) applications of CT (164). In

September 1979, the American College of Radiology (ACR), the professional organization of

radiologists, issued a formal policy statement on

CT scanning which concluded that the diagnostic efficacy of CT is no longer in question and

cited six roles for CT scanning in medical practice (10,11). These roles were offered as a

general guide for use of CT, while the specific

clinical areas and indications for CT scanning

were left to be determined locally by hospital

medical staffs or other recognized peer review

groups. Also the Radiological Society of North

America held a convention in November 1979,

at which papers documenting new uses of CT in

clinical practice or reviewing evidence of established clinical uses were presented and discussed (134). These mechanisms are criticall y

important to the practicing medical community
in establishing the role and application of CT

scanning in medical practice.

It is critical to develop some form of information that addresses the issue of resource allocation underlying all policymaking. From the

planner’s perspective of allocating resources, the

important question is not simply whether the

procedure or the technology producing it is justified on the basis of its having some efficacy, or

even whether its introduction and use might

raise or lower total health care costs: It is how

the diagnostic capability should be used in the

practice of medicine (180), Only by being able

to identify which patients should receive a procedure during their treatment is one able to

know whether there is too little or too much CT

capacity to meet the needs of any community.

This requires balancing benefits and risks (125).

Similarly, evaluations of CT, whether economic

or some other type, should be able to address

the incentives toward excessive use that characterize current reimbursement policy. Present

methods of reimbursement decisionmaking promote the use of additional technologies and

procedures—not tradeoffs between them (184).

Evaluations that could identify when, if at all,

CT should be used in the diagnostic evaluation,

treatment, or monitoring of a given patient

could provide the necessary information to

enable reimbursement policy to encourage the

most efficient—as well as the most efficacious—

use of technologies in patient care.

REGULATION OF EFFICACY AND SAFETY

Somewhere between the policy areas of evaluation and regulation lie the medical devices

program and the radiation safety program administered by the Food and Drug Administration (FDA). At the time of OTA’s original CT

report (129), FDA regulated CT scanners to ensure minimum radiation exposure with an

equipment standard and it was beginning to implement the enabling Medical Devices Amendments of 1976.4 Under the Medical Devices

Amendments, CT will be categorized as a class

11 device, which means that CT scanners will be

required to meet specified technical performance standards. These standards have been

developed by the Bureau of Radiological Health

(BRH) within FDA. By virtue of an interbureau

agreement with the Bureau of Medical Devices,

BRH assumed the lead role in FDA for all

radiological devices as of April 1979 (18,189).

Safety of radiological devices is also regulated

by FDA through BRH, as described in OTA’s

1978 report (129). CT scanners became subject

to the 1974 performance standard that applied

to diagnostic X-ray equipment. Since 1976, BRH

has been in the process of developing amendments to the general X-ray performance standards to include criteria specific to CT scanners.

In March 1978 and October 1978, draft amendments were sent out for comment. The final

analysis of comments has been completed, and

final rules are expected to be published in 1981.

These amendments to the X-ray standard will

be the first performance standards written specifically for CT scanners. The amendments primarily address radiation safety of CT systems

and require information on the imaging performance and radiation dose to be provided to

purchasers (86). Image information from a

given CT system is proportional to the radiation

dose. With a particular CT system, slower scan

time results in both a higher radiation exposure,

as well as a better image. In addition, it is generally true that increased radiation provides

more image information.

The amount of radiation to which the patient

is exposed is partially dependent on how the

clinician using the scanner specifies certain

variables such as scan time. Usually this is determined by the clinician’s preference. There is

sometimes a tendency to opt for more image

information at the expense of a higher dose of

radiation (129). Another problem found was

that because of the complexity of CT equipment, there is potential (through suboptimal
performance) for obtaining a poor quality image even at a higher close of radiation (86).

The proposed amendments require information concerning the absorbed dose delivered by

CT systems to a standard phantom (a test object) and the imaging performance corresponding to this dose, within the normal range of system operating conditions. This information will

help to estimate the relationship between dose

and imaging performance. However, the clinician will continue to be expected to exercise professional judgment in selecting conditions of operation of CT scanners.

It is difficult to summarize available information on radiation dose from CT scanning. Maximum doses from a number of systems and

under a number of conditions of operation were

recently examined and were found to range

from less than 0.5 rad to almost 10 rad for a

single scan (158). As noted by the investigators,

however, “All of the systems are capable of

alternate conditions of operation which will

result in different doses than those reported

here, many of them significantly larger. ”

DIFFUSION AND UTILIZATION

Diffusion

This area of policy has been the site of the

greatest controversy over CT scanning during

the last several years. Contention has surrounded the health planning law, 5 certificate-ofneed (CON) review mandated in that law, and

the National Guidelines for Health Planning. b

Although it is difficult to say which, if any, of

these have had an impact on the rate of diffusion

of scanners, and/or the current aggregate supply of CT scanners, the most heated debate has

focused on the standards pertaining to CT that

are set in the national guidelines.7

— —

5Health Pla?lning and Ri’sources Development Act of 197 4

(Public Law 93-641 ).

‘National Guidelines for Health Planning, Federal Register,

Mar. 28, 1978, p. 13040.

‘As noted in OTA’s 1978 rt~port (129), section 1122 of the Social

Security Act gave many States the authority to review capital expenditures over $100,000. This mechanism was available beginning in 1972 and was used by a number of States early in CT scanner diffusion. However, 1122 reviews are being replaced by the

CON process. Now 36 States have CON laws.

The language of the Medical Devices Amendments of 1976 specifies assurance of effectiveness, but this is apparently used as a synonym

for efficacy. FDA approaches efficacy from a

rather technical standpoint. It interprets its

charge as one of assuring that the products sold

in the marketplace are safe and technically

capable of their professed abilities. It does not

interpret or perceive its purpose as being one of

determining how, and under what conditions,

those products are to be applied by practitioners. FDA has supported research related to

efficacy and safety of CT scanners. A survey of

the system performance of CT scanning in

selected U.S. hospitals has produced data for

developing dosimetry standards and technical

specifications of scanner performance (157,1.59).

FDA has also awarded a contract that will evaluate utilization of CT head and body scanners.

Survey items on its impact on diagnosis and

therapy relating to management and patient

outcome have been included to examine clinician perspective and motivation (30).

The National Guidelines for Health Planning

have been controversial since their inception,

following the enactment of the Health Planning

and Resources Development Act of 1974 (117).

The guidelines established standards for 11 technologies which were to be used by local health

systems agencies (HSAs) and State health planning agencies in reviewing and approving applications for capital expenditures by hospitals

of greater than $l50,000. Published in September of 1977,9 the first public request for comment elicited more than 50,000 responses, most

of which protested the proposed standards.

Several months of deliberations ensued. A revised set of guidelines was issued in January o f

“The use of th]s term is not intended to be negative. The Impact

(d the discussions and documents described below to promote

learning and mutual understanding ot the Issues on the part of all

parties must be recognized and valued.

“National Guidelines for Health Plannlng, Advance Notice of

Proposed Rulemaklng, Federal Regi.;ter, Sept. 23, 1977, VC1. 42, p.

48502.
1978, and a set of standards for nine technologies became official in March 1978. 11

The three standards set forth in the section of

the National Guidelines for Health Planning

pertaining to CT scanners (see app. E) are as

follows:

1.

2.

3.

A computed tomographic scanner (head and

body) should operate at a minimum of 2,500

medically necessary patient procedures per

year, for the second year of its operation

and thereafter.

There should be no additional scanners approved unless each existing scanner in the

health service area is performing at a rate

greater than 2,500 medically necessary patient procedures per year.

There should be no additional scanners approved unless the operators of the proposed

equipment will set in place data collection

and utilization review systems.

The current round of debate was instigated by

a request for comment and recommendations

concerning the existing guidelines for CT scanners. In issuing the final rules, DHHS had made

it clear that the newly established standards

would continue to be open to discussion and

suggestions for change. In keeping with its commitment, on March 23, 1979, almost 1 year after

the guidelines had become effective, the Department issued a public call for comment on the

standards for CT scanners. 12 The notice was

prompted by recognition of the fact that because

CT scanning is a rapidly changing field, new developments, experience, and data may have

emerged since publication of the original standards just a year earlier that might provide a

basis for altering that standard.

Comments and suggestions received in response to the notice have been considerable and

reflect the divergent opinions of various interest

groups. Among the suggestions have been increasing or lowering the number of patient procedures required; developing a populationbased standard for determining need; use of a

‘“h’at]onal Guidelines for Health Planning, Proposed Rulemaklng, Federal Register, Jan. 20, 1978, VO]. 43, p, 3056.

] ‘See footnote 6, p. 32.

I l~otlce 0[ Request for Comment on the CT Scanner GuidelmeS

of the National Health Planning Gu]dellnes, Federal Register Mar.

23, 1979, VOt. 44, p. 17760.

weighting formula; further specification of circumstances for adjustments; no change in the

existing standard; elimination of the quantitative target; and elimination of the standard

from the national guidelines (72,98,99,100,108,

109,135,168).

The request for comment renewed a vigorous

and intense debate over the CT standards

(52,112). Responses focused on the question of

whether there is sufficient evidence to suggest

the need for changing the single quantitative

standard of 2,500 patient procedures per scanner per year. In general, the response from providers and private associations (including manufacturers) has been that the target levels are

unrealistically high. In support of this position,

new evidence from a national survey of CT

capacity sponsored by the National Electrical

Manufacturers’ Association (NEMA) was presented which found that 61 percent of the 441 installations surveyed could not meet the existing

standards (82). The response from planning

agencies, on the other hand, has been the opposite, i.e., that the target levels may be too

low, but in any case are not unreasonable (97).

The experiences of HSAs that had established

standards higher than the 2,500 scans per year

were brought to bear on their case.

Several months of deliberations ensued over a

wide range of options for change suggested in

public comments (36). On September 13, 1979,

DHHS proposed changes that would provide increased flexibility in the standard to take into

account the proportion of head and body scans

and double studies13 performed, and would ensure that access to necessary CT services is

maintained (139). Commitment to further study

of alternative weighting approaches was also

recommended. However, no change in the

quantitative target of 2,500 procedures was recommended at that time.

Considerable support for the incorporation of

a weighting scheme in the guidelines had been

I JThe term “double study” refers to a series of two CT examinations consisting of an unenhanced study, followed by an enhanced

study. An enhanced study is one in which [one of several) contrast

agents is administered to the patient prior to the examination, the

objective being to obtain a clearer image of an abnormality. The

improvement in diagnostic information resulting from this procedure has been debated (129).
expressed in the comments; no fewer than 33

different weighting formulas and sliding scales

had been suggested (8). The HECT formula

(Head Equivalent Computed Tomography

Unit), based on results of the capacity survey

and proposed by NEMA, received the most

vigorous and consistent promotion (35,171).

While the concept of a weighting approach

found widespread support, the lack of consensus on the specifics argued that mandating the

use of any one approach would be premature.

As a next step, DHHS initiated efforts to evaluate alternative weighting approaches in

selected areas (111).

With respect to the addition of provisions for

increased flexibility, the reaction to the proposed changes was generally supportive both

from planners, and from providers and private

associations. However, while planners concurred with the need for further study of

weighting approaches, NEMA and ACR protested this recommendation, arguing that there

was already sufficient evidence on which to base

a weighting system. The recommendations for

increased flexibility prepared by the Health Resources Administration (HRA) and approved by

the Subcommittee on National Guidelines,

Goals, Standards, and Priorities of the National

Council for Health Planning were sent to health

planning agencies by DHHS, In November

1980, HRA was in the process of preparing

revised standards that would incorporate a

weighting formula. Such a standard must be

published for comment in the Federal Register

first, but it could be functioning by some time in

1981.

Other developments regarding the Federal

regulation of diffusion of CT scanners took

place on April 25, 1979. ’4 On that date, BHP of

HRA issued interim regulations regarding reviews of proposed capital expenditures for CT

services under the capital expenditure review

program of section 1122 of the Social Security

terim Regulations, Federal ii egister, Apr. 25, 1979, vol. 44, p.

24428.

I ~ ~oc-ltl~ S[,(-lJ rl tv A ~~t~~~ldl~l~>~l ts of 1972 ( I]ubllc Law 92-603), sec.

221, Llmltatl{]n on Federal Partlclpatlon for Capital Expenditures,

1972.

view program of the Health Planning and Resources Development Act (see app. I). Expansion of the 1122 review authorities was brought

about by concern on behalf of DHHS over the

appearance of head scanners in 1978 that were

being sold at prices well below the threshold

figure for review of $100,000 (74). The regulations were changed to cover any CT scanner

under a “change in service” review trigger. The

other target of amendments to both CON and

1122 regulations was the growing market for

mobile scanners: According to OTA data, the

number of mobile scanners doubled (from 7 to

14) during 1978. The potential market for mobile scanners appeared to be great because CON

regulations did not yet cover mobile units. Further, the anticipated change in medicare reimbursement policy to cover scans performed on

mobile units was expected to make the purchase

of the units even more attractive and to increase

sales significantly. Consequently, it was felt that

mobile scanners should be subject to the review

process (74).

There was limited public reaction to the April

25th issuance, but as was the case during the

controversy over the guidelines discussed

above, there was protest from individual providers, provider associations, and manufacturers of CT equipment, and support from

many local and State health planning agencies

(74). Objections to the additional restrictions on

the purchase of CT equipment focused on the

belief that the regulations were yet another example of overregulation of the CT scanner as

the “scapegoat’ -unfairly singled out when

other hospital equipment more costly than CT

scanners was not subject to review.

The changes in the regulation of capital expenditures under 1122 also specified the review

of proposed changes in CT “services” (in contrast to CT equipment), the implication being

that replacing a dedicated head scanner with a

body scanner and/or upgrading existing equipment is now subject to review. Under CON,

such changes have always been regarded as new

services and have therefore been subject to

review. One outcome of the “rush” for scanners

in 1975 was that scanners purchased at that time

have since been outmoded by total body scan-
ners with markedly improved scan time and image resolution. The updating and replacement

of CT units within these health facilities has

become an issue of great concern for providers

as new generations of scanners have become

available.

Taken together, the new rules promulgated

might be interpreted as concrete evidence of the

increasing emphasis placed by DHHS on the objective of cost containment—possibly at the expense of access and quality of care concerns.

The final change occurring in 1979 with the

potential for affecting the diffusion and, more

importantly, the distribution of CT scanners

was the enactment of new amendments to the

Health Planning and Resources Development

Act of 1974. Those amendments were signed

into law in September 1979.16 Under the provisions of the 1974 law, all major capita I expenditures by physicians for out-of-hospital settings

were exempt from CON review (37). OTA, in

its CT report of 1978 (129), cited this exemption

as one of the greatest weaknesses in the original

planning legislation. At that time, OTA proposed expanding regulations to cover all purchases of major medical equipment regardless of

setting or ownership (see app. A).

The 1979 amendments only partially address

this weakness. The health planning law now requires State review and approval of equipment

outside hospitals, regardless of ownership or

physical location, if the equipment is to be used

to provide services for hospital inpatients. This

amendment represents a compromise resolution

from the 1978 Senate bill, which had required

certification for all major medical equipment

purchases irrespective of ownership or setting.

It is aimed at the loophole in the previous law

whereby physicians could make a private purchase of a scanner for a hospital that might

either have applied and failed to win approval

or wished to avoid the CON process entirely,

and then could locate that scanner in the

hospital setting.

While the above amendment extended CON

review beyond purchases by health facilities

(i. e., hospitals), another amendment to the law

resulted in the exemption of certain health maintenance organizations from the CON review

and approval process.

Finally, the new law includes a preemption

provision barring States from passing CON

laws that are more stringent than the Federal

statute after September 30, 1982. At last report,

seven States had broader certification requirements than Federal law stipulates (130).

Overall, the new health planning law added

limited new regulatory authority, and it postponed the date (January 1980, set in the 1974

law) for a pending cutoff of certain Federal

funds to States that had not yet enacted mandated CON programs by that date (71). Currently, only 36 States have enacted CON laws

(73,161).

The major gap in the health planning law remains, and what was intended to partially close

an existing loophole in the law affecting the diffusion of scanners may have a perverse effect on

the distribution of scanners. Under the old law,

CT scanners owned by physicians but operated

in hospitals may have skirted CON review, but

they were at least more accessible to the community in these settings than in private offices.

Hospitals have always had a more difficult time

purchasing scanners than private physicians

have. The new amendments, leaving them with

one less option, however, place hospitals at an

even greater disadvantage.

Thus, the price exacted by curtailing the diffusion of scanners (i.e., the aggregate number of

scanners) may possibly be increased institutional maldistribution of scanners: The law now

favors not only private purchase, but private location of scanners as well. This is another example of the preeminence of the cost-containment

objective—possibly at the expense of access and

quality of care concerns—found in Federal policies toward the diffusion of CT scanners. It is

little wonder that the debate over the guidelines

is long and loud and hotly argued by those parties that are subject to them.

To summarize, the emphasis on cost-containment objectives may be to omit other important

considerations such as access, medical effec-
tiveness, equity of distribution, and safety, as

well as other (besides capital) costs. This is not

to suggest that the emphasis on cost containment in the case of CT is unwarranted or that it

necessarily should be lessened, but is to suggest

that these other considerations should not be

sacrificed (either unwittingly or intentionally) in

restricting the deployment of scanners in the

name of cost containment. Such policies may

strike particularly at the poor and underprivileged (14). The tradeoffs between containing

costs on the one hand and assuring access and

quality on the other should be made explicit,

and a better balance struck between them. In

keeping with the statutory mandate of the

health planning program, it is critical to recognize a much broader set of indicators than

cost moderation in estimating the impact of

planning and regulatory activities on the deployment of CT scanners.

Utilization

The history of coverage of CT scanning by

publicly funded third-party payers has been one

of increasing expansion, but it also is the first instance of a policy decision by HCFA to withhold

reimbursement payments for a particular new

procedure pending evidence of efficacy (184).17

Eligibility for reimbursement of CT scans

through the medicare program administered by

HCFA has always been restricted by the type

and manufacturers of scanners used, and to a set

of conditions deemed appropriate for use. Scans

of the head, when performed on an EMI, Ltd.,

head scanner, have been reimbursed since September 1976 (103, 129).

——-

‘“Pr}vate third-party payers have exhibited similar kinds of policy declslons with respect to CT that have also been precedents.

Blue Cross and Blue Shield, (or example, has kept a list of procedures and services (such as gastric freezing) that are widely

agreed to have no medical benefit, and for which they do not reimburse. Blue Cross and Blue Shield also withheld payments for CT

scans for some time, and it was that insurance company who requested the study on CT scal\ning that resulted in the first published concensus on indications for CT scanning (116). The influence of the private sector on the acceptance of CT scanning in

medical practice is, therefore, -ecognized as being significant but is

not the focus of this discussion. The potential for leverage on diffusion and practice patterns tk rough private sector health insurers

warrants further investigation

Scans of the body, however, have been reimbursed only since August 1978 (103). Under the

“reasonable and necessary” clause of the Social

Security Act authorizing medicare payments

(118), HCFA already had a mechanism for

denying payment for clearly antiquated procedures. Based on a broad consensus that the

procedures were not useful, rather long lists of

such procedures were sent to medicare intermediaries. Using this same clause, medicare

denied payment for body scans for almost 2

years, pending study and recommendation by

the now defunct OHPA in OASH for reimbursement of certain indicated body scans (184). In

January 1978, OHPA made its determination

(107). Eight months later, medicare began reimbursing for certain body scans in addition to

head scans, based on detailed medical indications for scanning.

Until April 1979, reimbursement for both

head and body scans was limited to scanners installed in a fixed location. But again, based on

the findings of a 15-month study carried out by

OHPA, that Office recommended in June 1978

that scans done on mobile scanners also be reimbursed (105). Fourteen months later, coverage

was extended to scans done on mobile units

(104).

Increasingly, the areas of reimbursement policy and planning are being tied together. For example, medicare instructed its intermediaries in

1979 to pay for scans from mobile scanners only

if they have been approved by CON review

(104). The regulations discussed above regarding reviews of proposed capital expenditures

under section 1122 of the Social Security Act

also state that denial of reimbursement under

the medicare, medicaid, and maternal and child

health programs may be the penalty for capital

expenditures that fail to conform with the

review plans, standards, and criteria.

Other, more subtle disincentives concern levels of payment. In August 1978, HCFA instructed its carriers by letter (intermediary letter

No. 78-38) that services on CON-approved

scanners would be reimbursed at cost, while

services on scanners without approval (e. g.,

those in private physicians’ offices or those

located in hospitals but owned by physicians)
would be subject to ceilings. Mobile scanners

not owned by hospitals would also be subject to

ceilings. These changes were in part an attempt

to counter reimbursement incentives toward the

purchase and use of scanners outside the planning review and approval process (106). However, in March 1980, in a case in South Carolina

(Starns v. Harris), a U.S. District judge enjoined

HCFA from continuing the policy based on its

having been promulgated without due process.

Rather than appeal, HCFA announced its intention to reissue the policy and make it applicable

to other expensive technologies as well. 18 The

proposed rule should be published in the Federal

Register within a year.

Besides being linked to planning policies, reimbursement policy is also being increasingly

tied to evaluation policies. HCFA now has access to an institutionalized resource in the newly

mandated NCHCT and its functions to which it

may direct reimbursement inquiries regarding

efficacy of medical technologies and their applications (133). OTA’s 1978 report (129) previously proposed that rates of reimbursement be

based on efficient use of technologies and that

the payment system be fundamentally restructured to encourage providers to perform and use

services efficiently (see app. A). To the extent

that NCHCT can develop cost-effectiveness information, HCFA will be better able to translate

it into a structure that might promote costeffective physician behavior. Whether the information will be developed and, if so, whether it

can be translated into effect through reimbursement policies remains to be seen. A recent OTA

assessment (127) examined some of the difficulties of applying cost-effectiveness techniques in reimbursement. In addition, there is a

possible ethical question involved in withholding a service or procedure on the basis of

the question, is it worth its cost? rather than on

the question, does it confer a health benefit? The

use of such a criterion in providing services for

only that part of the population receiving publicly financed health care has obvious ethical

ramifications that might cast doubt on the desirability of reimbursement policy based on it.

—

“Medicare Program; Reasonable Charge Llmitatlons, Fedcru/

Register, May 29, 1980, VO]. 45, p. 36100.

Finally, one of the major expressions of Federal policy toward the use of medical services,

including CT scanning, is the PSRO program established by law in 1972.19 PSROs are separate

and independent organizations covering almost

200 areas of the country. Each PSRO must be

substantially representative of all practicing

physicians in an area. The program operates by

setting standards and criteria for the desired

level and quality of medical services and by

evaluating against these standards the services

actually provided. This process is designed to

ensure that payment will be made only when

services are medically necessary.

OTA’s 1978 report on CT scanners (129) described the PSRO program in detail, and that

material is not repeated here. The only major

change that has occurred since 1978 that could

affect CT scanning is that the national PSRO

program distributed draft screening criteria for

body and head CT scans on February 22, 1979

(160). These criteria, which were developed

by the American Association of Professional

Standards Review Organizations, reflect the

lack of well-validated information on efficacy

and appropriate use of CT scans (see app. D).

The body criteria are taken virtually word for

word from the IOM report of April 1977 (116).

In July 1979, SCBT published a list of indications intended to “clarify, update, and augment

the indications published in the April 1977 policy statement of the Institute of Medicine” (164).

Thus, by the time the PSRO draft guidelines

were beginning to be applied, the body criteria

were out of date, according to the most expert

group dealing with the subject. (The National

Professional Standards Review Council, recognizing this problem, suggested to potential users

that the criteria should be reevaluated at least

every 6 months and updated if necessary. ) This

is not to judge the validity of the recommendations themselves, since they were based largely

on clinical experience, and not on well-designed

studies.

By October 4, 1979, eight PSROs had completed medical care evaluation studies on CT

scanning (188). Four others were carrying out or

‘* SC>cIal .+cur~~y An~c)~dmLIHts of 1’472 (Publ]c Law 92-b03 ), sec.

301.
38 . Pollicy lmplications of the Computed Tomography (CT) Scanner: An Update

planning CT scan review at that time. On May

28, 1980, OTA staff visited one of the PSROs

that was studying CT head scanning. The draft

review criteria had been used by that PSRO to

produce a list of 21 criteria justifying CT head

scans, arrayed in order of importance (see app.

D, exhibit 4). The first eight criteria related to

evaluation of suspected or previously known

diagnoses, the next eight related to abnormal

physical findings, and the next five related to

symptoms noted on a medical record when no

suspected diagnosis was listed. Only 8 of 427

scans the PSRO reviewed did not meet these

criteria. Of these 427, however, 58.3 percent

yielded negative results. The PSRO concluded

that CT head scans were used judiciously in that

region.

There are numerous reasons that this PSRO’s

conclusion cannot be supported. One is that the

indications written in medical records as indications for procedures are known to lack validity.

Secondly, the indications are broad and general

enough so that almost any patient would qualify (one of the criteria is simply “headache”).

But perhaps most important is that the criteria

have not been firmly connected to evidence of

efficacy. The truth is that it is not known in that

PSRO area, or in any other, whether the CT

head scans are done judiciously. What can be

observed is that PSROs deal primarily with extreme cases, and thus cannot be expected to

have a great impact on the utilization of any

procedure that is accepted by the medical community. In the absence of scientific efficacy information, existing practice may become the

standard of practice-whether or not it is

“appropriate. ” Established patterns have the

habit of lingering in medical practice even after

such time as efficacy information becomes

available (60).

An interesting pilot project is attempting to

use evidence of efficacy of an X-ray procedure,

pelvimetry, to significantly reduce the use of Xrays. FDA’s BRH developed a consensus policy

statement concerning the lack of efficacy of Xray pelvimetry. The statement was endorsed by

ACR and the American College of Obstetrics

and Gynecology. In the study project, PSROs

intend to change the practice norm by moving

to eliminate these X-ray procedures for purposes

where they are proved not to be efficacious.

This project demonstrates the promise of

PSROs, and with the development of better information on efficacy, can perhaps become the

norm rather than the exception.

In summary, utilization policies toward CT

scanning are still very much in the process of

change. HCFA perceives that it has a role in

controlling technologies such as CT scanners

and will undoubtedly make further changes in

its payment and review policies. Further regulation through these mechanisms seems inevitable. In October 1980, HCFA had drafted proposed regulations (not yet available) that will

define “reasonable and necessary, ” the criteria

specified for payment for services in the medicare law, 20 According to HCFA staff, the definition will include costs and broader social implications in addition to efficacy and safety.
4

Summary and Conclusion;
4.

Summary and Conclusions

The computed tomography (CT) scanner remains an instructive case study which illuminates both the process of innovation and Federal

policies toward medical technologies. Although

the CT scanner is not in itself a major health

policy issue, it can be used to understand problems in Federal policies.

The trends in diffusion of CT scanners have

been the cause of much controversy. Federal

policies have been cautiously developed to curtail the rapid diffusion of medical technologies

such as the CT scanner. Critics have leveled a

general charge that Government interference is

inhibiting the process of innovation— one of the

critical signs of a robust, dynamic economy. But

it is difficult to ascertain whether the existence

of the Health Planning and Resources Development Act itself, the process of review by health

systems agencies (HSAs) and approval by State

health planning and development agencies

(SHPDAs) of applications for large capital expenditures by hospitals under certificate-of-need

(CON) provisions of that Act or section 1122 of

the Social Security Act, or the standards for CT

scanning set in the National Guidelines for

Health Planning to assist HSAs and SHPDAs in

these functions have influenced the CT scanner

diffusion rate. Although one would expect the

diffusion and distribution of scanners to be

related to Federal policies addressing them,

there is really no good evidence available to indicate whether and to what extent any or all of

these factors have influenced the diffusion of CT

scanners.

Opposition to Federal policies concerning CT

scanners has focused on the National Guidelines

for Health Planning. For over a year now, the

debate between manufacturers, providers, planners, and Federal authorities has honed in on the

specific standards set in those guidelines. Although the guidelines have the potential to restrict diffusion and affect the distribution of

scanners, diffusion slowed before development

of the guidelines (see figure 1 in ch. 2). The

standards set in the guidelines became effective

only in March 1978. It should also be noted that

the standards are advisory rather than mandatory. Scanners installed during 1979 were

probably ordered months earlier. The rigor with

which the guidelines are applied by HSAs in

reviewing CON applications and the extent to

which SHPDAs adhere to them in deliberating

approval of CON applications are unknown.

All these factors make the impact of the

guidelines uncertain, It may be that the opposition to the guidelines themselves and the debate

over the specific standards for CT scanners in

them are based largely on the potential impact

that the guidelines may have in the future,

rather than on any effect that has been witnessed in the recent past. In addition, the role of

the Federal Government in regulating diffusion

of medical technology is being questioned.

The impact of CON regulations on the diffusion and distribution of scanners is, in general,

currently unknown. (One study that is investigating the correlation between the implementation of State CON laws and the diffusion rate of

CT scanners on a State-by-State basis is underw ay (21). ) The manufacturers of CT scanners

believe that the guidelines and CON regulations

have had an impact. While requests for CT

scanners are approved far more often than they

are disapproved (74), the effect of the health

planning process of discouraging applications

must be considered as well. It may well be that

the extremely high number of scanners sold in

1975 was induced by the anticipation of the impeding sanctions embodied in the upcoming

health planning regulations (15). It also seems

likely that a number of scanners were purchased

for physicians’ offices because of delays in obtaining permission for hospital scanners (15).

Thus, the health planning program has partial

responsibility for the existing maldistribution of

CT scanners (see ch. 2). With the large number

of older scanners in place, the health planning

process may impede appropriate replacement

and upgrading as well.

41
This discussion suggests a partial alternative

explanation regarding the slowdown of the diffusion rate that would be the logical outcome of

the intense market activity of 1975. That is that

the market for CT scanners may be beginning to

reach its limits. It is supported by close inspection of the data on distribution and diffusion of

CT scanners to May 1980, when there were

1,471 operating scanners. Analysis of the institutional placement of scanners indicates that

more than 80 percent of all large hospitals, or

those over 500 beds, now have operational

scanners. Even in early 1979, 62 percent of hospitals over 300 beds and 46 percent of those over

200 beds had scanners, A July 1979 presentation

by the Technology Marketing Group, Ltd. (66),

showed that of 2,250 hospitals with over 100

beds that did not have a scanner, only 23 percent were considering purchase of a scanner,

while only 22 percent of the 624 hospitals with

scanners were considering purchase of an additional one.

That the slowdown is more a natural phenomenon than a result of Government policy

may be supported from a theoretical point of

view as well as an empirical one. The cumulative diffusion curve of the installation of CT

scanners in the United States is a textbook illustration of a theoretical innovation diffusion

process (see ch. 2). The logistic curve is a model

of that process that holds true of innovations

such as automobiles, televisions, and automatic

washing machines. Following the introduction

of an innovation to the market, a certain percentage of interested parties will purchase it.

Through time, this percentage will accumulate

until virtually all of those who are expected to

purchase will have done so. As more parties of

this target group make their purchase, a smaller

percentage are left to make theirs, so that over

time the rate of diffusion must slow down and

eventually level off. This phenomenon may just

be manifesting itself in the 1978, 1979, and early

1980 data on CT scanner installations.

In addition to the question of whether or not

Federal policies embodied in health planning

programs have had an impact on the number of

scanners, the question of whether they have had

an impact on the distribution of scanners also

remains at issue. Questions persist about the effectiveness of health planning laws with respect

to the optimal location of scanners. Provisions

of the health planning laws do not require CON

approval of large expenditures made by private

physicians. Currently, about 19 percent of the

total number of scanners in this country are

located in nonhospital settings. In particular,

large urban hospitals typically serving a predominantly indigent clientele and large Veterans

Administration hospitals lack scanners. Geographic maldistribution is also evident. Some

urban areas have exceptionally high scanner-topopulation ratios (the District of Columbia, for

example, has 15.9 scanners per million population, and the Los Angeles area has 14.0 scanners

per million); but some rural areas have no accessible CT scanner. Health planners have limited tools to assure placement in appropriate

sites—their powers are largely negative. This

may be the greatest problem with the health

planning program.

Although Federal health planning programs

may aim to curtail the diffusion of CT scanners,

the stance assumed by the Federal Government

in its policies toward other stages of development and use of scanners has tended to foster

diffusion and widespread use. As noted earlier,

Federal policies address all of the four stages in

the development and use of medical technologies: R&D, demonstration of efficacy and safety, diffusion, and widespread utilization. In particular, the Federal Government has traditionally been a generous supporter of biomedical

R&D. The real boon to diffusion and use of CT,

however, has been in the Federal policy area of

financing. Through its reimbursement policies,

the Federal Government continues to assume an

almost open-ended commitment to pay for CT

scans. This posture has doubtless played an important role in the rapid acceptance of CT scanners and scanning in medical practice, thereby

influencing the rate of diffusion and the aggreate supply of scanners.

Thus, a number of factors have affected CT

scanner diffusion, not least of which is the revolutionary nature of the technology itself and its

potential for improving diagnosis. The relative
impact of each of these factors will probably the problems identified in OTA’s 1978 report

never be fully understood. (129) remain largely unaddressed. For this

reason, the policy alternatives of the 1978 report

Although some changes have been made in are reprinted in appendix A. They still seem to

policies regarding CT scanners since 1978, the have relevance to those interested in improving

underlying programs remain little changed, and Federal policies toward medical technologies.
Appendixes
Appendix A.— Policy Alternatives

(Reprinted From Policy Implications of the Computed Tomography (CT)

Scanner, Office of Technology Assessment, August 1978)

The computed tomography (CT) scanner is a new

diagnostic device that represents an important advance in medical detection. Studies show that CT

scanners perform reliably and provide accurate diagnoses of abnormalities in the head and abdomen. As

a relatively safe and painless procedure, CT scanning

can replace several less safe and more painful technologies, such as pneumoencephalography. CT scanning has been readily accepted by the medical profession, and its use is expanding rapidly. To the extent that a fundamental problem with CT scanning

exists, it lies not in the existence of the technology,

but in its appropriate use.

Although this study focuses on CT scanners, its

findings are applicable to the general problem of

appropriate use of diagnostic medical technologies.

Appropriate use includes considerations of safety, efficacy, and cost. Overuse of a technology may lead

to both excessive expenditures and unwarranted risk

to patients; underuse may result in delayed detection

or prolongation of medical problems. In either case,

the study demonstrates basic policy problems related

to the appropriate use of medical technologies.

Use of a diagnostic medical technology such as a

CT scanner depends on many factors: Some increase

and others restrict use. A principal and obvious factor is the desire of physicians to provide good care

for their patients. Attempts to identify medical problems and to refine diagnoses lead physicians to use

the technologies available to them. Medical education also predisposes physicians to liberal use of diagnostic technologies by emphasizing thoroughness

rather than discrimination and concern for costs. The

current medical malpractice situation further encourages the use of diagnostic tests to avoid error. In

some instances, patients themselves request that

physicians perform diagnostic tests. Although these

are important issues, this report has not addressed

medical education, malpractice, and patient demand.

Rather it concentrated on available information,

governmental regulation, and financing.

After their formal training, physicians continue to

receive information about medical technologies from

scientific meetings, professional publications, colleagues, manufacturers’ representatives, and their

own clinical experience. Two Federal agencies, the

Food and Drug Administration (FDA) and the National Institutes of HeaIth (NIH), develop and disseminate such information. By law, manufacturers of

drugs and medical devices must submit to FDA data

that supports claims made in labeling. NIH conducts

evaluations of certain medical technologies and

makes the results available to the public. However,

as illustrated by this study, no single Federal or private policy establishes a formal, systematic process

to develop needed information about medical technologies. Nor is there a clearly defined mechanism

for disseminating what is known to all appropriate

parties.

Without such information, physicians appear to

test new technologies using a variety of methods to

develop a sense of their worth empirically. Unfortunately, these methods are often not designed to

yield statistically reliable information. This informal

experimentation can both retard the early application

of valuable technologies and advance the use of questionable ones. Without valid information obtained

from well-designed studies, physicians face a very

difficult task in deciding on the appropriate use of

new technologies.

Prevailing methods of financing medical care provide incentives for additional use of technologies,

regardless of their marginal value. Health insurance

programs have continued previously existing fee-forservice payment of physicians; performance of additional tests thereby generates additional revenue for

the physicians. Hospitals are reimbursed on the basis

of their costs or charges. These methods at the least

facilitate and at the most stimulate providers to

prescribe additional use. Under such a system, providers have little incentive to weigh the benefits and

costs of additional tests.

The regulatory framework created by FDA, the

Professional Standards Review Organizations

(PSROs), and capital expenditure laws also affects

the use of medical technologies, in a restrictive sense.

FDA requires proof of safety and effectiveness before

drugs and devices may be marketed. The PSRO program was designed to establish norms and standards

for hospital utilization and medical care provided

under medicare and medicaid. And review of proposed capital expenditures is aimed at avoiding unnecessary duplication of facilities and promoting

their efficient use. Unlike many of the other factors

affecting technologies, these programs may restrict

their use. The PSRO program and capital expenditure review were created in part to counter incentives for greater use, especially from financing

methods.

47
48 ● Policy Implications of the Computed Tomography (CT) Scanner: An Update

The following sections present alternatives that

might improve the use of medical technologies such

as CT scanners. The alternatives are presented in

three sections, each addressing a specific category of

governmental policy: Section 1 focuses on developing and disseminating information on efficacy and

safety; section 2 on regulatory policies; and section 3

on financing. The alternatives in each of these sections illustrate, but do not exhaust, possible options.

Nor are they necessarily mutually exclusive. Each

alternative should be measured against the continuance of current policies and their consequences as

well as against the consequences of the alternative

itself. These alternatives represent broad guidelines

for policy. As such, they do not consider in depth the

more technical aspects of implementation, such as

the mechanisms for evaluating efficacy, specific

criteria for utilization review, methods of cost accounting, or details of ratesetting.

1. Information on Efficacy and Safety

Many decisions concerning the use of a medical

technology depend—directly or indirectly—on an

assessment of its efficacy and safety. Much of the

available information on efficacy and safety is not

derived from well-designed controlled clinical trials,

epidemiological studies, or analyses of clinical experience. Instead, informal judgments evolve, judgments based primarily on the experience and perceptions of individual physicians. Judgments of this

type, when they do not accurately reflect the efficacy

and safety of a technology, may contribute substantially to inappropriate use.

The development of information on efficacy and

safety involves identifying the technologies to be

studied, conducting the appropriate evaluations, and

synthesizing the results of those evaluations and relevant clinical experience. The synthesized information

may then be disseminated to the individuals and organizations most in need of guidance. Although simple to delineate on paper, this process of synthesis

and dissemination can be complex and difficult to

implement.

This section presents two policy options designed

to address the needs of medical care decisionmakers

for efficacy and safety information. The first concerns the development and dissemination of the information. The second requires the type of synthesis

that analyzes information to produce formal policy .

judgments about a technology’s efficacy and safety.

This section and the alternatives presented in it are

concerned only with developing and disseminating

information.

Together, the two alternatives, if adopted, would

increase the amount of information available to

physicians in their use of medical technologies The

information would also be helpful to planners,

regulators, and public policy decisionmakers. As explained in alternative 3 of the following section, FDA

already requires the development of information and

makes certain policy judgments about the safety and

efficacy of medical technologies. The alternatives in

this section would substantially enlarge these existing

processes,

As discussed in chapter 3, information about efficacy is used or could be used by many Federal programs, as well as by providers of medical care. Decisions and policies based on efficacy may now be

inconsistent as each user defines efficacy in its own

way. As described in chapter 3, only FDA has a formal definition of efficacy at present, and that definition merely ensures that the evidence substantiates

the claims of the manufacturers. But FDA’s decisions

on efficacy and safety are of limited value to health

planning agencies, PSROs, and reimbursement

programs.

A general definition of efficacy could be developed

for all types of medical technologies—preventive,

therapeutic, and diagnostic. No medical technology

is beneficial in all circumstances, and some technologies can be extremely beneficial only if used in

very limited situations. Therefore, the efficacy of a

particular technology must be related to a defined

population, a given medical problem, and particular

conditions of use. A complete specification of efficacy encompasses all three of these factors. ’

Alternative 1: Establish a formal process to

identify medical technologies that should be

assessed for efficacy and safety; conduct the

necessary evaluations; synthesize the results

from the evaluations and from relevant clinical

experience; and disseminate the resulting information to appropriate parties.

Except for new drugs and, potentially, new medical devices, the Federal Government’s identification

of technologies warranting study occurs in an ad hoc

manner. Often, decisions to evaluate a technology

depend on the curiosity of investigators or Federal

program administrators. Few efforts have been made

to coordinate the selection of technologies to be

studied with the informational needs of relevant governmental agencies and private groups.

IEfflcacy IS def}ned as the potent]al ber eflt to Individuals In a defined

popu]atlon from a med]cal technology applied for a given medical p~oblem

under Ideal conditions of use. These Ideal condltlcms may be approa( hed In

research settings, but are unllkely m al erage practice. Efficacy, then,

represents an outer IImlt to benefit.
Appendix A. —Policy Alternatives ● 49

No existing Federal procedure systematically identifies those technologies that are most in need of investigation. Indeed, no formal set of criteria has been

developed for establishing such priorities. The private sector identifies medical technologies to be

assessed for efficacy and safety through an even more

informal process. As described in chapter 6, however, some efforts have been initiated by organizations such as the Federal Health Care Financing

Administration and private Blue Cross-Blue Shield to

identify and develop information on possibly inefficacious or unsafe technologies.

Various Federal agencies currently have responsibility for conducting or funding studies on efficacy

and safety, although in each case their mandate is

limited and often ambiguous. The NIH effort is by

far the largest; that agency spent approximately $100

million on more than 750 studies during fiscal year

1975. The emphasis at NIH is on new technologies,

rather than on those already diffused; z thus, existing

technologies receive relatively little scrutiny. Similarly, drugs and biologics receive more attention than

devices or medical and surgical procedures.

No Federal policy focuses responsibility for the dissemination of efficacy and safety information.

Although NIH and FDA both disseminate substantial

amounts of information, their efforts are hampered

by various factors. For example, NIH historically

lacks working relationships with many of the parties

in need of the information. Although FDA obtains

information on efficacy of drugs and devices from

manufacturers, most of that information is considered to be proprietary and is not released in that

form by FDA to the public or to providers. In addition, the information disseminated is often not in a

form readily usable by parties in need.

This study of the CT scanner illustrates some of the

consequences of using the present informal assessment process, Although the CT scanner has been the

subject of much publicity since its introduction, few

well-designed evaluations of its efficacy and safety

have been conducted, Despite this dearth of information, CT scanning has been more fully evaluated than

many other diagnostic technologies.

Instead of continuing the present informal assessment system, the process could be made explicit and

formal as indicated by this alternative. The process

could be applied to both existing and new medical

technologies. With the implementation of an explicit,

formal system, criteria could be developed for

screening the thousands of existing and future medical technologies to establish priorities for investiga-

‘Dttuslon ot a techn[)logy reters to the process of adopt]on from de -

velopment un t)] general acceptance

tion. These criteria could take into account factors

now excluded or only minimally included in the

process of assigning research priorities. Such factors

as needs of health planning agencies and third-party

payers and the level of expenditures for the

technology could be included in the criteria to be

established.

Also, under this alternative, an agency or agencies

would be given explicit responsibility for conducting

studies of efficacy and safety or ensuring that they

are conducted, for synthesizing information to appropriate parties, (Two bills before Congress, H.R.

12584 and S. 2466, would create an office within

the Department of Health, Education, and Welfare

(DHEW) to evaluate medical technologies, ) The

direct anticipated result of this alternative is the production of science-based information for use by

medical professionals, policy makers, Government

agencies, and the public.

This alternative is not designed to change the current processes of introducing and using medical technologies except to increase the amount of validated

information available. The present process allows a

broad and varied experimentation process to occur

with new medical technologies. Through its processes of careful human experimentation, the present

system also permits technologies to be used early in

their development. Controlled clinical trials, epidemiological studies, and other forms of technology

evaluation are often lengthy activities. Thus, the

development of information on efficacy and safety

can be a time-consuming process. Under this alternative, diffusion and use of a medical technology

would not necessarily be postponed until the conclusion of the evaluation process.

Implementation of this alternative could be costly.

Controlled clinical trials are expensive: An average

trial funded by NIH costs more than $100,000 per

year, and those for surgical procedures or expensive

technologies may be several times higher. Formalizing activities under this alternative is likely to increase substantially the number of trials because the

screening and synthesizing processes would identify

problems with technologies and gaps in efficacy and

safety information. A large number of medical technologies might warrant careful examination, requiring complete reviews of available information and attention to clinical experience. The process outlined

would make cooperative trials (such as many of

those of the National Cancer Institute) more feasible,

a development that could reduce the magnitude of

the increase in the trials.

A distinction can be made between changing the

total use of medical technologies and reducing inappropriate use (e.g., of technologies that are under-
used or overused). This alternative makes the latter

possible, though it does not ensure it. Reduction in

the use of certain technologies, following evaluation,

might be offset by increased use of other technologies, some of which may themselves be unevaluated. The relative magnitude of these three factors—

reducing use of overutilized technologies, increasing

use of underutilized ones, and the unpredictable

shifting of utilization patterns from one technology

to another—will in part determine the effect of this

alternative on total use of medical technologies and

on expenditures for medical care.

Alternative 2: As part of alternative 1,

establish a formal process for making official

judgments about the efficacy and safety of

medical technologies.

Under current law, FDA must determine the efficacy and safety of a drug or device before it can be

marketed. No Federal organization is responsible for

officially determining the efficacy and safety of medical and surgical procedures. At least two components of the Public Health Service (NIH and the

Office of Health Practice Assessment) are attempting

to develop formal systems to synthesize information

and arrive at decisions on particular medical

technologies.

The synthesis process of alternative 1 could take

many forms. It could collect and analyze existing information, or it could attempt to identify gaps in existing knowledge as a guide for further research.

Under this second alternative, synthesis would involve collecting and analyzing available information

in order to produce official policy judgments about

the efficacy and safety of the technologies under

examination.

This alternative would establish a process whereby

relevant information on a medical technology is

critically evaluated. The evaluation would result in a

judgment, or policy decision, as to a technology’s efficacy and safety. This alternative would be integrated with alternative 1. The judgments could

contain detailed information on a wide range of indications for appropriate use of the technology.

Thus, they could be broader than FDA’s current

determinations for marketing approval,

Providing official judgments to relevant individuals and organizations would add to the information available to them for making decisions.

However, those individuals and groups would still

make the final decisions. The judgments about efficacy and safety might be issued as guidelines or as

recommendations. They would not be binding. This

second alternative would only produce information;

it would not be a regulatory process.

Such official information might reduce the errors

in judgment that such individuals and organizations

make. However, mistakes made by the group developing the judgments, while perhaps fewer in number,

would have broader ramifications because of their

official nature. Since mistakes are inevitable and

judgments of efficacy and safety can change as additional information becomes available, this alternative would require a substantial degree of flexibility in operation. The process outlined in this alternative and alternative 1 could be used initially for a

small number of technologies to test its feasibility.

An evaluation of CT body scanning, for example,

could produce judgments about the types of benefits

likely to result for certain kinds of patients and

specific medical conditions.

This second alternative would almost certainly

have an effect on the current medical malpractice

situation. The existence of official, though voluntary, statements as to the efficacy and safety of a

technology might become the standard for judging

whether a provider properly used that technology.

The major controversy surrounding this alternative would be determining the process that would be

used to make such scientific judgments. Because such

judgments could be used to decide whether a technology is to be reimbursed and where it can be

useful, this alternative could become the focus of

considerable political and economic pressure. Care

would have to be taken to see that the process is both

timely and scientifically appropriate.

2. Governmental Regulatory Policies

In an attempt to offset powerful incentives encouraging the use of medical technologies, Congress

has established three regulatory programs: the FDA,

the PSRO program, and capital expenditures review.

FDA regulates the marketing of drugs and devices.

Marketing requires prior FDA approval that the technology is safe and effective, and advertising is limited

to the approved conditions. FDA does not have

authority to restrict subsequent use by physicians or

patients. PSROs evaluate appropriateness of care

given to medicare and medicaid patients. PSROs

may establish standards for the use of specific medical technologies, such as CT scanners, although few

such standards have yet been developed.

State certificate-of-need laws require prior approval for capital expenditures greater than a certain

amount, usually $100,000 to $150,000. Federal and

most State laws cover hospitals, but exclude private

physicians’ offices. In general, capital expenditure

laws do not regulate use of facilities or equipment
Appendix A. —Policy Alternatives ● 51

once they are in place. The Social Security Act also

restricts payment under medicare to services that are

reasonable and necessary for diagnosis, treatment, or

improved functioning.

Inadequate information about efficacy and safety

handicaps the effectiveness of these three programs.

FDA obtains information about efficacy and safety

from manufacturers, but that information is limited

to certain uses of the drug or device. PSROs, reimbursement agencies, and State and local planning

agencies need information about the appropriate use

of a technology—the population benefiting, the medical problems affected, and the conditions of use

under which the technology is safe and effective. Further information is required concerning the substitution of a new technology for existing ones. Both the

PSRO and the health planning programs are new and

not yet fully implemented. In addition, lack of

universal coverage facilitates circumvention of these

programs.

This section includes alternatives concerning the

use of medical technologies, capital expenditure review, and medicare reimbursement. Alternatives 1

and 2 from section 1 would facilitate alternative 3

and would be necessary for alternative 4. Alternative

3 would restrict the use of medical technologies to

those indications approved by FDA for marketing

purposes. Alternative 4 would link medicare reimbursement to the information and judgments of alternatives 1 and 2. And alternative 5 would expand the

regulation of capital expenditures to include all purchases of medical equipment regardless of setting or

ownership.

Alternative 3: Authorize a Federal regulatory

agency, such as FDA, to restrict the use of medical technologies to the conditions of use

specified in the FDA-approved labeling.

When FDA approves a drug or device for marketing, it also approves the specific wording of the

product’s labeling, i.e., the written information used

by the manufacturer to describe the product. Labeling (which includes package inserts) lists medical

conditions (and possibly populations) for which the

drug or device is deemed to be safe and effective and

warns about possible side effects.

These “indications for use” are usually not exhaustive. A manufacturer that has conducted premarketing clinical tests to evaluate safety and effectiveness for defined medical conditions and population groups could then seek marketing approval only

for those conditions. Thus, the FDA marketing approval process might consider only a portion of the

possible indications or contraindications for a new

drug or device.

Use of drugs and devices by physicians and patients, however, is not restricted to the approved

conditions. Although the manufacturer provides

only the approved information to physicians and

other providers, this information is in effect merely

advice. Nothing in the law prevents the use of drugs

or devices for conditions other than those specified.

(A bill before Congress, S. 2755, would restrict

distribution of drugs to particular providers. )

Uses of a technology for conditions other than

those approved by FDA are not necessarily inefficacious. Conceivably, some potentially efficacious

uses are not evaluated prior to initial marketing approval by FDA. However, the absence of a particular

use from the list of approved uses implies that sufficient information is not available to determine the

technology’s efficacy for that use.

Examples can be cited of beneficial uses that were

neither anticipated nor evaluated by the manufacturer but were later adopted by practitioners. Use of

the drug propranolol for treating hypertension (high

blood pressure) is such an example. Other unevaluated uses, however, have been shown to be medically unjustified when investigated after the drug or

device was marketed. For example, chloramphenicol

has often been used for upper respiratory infections

when equally effective and less toxic drugs were

available. The balance between positive and negative

effects of unapproved uses of drugs and devices is difficult to determine. One factor is clear—unapproved

uses usually have not been verified by the rigorous

clinical research that is necessary to gain FDA approval.

Allowing physicians to use technologies for unapproved uses has resulted in a de facto research or experimentation process. Formal clinical investigations

of a new use must proceed under an FDA-monitored

Investigational New Drug (IND) process for drugs

and under a similar process for devices. Unapproved

use by physicians and patients could be considered

an unofficial clinical investigation. This result can be

either beneficial if a new efficacious use is found or

harmful if the use is unsafe or ineffective. Also, aside

from the technical questions of efficacy and safety,

moral or human rights questions may be raised by

this unapproved application.

This third alternative would make FDA decisions

binding on physicians. Drugs and devices could be

used legally only in accordance with the indications

for use specified by FDA’s marketing approval.

Other uses would be allowed only as part of an approved IND or an investigational process for devices.

The investigational process for unapproved uses, the

mechanics of which could be similar to the current
process, could replace the present practice of unapproved use. A scientific process evaluted by FDA or

another agency charged with the task could add

validated indications or contraindications to the approved labeling for a drug or device. This alternative

is based on marketing approval, which is now limited

to drugs and devices; it would not cover medical and

surgical procedures.

The indications for use comprise one aspect of efficacy and safety, as noted above. Therefore, this

third alternative would be most effective if generally

accepted and comprehensive definitions of efficacy

and safety were developed. In addition, a publication

listing the FDA-approved indications for use of all

covered technologies might be necessary to inform

physicians who rely on these technologies.

The principal intention of this alternative is to improve the quality of medical care by ensuring more

appropriate use of medical technologies. Fewer patients would then be subjected to unapproved and

unscientific uses of technologies. Instead, medical

technologies would be more likely to be used in accordance with valid scientific information.

A probable consequence of implementing this

alternative would be an increase in premarketing

clinical investigation to determine appropriate indications for use, The number of such investigations

would depend on the proportion of potential uses

that had already been investigated.

This alternative could affect the timing of using a

technology for a new indication. Use of the technology for the new indication would not be permitted

until the experimentation process had been completed (although some use would obviously occur as

part of the experimentation process itself). However,

once a use had been demonstrated to be efficacious

and safe, the manufacturer would be allowed to

advertise that use. This advertising promotion might

result in diffusion of the new use to a larger number

of individuals in a shorter period of time than occurs

under the present system. However, if no firm or

other organization decided to conduct investigations

and seek approval for a particular condition of use,

that potential use might go undetected.

The financial costs of this third alternative are not

predictable. Additional clinical trials would increase

the costs of bringing a technology to market. The net

cost to manufacturers is not clear. They would bear

the costs of extra clinical trials, but might receive

revenue from addition sales if a new use gained approval. A system of financing additional evaluations

of efficacy and safety could be developed, possibly

through a combination of manufacturers, patients,

and third-party payers. Expenditures for the use of

many technologies might fall if third-party payers

and patients did not have to pay for unapproved

uses, But expenditures on new uses might rise.

Adoption of this alternative would require a system for ensuring compliance. One can imagine very

elaborate enforcement measures requiring additional

paperwork and specialized personnel that are not

readily available. A more simple approach would

rely on the good faith of providers. A provider found

to be noncompliant would be penalized, but compliance would otherwise be assumed.

The practicality of this third alternative is questionable. Although laws and regulations can mandate this alternative, their enforcement could be

cumbersome and expensive. Monitoring, let alone

altering, physicians’ use of medical devices and drugs

is difficult. In addition, the cost of enforcement might

exceed the benefits. At a minimum, however, enactment of this alternative might increase providers’

awareness of their legal liability in using technologies

for unapproved uses and might lead them to operate

within the approved investigational process. In fact,

approved uses might serve as a basis for liability.

Alternative 4: Link medicare reimbursement

to the information and judgments about a technology’s efficacy and safety that would result

from alternatives 1 and 2.

Medicare administrators have interpreted the provision of the Social Security Act limiting payment to

reasonable and necessary services as allowing medicare to withhold payment for experimental procedures whose efficacy has not been determined. It

was under this provision that medicare withheld payment first for CT head scanning and then for CT

body scanning pending evaluation of efficacy. Historically, medicare has denied reimbursement for

outmoded procedures rejected by the medical community. But medicare’s action on CT scanning used

efficacy and safety criteria to make a more controversial decision. And overall medicare policy supports strengthening the dependence of reimbursement on efficacy and safety. It is medicare’s policy to

restrict reimbursement for drugs to conditions of use

approved by FDA. FDA’s evaluation of devices

under the Medical Device Amendments of 1976 does

not yet provide a sufficient basis for medicare action.

For advice on procedures and devices, medicare continues to rely mainly on the Office of Health Practice

Assessment of the Public Health Service.

Although medicare policy links reimbursement to

efficacy and safety, major problems remain. As discussed in section 1, information on the efficacy and

safety of devices and procedures is insufficient for

reimbursement purposes. These deficiencies range

from inadequate clinical data through incomplete

syntheses of existing information to the processes
Appendix A. —Policy Alternatives ● 53

used in making judgments. The task of evaluation is

much beyond the present capability of the Office of

Health Practice Assessment. Besides an inadequate

information base, the Office has a small staff and no

formal process for evaluating technologies. FDA

labeling provides more available and useful information on drugs.

This fourth alternative suggests linking medicare’s

reimbursement for use of a technology to the information provided by alternative 1 and to the

judgments about efficacy and safety reached under

alternative 2. Medicare would not only refuse payment for a technology considered inefficacious or unsafe, but would also limit payment to conditions for

which the technology was deemed efficacious and

safe. The Office of Health Practice Assessment could

continue to advise medicare. It could secure the relevant evaluations, digest them for medicare purposes,

and point out areas needing further information. Alternatively, medicare could deal directly with any

new office established.

Theoretically, the same procedure could apply to

reimbursement under medicaid, but such a step

might require amending the Social Security Act. Although medicare officials have already decided that

the program has administrative authority to deny

reimbursement for new technologies, medicaid administrators are less certain of medicaid’s legal authority at the Federal level. States have the authority

to deny medicaid reimbursement and have exercised

that authority.

As a probable consequence of this fourth alternative, judgments about efficacy and safety would

affect the use of medical technologies. To the extent

that payment by medicare is important to hospitals,

physicians, and patients, all three groups would have

an incentive to follow the judgments made. As a result, this alternative could help prevent inappropriate

and harmful technologies from being introduced, diffused, and used, and could reduce expenditures on

them for medicare patients. At the same time,

however, this alternative is less intrusive than directly prohibiting the use of a technology. Providers

might use unapproved technologies, but would then

simply forego medicare reimbursement.

Substantial changes in the medical care system

could flow from this alternative. The traditional

process of third-party payment by Government

would change. Government has traditionally left

decisions of appropriate technologies and conditions

of use to practicing physicians. To the extent that

Government reimbursement exerts leverage on providers, this alternative would restrict the use of

technologies.

Implementing decisions at the local level to deny

reimbursement would pose difficult technical problems. Medicare already transmits to its carriers and

intermediaries instructions on particular technologies

and conditions of use for which reimbursement

should be denied. These medicare agents in turn have

the responsibility of informing providers and enforcing the restrictions. Because of the magnitude of

services involved, implementation depends primarily

on the good faith of providers and secondarily on

selected audits.

Billing practices, for example, make monitoring

the use of specific technologies difficult. CT scans

may be reported under the general category of radiological procedures. The present level of detail rarely

indicates specific drugs or their conditions of use. In

theory, Government agents adjust cost reimbursement for institutions to exclude costs of disallowed

technologies, such as CT body scans. If implementation of this alternative made these adjustments

too intricate and lengthy, the Government might

choose to drop cost reimbursement and switch to

payment by service, even in institutional settings.

This alternative could substantially lengthen the

time required to introduce an innovation into medical practice. As discussed in section 1, the mere existence of information and judgments might influence

the use of technologies. By denying Government

reimbursement for unapproved uses of technologies,

this alternative would give substance to those

judgments. Providers would be reluctant to adopt

procedures for which they and their patients could

not receive payment. And the longer time required to

introduce an innovation would apply to both efficacious and inefficacious technologies.

Linking medicare reimbursement to more systematic evaluations of efficacy and safety could occur

only as a gradual process and over a long period of

time. Clinical studies, syntheses, and judgments are

all lengthy undertakings. A practical approach

would be an incremental process of making reimbursement contingent on comprehensive evaluations

as they become available. Or in the case of new technologies, the Government could mitigate the problem of delay by screening and permitting reimbursement for those with the potential to save patients for

whom no efficacious technology exists. A new

surgical procedure, for example, might be reimbursed for patients suffering from an otherwise fatal

condition.

While a new technology is undergoing evaluation,

medicare could pay for it only in designated locations. The choice of centers would have to take into

account access for patients throughout the country.
These centers could provide data for evaluating the

technology; their participation in controlled clinical

trials could be a condition of their designation. These

trials could generate data for analyzing efficacy and

safety without widespread dissemination of the technology. This alternative might reduce innovation because it would make the process of innovation riskier

for developers of new technologies. If other thirdparty payers followed medicare’s lead and if this

policy affected use and sales of a technology, innovation could become more risky.

Another consequence of this fourth alternative is

that reimbursement would be withheld for patients

covered by governmental programs, but not for

other patients. Medicare and medicaid cover certain

subgroups of the population because they have

greater medical need or less ability to pay. Restricting

reimbursement for these patients would probably

result in their receiving different services from other

patients because marry medicare and medicaid patients would be unable to pay for their own medical

services. Such a consequence could protect these patients from harmful and inefficacious services, as well

as prevent their receipt of efficacious and safe services. Other third parties such as Blue Shield are starting to make payment contingent on efficacy. To the

extent that other insurers followed the same course,

medicare and medicaid patients might not be restricted more than other patients with insurance.

The Department of Health, Education, and Welfare is already linking reimbursement and efficacy

through administrative action, as discussed in

chapter 6. DHEW’s decisions, then, may make congressional action superfluous,

Alternative 5: Expand regulation of capital expenditures to cover purchases of medical equipment regardless of setting or ownership.

Under the provisions of the National Health Planning and Resources Development Act (Public Law

93-641), capital expenditures over $150,000 are subject to certificate-of-need review only if made by

specific medical care facilities. These facilities include

hospitals and certain categories of ambulatory care

facilities, but exclude private physicians’ offices.

Similarly, section 1122 of the Social Security Act applies to capital expenditures over $100,000 only if

made by the same types of facilities. Therefore,

unless State certificate-of-need laws authorize such

regulation, purchases of equipment by physicians in

private offices are not subject to review by planning

agencies. At the end of 1977, the laws of only seven

States covered physicians’ offices.

These State laws encourage circumvention of the

regulatory process by treating the same kinds of

equipment differently, depending on ownership or

setting. Physicians and other individuals may lease

or purchase capital equipment, such as a CT scanner,

place it near a facility that is regulated, and be exempt from review. To the extent that the national

guidelines issued under Public Law 93-641 increase

the stringency of criteria for regulated providers, the

guidelines will further induce placement of equipment in unregulated settings.

Incomplete coverage of capital expenditures may

foil the plans developed by local agencies. A planning agency may decide that a certain number of CT

scanners is appropriate for its area and approve that

number of applications from regulated providers.

Purchase of scanners by other unregulated providers

would counteract the local plan, but would lie outside the planning agency’s jurisdiction.

This fifth alternative suggests amending current

laws to cover capital expenditures over a certain

amount, regardless of the ownership or setting where

the equipment is operated. A planning agency would

then have more complete control over the number

and distribution of such equipment in its area. By expanding the regulation of capital expenditures to

cover providers such as physicians’ offices that are

now exempt, the alternative would remove the present incentive for providers to place equipment in unregulated settings. This alternative would not give

preference to one setting or form of ownership over

another. Planning agencies could still set priorities

among applications and exercise discretion over the

placement of equipment. (Two bills, S. 2410 and S.

2551, that would so amend Public Law 93-641 are

now before Congress. ) The Social Security Act and

the National Health Planning and Resources Development Act differ in the amount of the expenditure that triggers coverage. Legislation could make

these amounts uniform, but that is an issue separate

from this alternative,

The broadening of the planning provisions under

this fifth alternative would necessitate arrangements

for physicians to have access to available equipment.

Since laws now generally apply to hospitals, any new

problems of access would be limited to ambulatory

patients; these patients could be transported between

facilities. Many planners already include sharing of

services in their criteria (see ch. 4). Ensuring access to

equipment for physicians might require changes in

the legal liability that a medical practice bears. A

practice, which is now responsible for its own staff

physicians, might otherwise become responsible for

the actions of other physicians who are using the

facility’s equipment,

Implementation of this fifth alternative would increase the workload of the regulatory process, The

total number of purchasers of equipment covered by
Appendix A. —Policy Alternatives ● 5 5

the law would increase substantially, with a probable

rise in the number of certificate-of-need applications.

Administrative costs of capital expenditure regulation would increase accordingly. To the extent that

newly regulated purchasers of medical equipment required additional personnel time to apply for certificates of need, their costs would also rise. One

should note that regulated providers already bear the

cost of applications.

An increase in the level of regulatory activity could

also slow the diffusion of new medical equipment.

The implications for quality of care are unclear, since

del ay would affect efficacious and inefficacious

technologies alike. Likewise, the effect on expenditures for a given technology is difficult to determine.

The certificate-of-need process may deter some potential purchasers. Later purchasers of new products

may benefit from lower prices as a result of competition or decreased manufacturing costs. Or they

may face higher prices due to inflation, increased demand, or product development.

A related issue is the effect of this fifth alternative

or any such regulation on total capital expenditures.

Practical limitations of time and money require a

minimum expenditure threshold for certificate-ofneed review. But it has already been observed that

regulated providers such as hospitals shift their

capital expenditures to less regulated technologies.

Such substitution is sometimes possible within the

same category of equipment; some models of CT

scanners sell for less than $100,000. This situation is

part of the larger context wherein a new technology

is not necessarily substituted for another. Rather the

new are typically added to the store of existing technologies. This alternative, then, will not in itself limit

either total capital expenditures on medical equipment or expenditures on the use of that equipment.

3. Financing Methods

The financing of medical care influences use of and

expenditures for technologies through incentives to

providers and patients and through restrictions on

coverage and payment. The Federal financing programs, medicare and medicaid, have largely continued the reimbursement methods that prevailed in

the private insurance field (see ch. 6). Payment by

these programs to hospitals on the basis of costs incurred, and to physicians on the basis of charges, has

resulted in an open-ended commitment by these Federal programs to finance the use of covered services.

In the course of financing medical care, public and

private third-party payers have restricted the extent

of coverage and payment. They have, in effect, defined the product for which they will pay. Medicare

and certain private third parties in some cases have

limited coverage to efficacious technologies. On that

ground, medicare refused payment for CT body

scans. (Setting maximum rates of payment for certain

services are more widespread. Medicaid, for example, has placed ceilings on its reimbursement for

drugs, and most third parties place some limits on

their payment of physicians’ charges. ) Ironically,

Federal financing—like health insurance in general—

has encouraged the use of services such as CT scans,

but not efficient methods in their performance or

their substitution for other services. No restrictive

mechanism such as a finite budget induces providers

to make tradeoffs between increased information or

benefit and increased costs from using technologies.

On the contrary, financing methods reward with

higher revenue those providers who perform additional services, regardless of their marginal value or

efficient performance. As a result, providers have little incentive to choose among alternative procedures

or to perform services efficiently. Prevailing thirdparty payment thus insulates providers as well as patients from the financial consequences of using

technologies.

Contained in this section are two alternatives to

address problems with current financing methods.

Under the first, medicare and medicaid would continue to use costs or charges as the basis for reimbursement, but would base their rates on efficient

methods of performing services. The second alternative would fundamentally change the payment

method in order to create incentives for providers to

become cost conscious in using and producing

medical services. Although the alternatives in this

section are mutually exclusive, either could be combined with alternatives from the previous sections on

information and regulation.

Alternative 6: For services paid by medicare

and medicaid, establish rates of payment that

are based on efficiency.

The Department of Health, Education, and Welfare has set limits on routine hospital operating costs

and charges of drugs payable under medicare and

medicaid, respectively. However, reimbursement

limits on routine hospital costs are only very generally related to efficiency of operation. And with

routine costs of a hospital day limited, hospitals have

a strong incentive to allocate costs as much as possible to ancillary services, which are often not limited.

These policies give providers who receive cost

reimbursement little incentive to be cost conscious in

their services and production methods. As a result,

governmental payments probably exceed those that

would result from limits based on a tighter definition

of efficiency.
Similarly, reimbursement to physicians is based

not on standards of efficient operation, but on

charges prevailing in a given area. Nor does governmental policy coordinate payments to hospitals and

physicians’ offices to ensure comparable payment for

comparable services. Medicare, for example, could

pay different amounts for the technical component of

an ambulatory CT scan depending on the setting

where it occurred, And the charge for that service in

a physician’s office is typically higher than its cost in

a hospital.

Under this sixth alternative, rates of payment

would be based on the basic costs necessary to operate a facility or piece of equipment at an efficient

level. Soliciting bids from manufacturers might be required to lower purchase prices of equipment. To

make payments consistent for comparable services

that are based on charges in one setting and on costs

in another, fee schedules would be developed for

services paid by charges. Fees paid to physicians

would also be based on costs using efficient methods

of operation. To that basic amount would be added

a predetermined profit margin to arrive at the

allowable fee, This alternative could apply to all

payers or all third-party payers, not just medicare

and medicaid. In that case, the alternative would entail the establishment of national ratesetting for

medical services.

Under this alternative, medicare and medicaid

would not pay for inefficient methods of operation or

for high profits. Rates could be reviewed to enable

medicare and medicaid to take advantage of changes

that had resulted in lowered costs, such as reductions

in prices of equipment or improvements in methods

of operation. Of course, changes in these factors

could lead to increases in rates as well as decreases.

Under the assumption that medicare and medicaid

payments exert a degree of leverage over providers,

these federally set rates could encourage the performance of services in ways considered desirable by

the Government. The relative rate structure for different settings, different tests, and different types of

physician specialists could provide incentives favoring one over another. For example, the Government

could establish rates for CT examinations and alternative diagnostic procedures, such as arteriograms,

that would encourage the relative level of use of each

test that was considered desirable. If all physicians

were considered equally capable of reading CT scans,

all could be reimbursed at the same rate. If some were

considered capable and others not, reimbursement

could be limited to those considered capable.

Considerable technical expertise would be needed

to set, monitor, and review rates under this sixth alternative. For both hospitals’ and physicians’ rates,

the Government would require experts with detailed

knowledge of such factors as budgets, methods of

performing services, and types of equipment. Also,

to set fees and monitor costs, hospitals and physicians would have to adopt uniform methods of

recording and reporting their costs. (Public Law

93-641 mandated the development of uniform accounting and reporting, and Public Law 95-142 required uniform reporting for institutions. ) If payment under medicare and medicaid were based on the

efficiency of services provided, hospitals would have

to apportion costs to specific services, not to departments or functions as is currently done.

Whether the ratesetting described here would result in lower net expenditures on medical services is

not clear. Rates would probably be lower for medicare payments, but total expenditures would not necessarily rise more slowly or decline absolutely. Other

governments, such as those of the Canadian Provinces, have found that rates of use and therefore total

expenditures have risen when rates of payment were

held fixed. The costs of hiring the new technical

experts required would also add to government expenditures. Despite the time and expense involved,

this alternative would not necessarily lower payments under medicaid. Since 1972 when the law was

amended, medicare’s definition of reasonable costs

for hospitals has been a maximum limit for medicaid

payment; many States pay less. Medicaid’s limits for

physicians’ services are also typically below those of

medicare.

Certain adverse consequences might result if medicare rates paid to physicians were reduced below

their current levels. For example, fewer physicians

might be inclined to accept assignment for medicare

patients (acceptance of medicare rates as full payment); the rate of assignment is already falling. In

such circumstances, medicare patients with some financial means could pay the difference between

physicians’ charges and medicare’s allowable fee, But

patients with less ability to pay might have to rely on

physicians with lower charges.

Overall, ratesetting entails detailed consideration

of each service, the method of performing that service, and the profit margin. This course of action

would be time-consuming and expensive for providers and governmental agencies alike. Implementing this sixth alternative might result in the Government’s questioning in detail how medical services are

provided. Furthermore, ratesetting would not affect

the incentives of present reimbursement methods that

encourage additional medical services, such as diagnostic tests, regardless of their marginal value.

Alternative 7: Fundamentally restructure the

payment system to encourage providers to perform and use medical services efficiently.
Appendix A. —Policy Alternatives ● 57

Present retrospective payment of costs and charges

and fee-for-service payment contain perverse incentives, as discussed in alternative 6. These payment

methods, used by public and private third parties and

by self-payers, reward physicians and hospitals with

higher revenue when they provide additional services. This result occurs regardless of whether the

services substantially improve patient care or

whether they are produced efficiently. Medicare, for

example, pays for a CT head examination regardless

of any other neurodiagnostic tests that have been

performed and the information that may have been

gained from them.

This study has identified the incentives of the present reimbursement system, but has not systematically analyzed possible changes in that system. This alternative, then, suggests a general restructuring of

payment methods, but does not propose a definite

substitute. The altered payment system would contain incentives for physicians and hospitals to provide appropriate care and to do so efficiently, instead

of present incentives that conflict with these goals.

Rather than control rates of payment for each service

as in alternative 6, this alternative would indirectly

or directly fix the total revenue of a provider in advance of the delivery of medical care. Payment by

cavitation (per person) would do so indirectly, while

review of providers’ budgets would fix that revenue

directly.

The consequences of a restructured payment system would depend on the specific plan put into effect.

Nevertheless, certain generalizations are possible.

Limiting total revenue would both enable and force

providers to make choices among alternative services

and among alternative methods of performing those

services. Within the predetermined revenue, a provider could choose which services to perform and

how to perform them. With total revenue limited, for

example, a hospital’s administrator and physicians

would decide whether to operate a CT scanner, how

many scans to perform annually, which patients to

scan, and how to combine CT scans with other

diagnostic procedures.

Furthermore, physicians and hospital administrators rather than Government would make the

decisions. The Government would set the cavitation

payment or budget limit, but would not become involved with production methods, use, or payment

for particular services. Providers could consider the

cost implications of their actions, choose services to

provide, and determine how to perform those services. The factors that physicians and hospitals weigh

when making decisions would undoubtedly undergo

great change. Additional services would no longer

automatically increase their revenues and might even

decrease their incomes by increasing their costs.

This seventh alternative could pertain either to

Federal financing programs alone or to all payers of

medical care. However, if only medicare and medicaid limited their payments, a provider could increase

costs and charges and generate additional revenue

from other third parties and self-payers. The alternative could also cover either hospitals or physicians.

But some services that are performed in both

hospitals and physicians’ offices, such as ambulatory

CT scans, are often substitutes for each other. If

revenue were limited only for hospitals, one would

expect payments to rise for nonhospital providers

whose revenues were not limited. Although this

alternative would clearly be most effective if applicable to all payers and providers, such an approach would represent a major policy decision.

Private payers could, of courser follow any Federal

lead. This alternative would also be compatible with

national health insurance, for the Federal Government would then be the major payer of health care.

Calculating cavitation levels or revenue limits

would require the responsible Government office to

have much technical expertise. Experts would have to

identify variables that cause costs to differ among

providers or consumers and adjust payment levels

accordingly. (Such efforts have not proved very successful in the past. ) Governmental experts would also

have to review rates periodically. The ways in which

rates changed would greatly influence total medical

expenditures. For example, a system of basing the

rate of change on an indicator within the medical

care system could simply accept and transmit increases with a lag of 1 year. Rate changes could be

based on broader economic indicators, such as the

GNP deflator, which would not necessarily be selfgenerating, But broader indicators might be insensitive to changes specific to the medical care sector.

Although the changed payment system would

create an environment with different incentives, this

seventh alternative would not necessitate substantial

changes in the way providers are organized. Providers could continue to deliver medical care under

current practice arrangements. Compared to the current situation, the new environment would enhance

the competitive position and perhaps stimulate the

growth of health maintenance organizations (HMOs)

and other providers currently paid by cavitation,

Such groups now compete for physicians, supplies,

and enrollees with providers who gain more revenue

from the provision of additional services. If cavitation payment or budget limits applied to all providers, all would have similar incentives and be sub-
ject to similar restrictions under the payment method. But the relative position of providers now paid

by cavitation would be improved if others faced

some limit on their total revenue.

The presence of different incentives would affect

the kind of medical care delivered and expenditures

on that care only over a long period of time. Similarly, any effect on the nature of medical care delivery

and the strength of HMOs would occur over several

years.

Changing payment to providers as described in

this seventh alternative would be compatible with

regulatory programs of certificate-of-need and utilization review, and might make these programs even

more valuable than at present. Under this alternative, providers would have an incentive to underserve patients in order to stay within their budgets.

Minimum standards of appropriate use might have

increased importance in this new context. Utilization

review under the PSRO program currently applies

only to medicare and medicaid patients, as described

in chapter 5. To prevent providers from economizing

on service to nonmedicare and nonmedicaid patients,

PSRO review could be broadened to cover all patients. Such an expansion of the PSRO program

would represent a major policy decision and would

substantially increase PSRO regulatory activities and

administrative costs. Utilization review might also

guard against the tendency of providers to consider

costs exclusive of benefits in order to meet their

budgets. Standards of appropriate use would thereby

function as a counterweight to the possibility of increased cost consciousness by providers.
Appendix B.— Research and Development of CT and

Other Diagnostic Imaging Technologies

The computed tomography (CT) scanner was developed with little involvement of U.S. Government

research agencies. Nonetheless, Federal support for

R&D of the CT scanner has been substantial in the

past. It is clear that this support has decreased significantly and steadily in the past few years (23,110).

Meanwhile, private industry has assumed an increasing share of further basic R&D of CT scanners.

The National Institutes of Health (NIH) has been

the major source of Federal funding for R&D of CT.

Of the Institutes, the National Cancer Institute (NCI)

has been the most active, supporting an estimated

total of over $4 million in CT-related research projects over the past several years. The last major project funded by NIH (NCI) concerned with developing

technological improvements in CT scanners, however, terminated in April 1978: This extramurally

supported research yielded the fixed-detector geometry type scanner developed by the American Science

and Engineering Co. (AS&E) (1 10).

Currently, most CT-related research funded by

NIH is concerned with new and improved uses of CT

scanners and/or applications of CT scanning. The

funding levels of current projects, however, are much

more modest than those of earlier projects concerned

with basic R&D of CT itself. More importantly, NIH

resources currently being allocated to CT pale in

comparison to NIH moneys being allocated to the

R&D of other imaging technologies.

For example, NIH is currently supporting basic

R&D of the dynamic spatial reconstructor (DSR) imaging system; positron emission transaxial tomography (PETT); and zeugmatography, or the application

of principles of nuclear magnetic resonance (NMR) to

imaging techniques, In addition, ultrasound (which

much preceded CT historically) continues to be researched at NIH for improvements in the technology

itself, as well as for new and improved applications.

Theoretically, the imaging capabilities of some

of these new technologies exceed those of CT. Some

of these technologies may also be safer than CT, because they do not use ionizing radiation. Given these

advantages, the development of these technologies

and their eventual emergence into clinical use could

play a decisive role in the future of CT scanning.

One trait that the new technologies (in particular)

have in common with CT that might dampen this potential effect, however, is their costliness. In some

cases, their estimated cost not only rivals, but exceeds, that of the most advanced CT equipment currently available.

Consequently, these emerging technologies will

soon face many of the Federal policies established in

the wake of the introduction, diffusion, and widespread use of CT scanners. Just how these expensive

—but nonetheless, miraculous—technologies will

fare when they encounter Federal policies toward the

evaluation, diffusion, and reimbursement of new

high-cost technologies will be interesting indeed. The

field of diagnostic imaging is already a large and expensive one, as shown in tables B-1 and B-2.

Table B-1.–Overview of Diagnostic Imaging in the United States (1977 and 1980)

—

Number of Number of procedures ‘

- ‘-

(millions) Costs (millions) hospitals with --– –.. ---–- —–— —--—-–—-— --– .—–-—— -–- -—- –-

capability 1977 1980 1977 1980

Diagnostic X-ray. 7,000a

158b171b

$5,300 b

$7,60 0

c

CT scanning 1,OOOC 1-1.4C 3.4C

$300d$875 cd

Nuclear medicine. 3,300e

8.2f11.1b$800f$1 ,250b

Ultrasoun d All Approximately 4g

na $360g

aThls is the apprommate number of hospitals In the United States It IS assumed that all have such equipment

—

bEst[mates of Bureau of Radlolog]cal Health 186) The diagnostic X.ray figures Include dental XraY

COTA est!mates

dTh, s f,gure ,$ Partlal[y offset by reductions In other dlagnost[c procedures Estimates are presented In OTA’S 1978 CT rePort

11291

‘American Hospital Association Hosp(tal S(a(/st/cs 7978 Ed/t/on (Chicago, Ill 1978)

fL Russell Technology ,n Hospl(a/s (1461 Russell s 1975 estimates are extrapolated to 1977

gNo rellable figures are ,aVallable The State of New York survey of Rochester N Y If projected nationally, would Indicate 76

mfltron procedures In hospttals alone (29) Sources In the Bureau of Radtologlcal Health cite Informal estimates of 1 4 mill (on

procedures In 1979 excludlng obstetrical use (a large Componf?ntl, but also !nd!cate that that est!mate seems too (OW Ultra

sound use IS growing rapidly The Stanford Research Institute estimates 12 m I [lion to 14 ml Illon procedures In 1979 growing

to over 125 mill on In 199011 63)

NOTE Estimates are approximate for dlustrat]on only The Bureau of Radlologlcal Health IS presently beglnnlng a survey of

125 hospitals to determine the rates of use of dlagnosllc X r~y, ultrasound, and nuclear medlclne This study WI I give

much more conclusive figures than those shown above
Table B-2.-Sales of C* Diagnostic Imaging Equipment in the United States, by Year (1977-83)

Sales (millions of dollars)

.

1974 1975 1976 1977 1981 1982 1983

Diagnostic X-ray. . . . . . . . . . . . . . . . . . $265’ $300b

$230b$280b$375b

CT scanning . . . . . . . . . . . . . . . . . . . . —

—.

100b

12ob 160b 2 0 0

b 

Nuclear medicine. . . . . . . . . . . . . . . . 40 C — — 100d —

Ultrasound . . . . . . . . . . . . . . . . . . . . . 65a — — 160e — 269f

$490e

NOTE The validity of the sales fig~les IS not known They are undoubtedly rough They are Included here as general indicators only The Stanford Research Illstltute

estimates expenditures for diagnostic lma91n9 equlprnent, sumlles, accessories, and rn’lnten’flCe Of $’2 bllllon In 1978, rlsln9 to almost $65 bllllonIn 1990 (163)

SOURCES

aE/ectr/ca/ News Mar 29, 1976, p 59 dE/ectrtc Business, May 1979, P 66

bE/ecfron/c, Jan 5, 1978, P 148 eJ E/cc Eng, November 1979, P 14

f,nst Tech April 1978, P 18 cpredi 88, May 1531973, P 24

Basic and Applied Research on CT

Current CT Scanners

Since the publication of the 1978 OTA report on

CT scanners (129), the technical capabilities of CT

scanners have increased as new models have been developed. This increase has expanded the potential

usefulness of these scanners. The new scanners offer

technically improved image resolution, largely by

virtue of reduced scanning times and the consequent

minimization of problems associated with patient

motion. The scan times of the most recent CT scanners are less than 5 seconds for a single cross-section

image. The most recent scanners are capable of

achieving image resolution of as little as 0.61 mm (see

table B-3).

The scanners listed in table B-3 were developed privately with the exception of the AS&E scanner.

AS&E received considerable Federal support from

NCI of NIH ending in April 1978 (22). AS&E, however, only sold a few of the new scanners. In January

1978, Pfizer, Inc., made an agreement with AS&E to

purchase the rights to market and produce the scanner. Using the AS&E gantry, Pfizer made certain

technical modifications (primarily in the electronic

computer of the scanner) and now markets a hybrid

of the AS&E scanner known as the 0450 Pfizer/

AS&E scanner. The scanner has a price tag of approximately $650,000 to $700,000. According to the

‘The term ‘generation” IS often ,ipplled to describe the type O( scanner

The first scanners to be developed all used a stmllar approach, and have

often been labeled ‘ first ~enerattc)r ,‘ The prtmary mean]n~ of the phrase

was to ]ndlcate that that type of scanner was the t]rst to be developed, However, there is an Inevitable Impress ion conveyed that the ‘second gcmera -

tlc~n” IS super]or to the ‘ first genera t [on. ‘ For this reason, OTA, In consultation with the manufacturers, has a(’cepted labels that are more descriptive

and not as m]sleadln~, In particular, this was done because what has been

called the ‘t(mrth ~eneratlon ” scanner IS not superior to the “third ~enera -

tt(m” scanner acc<)rdln~ to both the National Electrical Manufacturers

Asw)clatton and the Bureau of Radlolo~lcal Health ot the Food and Drug

Admlnlstratlon. The columns ]n table B-3 are in order of development, with

those scanners w)metlrnes called “third generation’ and “fourth genera tlonf’

t(>gether In the column labeled “rota e-only.

Food and Drug Administration (FDA), 13 of these

scanners were reported to be sold in the United States

between June 1978 and 1979 (95).

The Dynamic Spatial Reconstructor

Development of the DSR imaging system at the

Mayo Clinic is currently receiving substantial NIH

support (23). The DSR system adds the critical dimension to computerized tomography that is necessary for accurate imaging of moving organ systems

(such as the heart and lung) and for studies of threedimensional anatomy and circulatory dynamics in all

regions of the body (88). These capabilities are dependent on the development of high-speed electronic

data processing and digital computing techniques

which is an integral part of the R&D of the DSR

system (23).

Developers of the DSR system do not believe that

it represents an extension of previous CT scanning

principles and logic. They are reluctant to call it an

advanced CT scanner (67). The DSR system does use

X-ray (as does CT): But whereas CT is capable of

producing only a 2-mm thick cross-section at a scan

time of just a few seconds, the DSR when completed

will be able to scan up to 240 l-mm thick crosssections in 11 msec, repeat the complete scan procedure at intervals of l/60th of a second, and

reconstruct the entire three-dimensional volume of a

whole organ, as well as dynamic changes in shape

and dimension of moving structures (88). The principle components of the system are shown in the illustration below (see figure B-l). The DSR is described

as follows (88):

. . . A set of 28 rotating-anode X-ray sources, independently controlled, is arranged around a semicircle

whose radius is 143 cm. Abutting this arrangement is

another semicircle that contains 28 independently

controlled image intensifiers and image isocon cam-
Table B-3.—Typesand Models of CT Scanners(1980)

Motion of gantry:

Scanners no Ionger available

commercially in the United

States as new equipment

Current models

Scanners-announced but not

yet available commercially

Rotate and translate,

dual detector

4-6 min scan time

Single pencil beam X-ray

source

2 detectors

Source and detectors traverse gantry in parallel, gantry rotates through small

angle, process repeats,

EM I Mark I

General Electric Neuroscan

CT/N

PfIzer0100

Siemens Siretom

SOURCE National Electrical Manufacturers Association 1980

eras. These two semicircles make up one circle of

equipment. Inside the circle is a 30 cm-wide flourescent screen, bent to form a semicircle with a 58-cm

radius. The 28 Image intensifiers and image cameras

produce 28 images on the flourescent screen .

, . . The entire assembly—X-ray sources, flourescent screen, and video camera chains—is mounted on

a cylindrical gantry, which is rotated at 90 degrees per

second about a horizontal axis. Each X-ray source is

pulsed on sequentially to irradiate the patient for 350

seconds. Simultaneously, the image intensifier and

video camera for each X-ray source are activated to

record the image on the flourescent screen. The heavy

reliance on image intensification lowers, in effect, the

X-ray dosage to levels no greater than those now employed for X-ray for X-ray procedures in general medical practice .

Rotate and translate,

multiple detector

20 see-2 min scan time

2 or more pencil beams or

Single fan beam X-ray

source

3-60 detectors

Sources and detectors

traverse gantry in parallel,

taking more readings and

rotating through larger

angle than dual detector.

Elscint 850

EM I CT 1010

EM I CT 5005

EM I CT 7020

Ohio-Nuclear 25

Ohio-Nuclear 50

Ohio-Nuclear 50FS

Picker TR-120

Philips Tomoscan 200

Syntex System 60

Syntex System 90

Toshiba TCT-10A

CGR ND 8000

Elscint 905

Hitachi CT-W

Ohio-Nuclear 100

Omni Medical 4001

Pfizer 0200FS

Toshiba TCT-30

Rotate only

Under 5 sec scan time

Single fan beam X-ray

source

Hundreds of contiguous

detectors

Rotation motion only. In some

models, source and detectors move together; in other

models only source moves.

AS&E 500

Artronix 1100

Artronix 1120

EM I 6000

EM I 7070

Searle Pho/Trax 4000

Siemens Somatom I

Varian V-360

General Electric CT/T 7800

General Electric CT/T 8000

General Electric CT/T 8800

Ohio-Nuclear 2005

Ohio-Nuclear 2010

Ohio-Nuclear 202 0

Omni Medical

Pfizer 0450

Philips Tomoscan 300

Picker Synerview 300

Picker Synerview 600

Siemens Somatom II

Toshiba TCT-60A

CGR CR 10000

Philips Tomoscan 310

The DSR system, somewhat reduced for funding

reasons, is currently being tested on animals on a limited basis. Researchers estimate it will be at least 2 to

3 years before it will be used to scan the first patient.

At this time, it is being developed for medical research purposes, and not wit h an eye towards mass

clinical application (67). The system will cost about

$5 million, and might cost $3 million in mass production (34). The ultimate use of the multimillion dollar

DSR system in the practice of medicine is viewed as a

tertiary, or even a Quarternary tool, with perhaps 5

to 10 serving the entire country (67,83).

NIH has been the primary supporter of R&D of the

DSR imaging system. The National Heart, Lung, and

Blood Institute (NHLBI) has been the major source of
62 . Policy implications of the Computed Tomography (CT) Scanner An Update

28

Image

Figure B-1 .—Principal Components of the DSR Imaging System

I

High-speed

reconstruction

1

sources

Video tape

recorder

SOURCE :IEEE Spectrum, January 1979, p 77

funding for this project since one of the major objectives is to permit accurate measurement of the structure and function of the diseased and normal heart

(144). NHLBI support totals about $2 million over

the past few years for development of the imaging

device itself. Development of the high-speed computer system necessary to the device has been supported by the Division of Research and Resources

(DRR) of NIH, which has spent about $1 million during fiscal years 1978 and 1979 (23).

Research on Applications of CT

It is difficult to compile an inclusive listing of projects related to the applications and uses of CT scanning at NIH. First, since such projects are organized

by disease and organs as the Institutes are, identification of CT-related research is difficult. Secondly,

even when such projects can be identified, it is difficult to determine the proportion of moneys that

should be apportioned to research on CT. Without a

formal survey of the Institutes, therefore, precise

estimates of such projects and their funding levels are

unavailable. Consequently, the projects discussed

below are meant only to indicate the kinds of ongoing research being supported by NIH, Similarly, the

accompanying dollar figures are provided as a rough

i ’

.

computer I

I

interface .

I

estimate of current Federal investments in this type of

CT-related research project.

Formerly the major NIH backer of research (on CT

scanning, NCI spent only approximately $75,000 in

fiscal year 1979 on research for scanner development

(11), In addition, however, NCI spent approximately

$400,000 in that year for CT-related studies with

such objectives as developing better contrast agents

and new algorithms for diagnostic use to reduce radiation exposure (110). Also, in that year, NHLBI supported some extramural research grants involving the

use of CT scanners in diagnostic methods for particular cardiac diseases (110), DRR, a major funding

source of the DSR imaging system discussed above,

also supported about 15 projects involving the use of

CT scanners through its biomedical research support

program: These few projects, however, are very

modest totaling approximately $65,000 in fiscal year

1979. In addition to this research, about 3,000 patients per year are scanned in the NIH Clinical

Center. Most of these represent patients who are on

protocols requiring a CT scan (110).

The major project at NIH related to the application

of CT is funded by the National Institute of Neurological and Communicative Disorders and Stroke

(NINCDS). In fiscal year 1979, the Institute funded a

$500,000 project investigating the use of CT scanning
in the diagnosis of head trauma (110). The Institute

also had supported about $50,000 in intramural research projects related to the use of computed head

tomography for diagnosis of diseases particularly

relevant to it, such as brain tumor (110).

In conclusion, although there are still many initiatives at NIH related to applied, as opposed to basic,

research on CT scanners and scanning, the cumulative resources devoted to these activities do not begin

to approach the levels of funding for the ongoing development of the DSR system, for example. At this

time, the Federal Government is not a significant

contributor to R&D of CT scanners and scanning: Its

time has come and gone. Instead, Federal support of

biomedical R&D is concentrated on new imaging

technologies.

Emerging Imaging Technologies

There are a number of new technologies and technological applications in the imaging field that hold

great promise for medical research and eventual clinical application. These will not be covered in detail.

However, there are two new technologies that are

particularly exciting and at the same time raise many

of the same policy issues characteristics of CT scanners. These are PETT and zeugmatography, or the

application of principles of NMR to imaging techniques. Various Institutes at NIH are supporting

R&D of both of these imaging techniques, and there

is considerable private (worldwide) R&D investment

being made in them as well.

There are now only a few PETT and NMR scanners throughout the world, and these so far have

been limited to experimental clinical use (with human

patients). However, the unique capabilities and attributes of these two imaging techniques have generated a great deal of excitement in the medical research community, and the possibilities for clinical

application have sparked even greater enthusiasm for

these technologies. Speculation regarding their role

in clinical practice, associated operational costs, and

commercial viability has already captured the attention of the media (83,96). One reason for excitement

is that these two technologies may provide the means

to image tissue function, whereas present CT and

ultrasound techniques provide the means to image

tissue structure.

The excitement, enthusiasm, and speculation surrounding these technologies has also drawn the attention of the Office of Health Regulation of the Health

Care Financing Administration (HCFA), and the National Center for Health Care Technology (NCHCT)

of DHHS (143). For example, NCHCT is preparing

an overview paper on NMR that reviews the efficacy,

diffusion, and utilization questions surrounding the

introduction of new medical devices (73). It appears

that PETT and NMR have already been flagged by

these two Federal agencies, and that if and when they

are ready to be introduced into medical practice,

these technologies will undoubtedly be subjected to

Federal policies toward the evaluation, diffusion,

use, and reimbursement of high-cost medical technologies—many of which were formulated around the

CT scanner. ’

Positron Emission Transaxial Tomography

PETT is the latest of several radionuclide imaging

systems belonging to the family of nuclear medicine

techniques. Although ionizing radiation is used in

PETT, the technology differs significantly from CT

in principle and in capability. A PETT scanner may

be briefly described as “. . . a large, computer-controlled tomography unit that maps the distribution of

positron-emitting pharmaceuticals in order to construct detailed images of organ metabolism, physiology, and function” (96).

In the PETT scanning procedure, radioactive isotopes of elements such as oxygen, carbon, fluorine,

and nitrogen are administered to the patient, usually

by injection, but also sometimes by inhalation. This

is in contrast to the manner in which CT scanners

(and conventional X-ray techniques) expose the patient to ionizing radiation by means of an external Xray tube. The radionuclides are administered as

metabolically active compounds, such as glucose, or

as naturally occurring compounds, such as carbon

monoxide, which may be used as tracers. The images

produced by PETT scanners are based largely on the

detection of the distribution of the radioactivity

through body tissue. Reconstructed images produced

by PETT scanners, therefore, may reflect compartmentalized localization, flow, or biochemical and

metabolic activity, whereas CT scanners basically

detect and display anatomical structure, although the

use of iodinated contrast media may give significant

functional information. The difference in information presented in a comparable cross-section of the

brain produced by these two technologies is illustrated by the fact that while CT scans of a cadaver

and a live human would show a similar image, a

PETT scan of a cadaver would show a relatively

blank screen image in comparison to the scan of a

live human, since due to lack of flow, the radioactive

material would not have been transported (143).

‘The memorandum from the Otf]ce (~t Health Regulation In HCFA su~-

~ests that local health systems a~encles and State health plannln~ and

development a~encles be alerted to the ]mpendln~ ]ntroductlon of these two

technologies as well t 143)
Ter-Pogossian and his coworkers (175) have recently described PETT as follows:

In this technique a chemical compound with the desired biological activity is labeled with a radioactive

isotope that decays by emitting a positron, or positive

electron. The emitted positron almost immediately

combines with an electron, and the two are mutually

annihilated with the emission of two gamma rays. The

two gamma rays fly off in very nearly opposite directions, penetrate the surrounding tissue and are recorded outside the subject by a circular array of detectors. A mathematical algorithm applied by computer

rapidly reconstructs the spatial distribution of the

radioactivity within the subject for a selected plane

and displays the resulting image on a cathode-ray

screen . . . . With suitable interpretation PETT images can provide a noninvasive, regional assessment

of many biochemical processes that are essential to the

functioning of the organ that is being visualized.

NIH investment in the basic R&D of the use of positrons for imaging which led to PETT has been considerable, amounting to almost $9 million in grants

to one research center alone over an 18-year period

(143). Significant support of PETT continues and is

projected for the next few years. For example,

NINCDS initiated a series of new PETT projects in

1979. In the first year of support, the Institute spent

$5.9 million in grants to establish five universitybased neurology centers of research around the country and the construction of a positron emission tomography scanning instrument in each (151). Continued grant support for these centers is projected for

the next 3 years. The Institute’s interest in PETT

stems from the expectation that PETT will enable

physiological research of cerebral metabolism just as

CT enabled research of cerebral vascular anatomy

and flow (151). Thus, the purpose of research on

PETT by the Institute has been to understand normal

brain biochemistry and metabolic disorders and to

study the effects of lack of oxygen, various pharmaceuticals, trauma, and varieties of stress on neural

tissue (151).

There are probably more than 20 experimental

positron emission scanning devices in the world at

this time, half of which are located in the United

States at 10 different locations: At least three more

PETT devices are scheduled for installation (all at

U.S. locations); these are also to be used for experimental purposes (143). 3 In addition to the investigation of brain functions PETT scanning is also being

used for a variety of other research purposes, most of

IAS ot August 1980, I’ETT scar ners are located at Washington Umverslty

(2), Massachusetts General Hospital (2), UCLA, Unlvers]ty of Mlaml’s

Brookhaven Laboratories, Un]vt rs]ty of Pennsylvania, University of Ch]-

cago, Oak Ridge National Labori]tory, Sloan Kettering Institute for Cancer

Research, and the Nat]{lnal Institutes ot Health (7), The Un]verslty of

Mich]gan, Johns Hopkins University, and Houston are reported to have ordered PETT devices also ( 143).

which are related to heart and lung functions (96).

The strategy in research is to administer different

positron-emitting chemicals which respond to different metabolic pathways in the target organ. By

measuring the behavior of these chemicals at various

times, information concerning the function of the

organ can be obtained. For example, red cells “labeled” with the positron emitting carbon-n monoxide will show the blood distribution in the heart.

Clearly, the number of positron-emitting radiopharmaceuticals and biological pathways that can be

paired for study presents an almost infinite number

of permutations. This potential suggests that PETT

will play an important role in research in both organ

physiciology, and in basic physiological research

(96).

The estimated cost of a PETT scanner and its associated equipment (i. e., a cyclotron or linear accelerator for the preparation of positron-emitting

isotopes, and the computer software and hardware

systems necessary for imaging) is from $1.35 million

(143) to $1.94 million (7).4 Such a high cost suggests

that the use of PETT scanners might be restricted to

research purposes, since the cost would be prohibitive to all but the most major institutions. Nevertheless, the potential of PETT technology for clinical

application and use has been recognized by manufacturers of medical equipment, and it is reported that at

least a few have undertaken feasibility studies for

marketing PETT scanners (143).

Nuclear Magnetic Resonance Tomography

Although the principles of NMR were discovered

by atomic physicists at least 30 years ago, and have

been incorporated in the techniques of NMR spectroscopy developed and used by chemists in analytical chemistry almost since that time, NMR tomography, or zeugmatography, has only been under development for the past several years (96). Since 1973,

when Paul C. Lauterbur of State University of New

York (SUNY) at Stony Brook first demonstrated a

means for reconstructing an image in two (and even

three) dimensions based on NMR signals, zeugmatography has been the most rapidly expanding application of NMR in medicine (76). 5 A variety of

‘Almost half of the total estimate ot $1,35 mllll<~n is represented by the

estlma ted cost ot cyclotron at $600,000. The computer systems necessary

tor Imaging represent another $250,000, and the PETT scanner Itself, approximately S500,000 (143)

‘Examples ot ongoing research on NhlR at various Institutes z nd dlv]-

sions at NIH were presented at a science writers’ seminar on NMR held cm

Apr 23, 1980. These included. studies of he structure and moblllty of DNA

and proteins by NMR techniques, NMR studies O( sickle cell in t Ie intact

red blood cell, and NMR studies of the molecular structure of c ollagen.

These Intramural projects were In addition to the presentation of the prcqect

Involwng production of two- and three-dimensional Images by NIM R tomographic methods and a discussion of the] r potential diagnostic applications

by Dr. Hoult (122),
techniques have been developed by numerous researchers in Europe and the United States since the

first experiment by Lauterbur. While it remains to be

seen which method(s) will gain acceptance, the technology is ready to be clinically evaluated.

Since 1973, zeugmatography has made significant

advances in the clarity of computer-generated images

of the body (143). It is estimated that approximately

200 individuals have been subjects of NMR scans

(79). Theoretically, the resolution potential of zeugmatography is much greater than X-ray, nuclear, or

ultrasound imaging techniques (for reasons which

will be shown below) (77). However, this potential is

not the sole—or even the major—reason for the excitement surrounding NMR tomography. Rather, the

excitement stems from the fact that NMR does not

use ionizing radiation (either X-ray or gamma-ray), is

not “stopped” by bone, and most importantly, can

yield metabolic information with appropriate adjustments (77). The relatively greater potential

capabilities of NMR tomography in comparison to

other imaging technologies (including PETT) implies

tremendous potential for application to a wide range

of diagnostic and treatment monitoring functions.

However, the effects of the magnetic fields used in

NMR are unknown. Although NMR may be safer

than X-ray, it is much too soon to know for certain.

Hounsfield, who was awarded the Nobel prize for

his work in CT scanning, described the principles of

NMR as follows (80):

When hydrogen protons are placed in a magnetic

field they will precess (or “wobble”) around the field

direction just as a spinning top precesses around its

vertical gravitational field. This precession occurs at a

definite frequency, known as the Larmor frequency,

and is proportional to the magnetic field intensity.

The usual NMR procedure for imaging is to apply a

strong magnetic field along the body to be studied.

After a short period of time, the nuclei will align with

their magnetic moments along the field. A radio frequency tuned to the precession frequency of the hydrogen nucleus is then applied at right angles to the

main field by means of a set of coils at the side of the

body, This causes some of the hydrogen nuclei to precess—all keeping in step. After the radio receiver field

has been switched off, the nuclei will continue to precess in phase, generating a similar radio frequency

which can be picked up in receiver coils placed at the

side of the body, these signals detect the water content

of the body. It will take some time for the precession

to die away, as the nuclei again realign themselves

with the magnetic field. The measurement of this time

is important as it gives us some information about the

nature of the tissue under investigation.

This knowledge immediately suggests the comparison of recovery times of hydrogen atoms in healthy

versus diseased tissue. In early 1971, Raymond

Damadian at SUNY Downstate Medical Center in

Brooklyn published research suggesting that the

NMR signal from the water in tumor cells differed

from that in normal cells, the signal from cancerous

cells being much longer than that from normal cells

(96). The possibilities of a noninvasive, highly sensitive diagnostic tool based on chemical information

at a cellular level were obvious.

In 1973, these subtle differences in chemical information in human tissue were displayed in the first

NMR tomographic pictures, published by Paul C.

Lauterbur. Lauterbur realized that by changing the

direction of the magnetic field (in which the patient,

or portion of the patient is placed) gradient, and repeating the experiment at a variety of orientations

(i.e., taking projections at many different angles, and

then reconstructing them by computer), it was possible to picture the subject in two (and potentially)

three dimensions (77).6 Lauterbur named this technique “zeugmatography” (from the Greek “joining

together”) based on the underlying physics whereby

the magnetic field gradient joins together frequency

and spatial information (77). Although a variety of

NMR tomographic techniques are currently being

pursued, all are based on the phenomenon of resonance of hydrogen atoms in body tissue. The outcome is a reconstructed image of an organ or whole

body cross-section which appears on a screen (143).

Differences in body tissue are thus detected by their

intrinsic chemical differences, rather than by their

density or absorpability of X-rays as in CT scanning,

or by tracing administered positron-emitting isotopes

as in PETT scanning.

Perhaps the most exciting potential of NMR, however, is the potential for metabolic studies that will be

realized over the longer term. The dimension of

metabolic information is already represented in NMR

images. Eventually, it may be possible to “zoom in”

on part of an organ, such as the ventricle of the heart

or hemisphere of the brain, to obtain metabolic information in that specific region (79). In these extended

capabilities, one may envision the imaging of

metabolic information that would be comparable to

that currently obtainable only by biopsy. It is the

combination of metabolic information (not intrinsically available in any other imaging technique) with

the image that makes the NMR technique potentially

so powerful.

Hoult (79) has described one potential application,

a scan of a baby’s head for hydrocephalus or intracranial bleeding. NMR could locate a particular

artery, measure the blood flow in that artery, and
then check that the oxygen uptake of a hemisphere is

adequate. All of this would be done totally noninvasively, and perhaps without risk to the infant (77).

In the Biomedical Engineering and Instrumentation

Branch of the Division of Research Services at NIH,

such an experiment is under way. The imaging system developed at NIH has been almost entirely built

within the Branch (apart from the computer required). The crux of this particular NMR tomographic system is a novel magnet design that has two movable hemispherical windings which can generate

powerful transverse magnetic field gradients (78).

Construction of the magnet was near completion in

May 1980. Initially the equipment will be used with

phantoms and animals to obtain experience and

verify safety. Imaging of human subjects is to begin

in spring 1981 (approximately). Eventually, the NIH

system will be used to scan premature neonates in a

series of experiments. It is hoped that the NMR instrument will provide a major imaging facility at NIH

for diagnosis and repeated observation of diseases to

which NMR is particularly suited (77).

Besides these capabilities, the final and immediate

advantage of NMR over other imaging techniques is

that it may be safer because it does not use ionizing

radiation (79). However, there are real and potential

hazards from strong magnetic fields, especially with

pulsed or alternating polarity fields, and resulting induction currents (101). Although some have proposed that NMR is particularly well suited for use

with infants and fetuses of pregnant women, FDA

spokesmen urge caution in applying it to infants or

pregnant women (86).

Meanwhile, the expectations based on the capabilities and attributes of NMR have attracted the intense

interest of researchers throughout the world. University and research centers developing NMR scanning techniques include Nottingham, London, and

Oxford Universities in England, and SUNY at Stony

Brook, SUNY at Downstate New York Medical Center, the University of California at Berkeley, the

University of Illinois, and Johns Hopkins University

in the United States (143).7 Damadian, who is affiliated with Downstate has formed his own company,

FONAR Corp. and plans to place an instrument in a

diagnostic center in Cleveland, Ohio, for clinical

evaluation (101 ).

In addition, there is substantial private investment

currently being made in R&D that will translate the

principles of NMR tomography into devices that may

be commercially marketed. In the United States, Pfi-

‘A150 in this c(mntry the Nld%dchusetts Irrstltute of Technology, Harvard UnLverwtv, and Bell Labora tor]es are devel(~p] ng NNIR scanners They

have not yet produced Images that are ctlmparable t~~ those of the lnstltutlons Ilsted in the text, hcwvever ( 143).

zer has a scanner at the University of California in

San Francisco (143). Johnson & Johnson (Technicare), General Electric, and Intermagnetics are also

reportedly involved in the commercial development

of NMR scanners (79,101). In Europe, there are four

companies known to be developing NMR scanners.

These are: EMI, Ltd. (United Kingdom), Brouker

West Germany), Siemens (West Germany), and

Philips (Holland) (143). The intense involvement of

these companies attests to their expectations regarding the potential marketability of NMR techniques.

The estimated cost of an NMR for whole-body scanning is about $500,000, but with the addition of computer equipment necessary to provide the imaging

capability of the scanner, total costs would approach

$750,000 (101,143) .

Interestingly, EMI, Ltd. (now Thorn EMI), which

pioneered the R&D of the CT scanner, is actively involved in NMR (80,101). Both EMI and Nottingham

University have recently produced images of body

sections using NMR. These models have been the

basis for research by several of the U.S. manufacturers (143). In May 1980, EMI installed its prototype

NMR scanner in Hammersmith General Hospital in

London with the purpose of evaluating the device

under conditions of hospital use (79). It is conjectured that EMI will begin manufacturing and marketing this device in the near future (143).

Ultrasonography

Ultrasonography is not a new technology: Its development preceded that of CT scanners by at least

20 years and it has been used in the clinical practice

of obstetrics since 1956 (59), Ultrasound has experienced a much slower developmental history than

CT scanning, and it has been slower than CT to gain

wider acceptance by practitioners and broader application in medical practices (153). However, there

are now several indications that suggest that ultrasound is rapidly coming of age 8

Recent improvements in ultrasound instrumentation have resulted in enhanced image quality and reliability, convenience of use, and quicker study times,

all of which have heightened the appeal of ultrasound

to practitioners. These emerging improvements in the

technical performance of ultrasound imaging systems, however, are not the sole reason for its relatively newfound appeal. There is also increasing importance being placed on cost and safety —two attributes that have always made ultrasound appealing

relative to CT scanners for some uses. Ultrasound

“Nlarket trends ]nd]cate that ultrasound IS currently the m<]st rapidl y

growung market of ]maglng products (see tahle B-2)
equipment is much less expensive than any CT scanner (in terms of capital cost): The most technologically advanced, fully automated ultrasound imaging

systems now commercially available still sell for

about $150,000, a price that is about one-fifth that of

some present generation CT scanners. 9 A real-time

ultrasound scanner costs around $50,000 (174). In

addition, ultrasound units are smaller than CT, require no elaborate installation, and are portable,

allowing them to be used in areas such as the newborn nursery and the intensive care unit.

The second attribute of ultrasound that has always

made it preferable to CT scanning (and other X-ray

modalities) is that it is based on the physics of sound

rather than radiation, and therefore does not impose

the risks associated with ionizing radiation (136). The

higher growth rates for ultrasound sales observed in

1979 data and projections through the coming decade

suggest a market trend toward imaging devices that

do not use X-ray (91). In part, this may reflect the

heightened public awareness of the harmful effects of

radiation (91). However, relative to CT, ultrasound

has the limitation that it cannot penetrate bone and

thus cannot be used to image the adult brain, and the

limitation that it cannot penetrate gas, and hence

cannot be used to image structures surrounded by

gas- filled loops of bowel (136). It likewise has no role

diagnosing disease in the lungs.

Although it is true that ultrasound is safer than CT

because it does not use X-ray, more cautious observers point to the possibility that ultrasonics may involve other risks yet unknown (86). Until recently,

ultrasound has been presumed to be harmless, and its

supporters have insistently promoted it on this basis.

Indeed, this assumption has been one of the primary

reasons for its near-routine application in the practice

of obstetrics. 10 Now, however, the possibility of risk

entailed in using ultrasound is becoming the focus of

considerable concern particularly because of its prevalent application in obstetrics (17). It is more realistic, and safer, to say that the risk associated with ultrasonic energy is unknown rather than nonexistent.

The principles of ultrasonics can be clarified by a

discussion of one of the two types of ultrasound,

pulse echo imaging (59). The key element of the

ultrasound system is the transducer that changes

—

‘This IS th(, prlct, tlt the [latas~~n manufactured by C,enera I Electrlc and

Intr{duc ed ]n i\’c~\,em twr I Q7Q, wh]ch Intcgra tes the B-mtxie and real t]me

scanning capabllltles ( 123 ~

“The technology was t [rst found to be very usetul ]n obstetrics because of

the fact that sound transmits ver} well through water, [Jr tluld such as that

tc~und In the amn]t~t]c sac Its safety was assumed and later accepted based

t~n dccumulatl ng c1 I n]ca I t,xperlence Th}s appl]ca tl[>n IS based (~n the st)nar

prlnclpie It dl~pldy< !mages t~} sectl(lns [,t the human body S(J rapidly that

In ternd 1 m{lvemen t ma} ht, cietec ted Its main uw IS rec(~rdl ng the tetal heart

r~ te dU ring ldb(~r

voltage into high-frequency sound by means of a

piezo-electric crystal: This crystal also has the capability of picking up reflected sound and changing it

back into electricity. This electronic input is then

converted into visual data. There are several formats

for display, not all of which provide a two-dimensional image. The format most closely approximating

the X-ray view supplied by CT scanner is that of the

B-mode compound scanning method which provides

a two-dimensional, cross-sectional view of a body

tissue or structure (59). Its principal components include the transducer, transmitter and receiver, digital

or analog processor, and display monitor. There may

also be a television camera, video tape recorder, and

record monitor so that image sequences of particular

interest may be recorded for later analysis (88). An

ultrasound imaging system is shown schematically in

figure B-2.

One problem with ultrasound is that the quality

and reliability of the images depends directly on the

skill of the person operating the equipment. Recent

refinement and automation have not yet solved that

problem (136). In addition, some observers have attributed the rather long developmental path of ultrasound, as well as its consequent slow application and

acceptance by practitioners in diagnostic capacities,

to the fact that ultrasound has no “natural” constituency among the medical specialties (153). There is no

medical specialty to which ultrasound is particularly

germane (outside obstetrics), although it is now being

applied in many: Cardiology is one specialty with

rapidly expanding applications of ultrasound (150).

Many other specialities including ophthalmology,

pediatrics, and neurology, are now acquiring their

own units, which helps explain the recent explosive

growth (174).

Historically, ultrasound has received fairly large

funding support from NIH. Table B-4 shows Federal

investment in 1975—present levels are probably

comparable. NCI has done some recent work: Two

projects are currently in progress, each funded at

about $500,000 in fiscal year 1979 (153). NHLBI is

also investigating the use of ultrasound diagnostic

techniques in cardiology. The most active research

unit for ultrasound applications at NIH is the Division of Radiology in the Clinical Center of NIH.

Most of the work done in that division relates to

clinical applications, but research has involved advances in instrumentation as well. New equipment is

being developed in the field of real time scanning

(153).

In spite of these past trends in development and

adoption into wider use in medical practice, however, ultrasound is now being applied to a variety of

medical problems outside its longstanding and now
68 . Policy Implications of the Computed Tomography (CT) Scanner: An Update

Figure B-2. -Principal Components of Real-Time B-Mode Ultrasound Imaging System

Transmitter

and

receiver

b

1

SOURCE:IEEE Spectrum, January 1977, p 80

Table B-4.—Federal Funding for R&Din Ultrasonic Imaging

Diagnostic Instrumentation (1975)

National Bureau of Standards . . . . . . . . . . . . . . ... . . . . . . . . . . . . . ... ... ... ... ..$ 100,000

Department of Defense:

Army. . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000

Navy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . 285,535

Energy Research and Development Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Department of Health, Education, and Welfare:

Food and Drug Administration . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . 841,459

Health Resources Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

National Institutes of Health:

25,000

National Cancer Institute. . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . 418,514

National Heart and Lung Institute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,851,165

National Institute of General Medical Sciences. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,530,166

National Institute of Arthritis, Metabolic, and Digestive Diseases . . . . . . . . . . . . 118,964

National Eye Institute. . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439,297

National Institute of Neurological and Communicative Disorders and Stroke. . . 379,905

Division of Research Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000

Division of Research Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000

Social and Rehabilitation Service ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,851

National Aeronautics and Space Administration. ., . . . . . . . . . . . . . . . . . . . . ., . . . . . . 360,000

National Science Foundation ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 818,850

Veterans Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500

Total ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... .$8,484,206

aDoes not I nclu{je al I Intramural programs, whlc h are considerable

SOURCE: All lance for Englneerlng In Medicine and Biology, D/rectory of Federa/ Programs In Med/ca/ D/agrrost, c U/trasourrd

(Chev{ Chase, Md , 1976).

near-routine use in the practice of obstetrics. Ap- glands), as well as fluid collections in the abdomen

placations of ultrasound have expanded to include (147). With the emergence of these new applications,

studies of the brain, eyes, and various organs and ultrasound has become the diagnostic imaging mostructures of the abdomen (including the liver, gall dality that is currently most often compared to CT

bladder, spleen, pancreas, kidney, and adrenal scanning for studies of the abdomen.
Thus, ultrasound is being applied in diagnostic

roles that compete with and/or complement those

typically performed by CT scanners and/or other radiological diagnostic imaging modalities. Ultrasound

has proved particularly popular in applications

where the risks associated with ionizing radiation are

especially high (as has always been the case with the

use of ultrasound is obstetrics). The recently published results of a clinical trial testing the efficacy of

using ultrasound for breast cancer screening for

tumor, 11 for example, showed ultrasound to be able

to accurately and reliably diagnose tumors of the

breast when they are fairly large (25).

The successful application of ultrasound for breast

cancer screening for tumor would be significant in

that it would offer an alternative to X-ray mammography, a procedure for breast cancer screening that

has been the focus of much controversy. Breast cancer screening was the topic of the first consensus

development conference sponsored by NIH (24).

Consideration of X-ray mammography, as used for

screening rather than diagnosis, was an important

part of that conference. The risks and potential

benefits of X-ray mammography screening were such

that the panel recommended routine screening for

women age 50 and over, but that women between 40

and 49 years be routinely screened only if they have

either a personal or family history of breast cancer,

and that women under 40 years of age not be routinely screened unless they have a personal history of

breast cancer (24).

Other potential applications of ultrasound may become increasingly important. One is carotid artery

scanning to diagnose occlusion (blocking) of the

artery (156). Another is the use of ultrasound to characterize tissue such as liver (155) and pancreas (154)

to diagnose such diseases as pancretitis. In terms of

its capability to diagnose some diseases, ultrasound is

not superior to or even equal to CT: For other diseases, the two may be about equal. In those cases

where the images produced by each modality can

enable accurate and reliable diagnosis, and one

modality involves irradiating the patient while the

other does not, it stands to reason that the obvious

choice would be to avoid imposing the risk associated with radiation.

It is important to stress, however, that ultrasound

cannot be assumed to be harmless because no ionization occurs with the interaction of ultrasonic energy

and human tissue. Rather, the associated risk is unknown and is cause for growing concern b y more

cautious observers (148). Proponents of ultrasound

‘ ‘These are the tlr>t cl]n~cal tr]als {~f th]s appllcat]~,n ot ultrast,und H(N+

ever this equ]pment w,a~ marketed commerciall y a tew ~rears ag(>, and there

are al read} a t least three cc}m merclal m{xiels presently ava] I able ~ I S3 )

maintain that the risk is negligible, noting that no

adverse effects attributed to ultrasound have been

reported by either obstetricians or pediatricians (59).

Proponents further substantiate this claim by pointing to the fact that the developing embryo or fetus is

tremendously susceptible to traumatic influences and

that such a fragile organism would be the first to

manifest any ill effects. Critics argue that the absence

of reported hazards does not constitute proof of safety (59). Although there have been no adequate human studies of the risk entailed in the use of obstetric

practice to date, experimental laboratory studies

with mice and primates have indicated a variety of

problems as a direct result of using ultrasound at high

levels (148).

The possibility of risk associated with intrauterine

exposure to ultrasonic energy is particularly poignant

given its prevalence of use in the United States (59).

Virtually every large labor room in the country is

equipped with ultrasound for the purposes of monitoring the fetus during labor; an application now regarded as routine practice. More recently, there has

been a trend toward the routine use of ultrasound for

monitoring the embryo and fetus in early stages of

gestation as well (59). The current high use levels

observed and expanding routine application of ultrasound may not be justified in terms of the benefits attained by the monitoring procedure (17).

Thus, at the same time that considerable concern is

being expressed over the safety of ultrasound as applied in obstetrics, it is being more liberally applied:

The controversy over risks and benefits has placed

the technology at the center of a heated debate regarding its appropriate use in obstetrics. Certainly

there is the potential for abuse in applying the technology. At the least, unnecessary use of ultrasound

could result in unnecessary costs. But at the worst, it

could result in unknown damage in a generation of

children. The controversy points out, in the most

dramatic way, a great need for basic information

regarding the safety and efficacy of ultrasound.

The Future of CT Scanning

As recognized by the honor of the Nobel Prize bestowed on its originators in 1979, the CT scanner undoubtedly remains a remarkable advance in diagnostic medicine. With CT technology now well beyond

the phase of basic R&D to which Federal funding

sources are primarily oriented, Federal funding has

recentl y supported the R&D of new imaging technologies such as NMR, PETT, and ultrasound, the capa -

“There are nine human stud]e~ but all are method{~l(,~]cal 1}, tlawed

( 153).
bilities of which may exceed those of current CT

scanners.

This is not to suggest that the limits of the CT scanner, based on the principles of radiology and CT,

have been fully realized. But continued refinements

and improvements in CT technology are now more

the concern of those private companies that currently

have considerable vested interest in the future of CT

scanning. Among the performance improvements

that current CT technology may now be capable of

supporting are subsecond, high-resolution, and/or

three-dimensional reconstructions (64). Proponents

of CT are confident regarding the continuing technical evolution of the technology through the remainder of this century (64).

Meanwhile, however, private, as well as Federal,

investments in the R&D of new principles of imaging

have resulted in the emerging technologies of NMR

and PETT scanning. While the contribution of CT

imaging to biomedical research and medicine was to

provide studies of anatomical structure in a noninvasive, automated mcde, the techniques of PETT

and NMR provide studies of physiology and function, and metabolism (respectively) in that same

mode (151). In the case of NMR, these capabilities

are particularly enticing since they are achieved via a

technique that does not involve radiation exposure,

either from X-ray or from the administration of radionuclides.

It is not only the new and emerging imaging techniques that are poised to present a challenge to CT

scanners, but also other older techniques such as

ultrasound. Continued research on ultrasound diagnostic imaging techniques has resulted in improvements in equipment and procedure that have brought

about comparable diagnostic capabilities for certain

conditions, as well as convenience of use for practitioners. At the same time, the appeal of diagnostic

ultrasound has been enhanced as increasing emphasis

has been placed on cost and safety of equipment and

procedure. Diagnostic ultrasound, which is assumed

to be not only safer than X-ray imaging techniques

but also far less expensive even in its newest forms,

can be expected to continue its competitive position

in medical practice, and consequently in the commercial marketplace.

Several indicators already reflect the increasing

preference and demand for less expensive, noninvasive, non-radiation-emitting modalities such as ultrasound. For example, an estimate of 1979 (worldwide)

dollar volume sales in ultrasound imaging equipment

indicates an increase of 40 percent over sales in 1978,

while an increase of 10 percent over 1978 was estimated for CT scanner sales (48). Projections of annual growth rates from 1979 through 1982 show an

extension of these trends: It is expected that sales of

CT scanners will continue to increase at an annual

rate of approximately 10 percent, but ultrasound is

expected to show a 31-percent rate of increase per

year (48). Increased utilization of ultrasound in medical practice may also be expected in the coming

years based on such indicators as the papers presented at the annual meeting of the Radiological Society of North America in November 1979 (134). While

the number of papers on applications of ultrasound

increased from the previous year by about 15 percent, the number of papers on applications of CT decreased by about 10 percent (91). It is already predicted that the increased use of ultrasound in diagnostic capacities enabled by recent refinements in

ultrasound technology will affect the future sales of

CT scanners (91).

Eventually, the diagnostic imaging instrument

market will be further altered by the introduction of

new technologies. However, it also seems to be recognized that these new imaging techniques will be

subjected to an increasingly critical and extended

period of evaluation to establish efficacy, and also

cost effectiveness (64). Further, primarily because of

their costliness, they will come under particular

scrutiny as their diffusion and widespread utilization

in medical practice become imminent (143). If welldesigned studies are not done of their clinical utility,

two equally undesirable outcomes are possible:

Rapid spread without demonstration of usefulness or

concerted attempts by Government to restrict diffusion without a good basis on scientific studies on

which to rely.

Expectations surrounding the introduction and use

of new technologies have given rise to a certain skepticism regarding their becoming generally available

(64). Some believe that the cautious environment into which expensive new diagnostic modalities such as

NMR will be introduced will have a net effect of

favoring continued evolutionary changes in diffused,

accepted technologies and procedures— in this case

CT scanners and scanning. The recent trends observed with respect to the development and use of

ultrasound equipment and procedure are a pertinent

example of this prediction. 13

Ultimately, the way in which these new and improved diagnostic imaging modalities will compete

with CT scanners in the marketplace will be determined by the way in which their capabilities are used

“Although ultrasound M not nearly as capital ]ntenslve as either CT 1s, or

NMR IS expected to be, expenditures associated with Its use now ri~al those

associated with CT because of the prev,ilent and frequent application of

ultrasound in its current capacities. And as the diagnostic appllca tions of

ultrasound expand, these expenditures can also be expected to rise, The

Issue of capital costs v. the cost associated with actual utlllzatlon (that ultrasound so aptly Illustrates) is an Important one.
to complement, supplement, or replace CT scanning

in medical practice. Essentially, this is tantamount to

saying that the clinical efficacy of CT scanning—as

well as that of emerging and improved diagnostic imaging techniques—must be evaluated. The future of

CT scanning lies in determining what the potential

impact of CT scanning can be and under what conditions these benefits can be attained. For example,

comparisons of CT and ultrasound for abdominal

diagnoses show that CT is generally the better imaging technique for corpulent patients, ultrasound the

better for thinner ones (153). Since ultrasound does

not require the patient to be motionless, it is also better than CT for imaging very young, elderly, and agitated patients (153). To be sure, the principles underlying each technique, as well as the attributes of the

associated procedure, will aid in determining the ultimate place that each will occupy in the practice of

medicine.

Until very recently, CT has been used primarily as

a supercapable X-ray machine. But new applications

of CT need to be explored and refined if i t is to

establish a legitimate position relative to other

diagnostic technologies that are being, or soon will

be, used in medical practice. Investigation of the use

of CT in capabilities that lie beyond its traditional

diagnostic role is especially important to extending

and establishing the boundaries of its domain. Examples of such applications are the use of CT in the

planning and delivery of radiation and chemotherapy treatment, and the monitoring of cancer patients

under treatment (5,68, 75, 169). Another is its application in emergency medicine for head trauma (9 I ). A

final example is the use of CT as a guide in biopsying

tumors, aspirating cysts, and draining abscesses of

the brain.

Applications of CT outside conventional diagnostic roles will be important to establishing its clinical

efficacy. The benefits accruing from the use of CT in

therapeutic capacities (e. g., in conjunction with radiotherapy for cancer) are more readily discerned

than those accruing from the use of CT in diagnostic

capacities, partially because they have a more direct

potential influence on health outcome ( 102,183,185,

186). These new applications could provide a broadened base for arguing the need for additional CT

scanners. However, they have not yet been raised as

a major issue in the current heated public debate surrounding the National Health Planning Guidelines.

Presently, the evaluation of efficacy and cost effectiveness, the regulation of diffusion, and the financing of CT scanning are primarily based on the application of CT in its diagnostic capacities. New applications being made outside the diagnostic role in

which CT was born, however, will be a Critical factor

in determining its future.
Appendix C.— CT-Related Policies of the Department of

Defense and the Veterans Administration

The Department of Defense

The Department of Defense (DOD) Health Council, including the Surgeons General of the Army,

Navy, and Air Force, and the Assistant Secretary of

Defense for Health Affairs, reviews all requests for

capital expenditures exceeding $100,000. Acquisition

of computed tomography (CT) scanners proceeds in

the same way for each of the three armed services.

The Commanding Officer of a hospital will make the

initial request for a scanner to the Surgeon General’s

Office. Justification of the purchase request will state

the need for the scanner in terms of expected patient

load, the beneficiary population, and geographic access. Local health systems agencies (HSAs) are consulted, since military requests are to be coordinated

with those of local civilian facilities. The Surgeon

General will then bring the request and justification

before the Health Council for authorization. Funding

of authorized expenditures is a separate process, and

money may not be appropriated for some time following authorization of purchase. The time from initial request to installation of a new scanner may be as

long as 2 years.

At last report, a decision had been made to purchase six scanners, two for each of the armed services. As of May 1980, the Army has two operational

scanners, and the Navy has four; the Air Force has

two, and a third one is being installed. Since July 1,

1977, when only one scanner was operational, seven

more have been added for a total of eight scanners

for the entire DOD. All are total body scanners and

are located in large medical and teaching facilities.

Others have been approved and funded, but are not

yet installed. Military hospitals and clinics without

scanners continue to use CT scanning facilities of

civilian institutions and pay for such scans out of

operating budgets.

DOD is currently not supporting any major research related to CT scanning, although it does fund

health research. The Air Force, however, is a partial

supporter of the dynamic spatial reconstructor imaging system being developed at the Mayo Clinic. Its

interest in that project does not lie with the diagnostic

capabilities of the technology, but with the generic

problem of high-speed processing of information for

imaging that is inherent in it.

The Veterans Administration

There has been a major shift in Veterans Administration (VA) policy toward the purchase of CT

scanners for the VA system of hospitals. The predominant means of obtaining scans for VA patients

has been for VA hospitals without scanners to contract with local civilian institutions and to pay for

such scans out of operating budgets, As of August

1978, a total of 14 scanners were either operational,

being installed, or were ordered for the 171 VA hospitals. Currently, there are 17 operational scanners in

the VA system (5 head and 12 body), another 6 total

body scanners have been purchased, and there are 2

mobile scanners—for a total of 25 scanners in the VA

system. As noted in chapter 2, a number of large VA

hospitals do not have scanners.

The shift towards preference for purchasing CT

scanners rather than contracting for services is

justified in a 1978 VA report by the Special Central

Office Advisory Group for Computerized Tomography Units (179). The study compared the cost of obtaining scans for its patients by these two methods

and found that the cost of performing a CT examination on VA-owned and operated scanners was only

about 60 percent of the cost of the same exam obtained under contract from a civilian institution. The

convincing cost differential suggests that the VA cannot afford not to buy its own scanners. This evidence, in combination with VA’s special characteristics of a fixed operating budget, and the legislative

mandate it has to serve veterans, has led the VA to

adopt a policy of purchasing CT equipment whenever possible,

The report suggests optimal guidelines for the purchase of CT scanners under this new policy. These

guidelines state that at least 500 exams per year

would be required to cost justify purchase of a

dedicated head scanner costing $l50,000 or less;

1,500 exams per year would be necessary to justify a

total body scanner costing $450,000 or less; and more

than 1,500 exams per year would be required to justify one costing more than $450,000. At least 2,500

exams per year would be necessary to cost justify

purchase of a second CT unit in a facility. Under no

circumstances would purchase of a CT scanner be

considered if a VA or other federally owned scanner

is within 30 minutes from the facility in question.

It should be emphasized that these guidelines are

only optimal. While more generous than the proposed National Health Planning Guidelines of 2,500

exams per year for both a first and a second scanner

in a given facility, and the VA is legally exempt from

that standard, they are attempting to conform as

closely as possible. In practice, the VA is using a

72
guideline of about 2,000 exams per year as a threshold for considering a request for purchase of CT

equipment. It is also continuing its policy of coordinating purchase decisions with existing local CT

capacities by seeking local HSA certification of need,

although this review is not required by law.

Decisionmaking on purchase and placement of CT

scanners is done centrally, although it is responsive

to local level requests. The VA Advisory Group on

CT Units, including the directors of Medicine, Surgery, Neurosurgery, and Neurology, have developed

a list of VA hospitals that are priority candidates for

placement of additional CT scanners in the VA system. At this time, purchase of the total body scanners

have been given precedence so that only the biggest,

most well-equipped and staffed, and busiest hospitals

are being considered for placement of these scanners.

Being at the top of this list, however, does not ensure

that the hospital will receive a scanner. Local available CT capacity may mediate this apparent necessity. Acting within the constraints of a fixed annual

budget, the decisions of purchase and placement of

CT units for the system must be based on the criterion of maximizing total VA scanning capacity, by

whichever means it may be obtained.

Purchase of scanners by the VA is itself a unique

process. Once a decision has been made to buy a unit

for a particular facility, or facilities, the VA requests

bids from manufacturers quoting prices of models

that meet the particular specifications of the scanners

required at each site. The VA accepts the lowest bid

made by manufacturer for a machine that meets the

necessary specifications. The large purchasing power

of the VA allows them to purchase scanners in this

way, typically resulting in a purchase price between

$100,000 and $200,000 below the usual market price.

Even so, the manufacturers bids seem very high in

light of the fixed annual budget within which the VA

must operate. Price tags quoted for total body scanners being considered for purchase by the VA at this

time were between $750,000 and $900,000. This may

explain the fact that the Office of Management and

Budget disapproved VA’s plan to buy nine CT scanners with year-end money in September 1980. However, information recently collected by the VA from

a number of its large hospitals indicates that the costs

of buying outside CT scans has increased since the

1978 report. It may cost as much as three times as

much to obtain scans in this way.

Several alternatives are open to the VA as possible

solutions to their apparent dilemma. One, the purchase of the new cheaper scanners, is not now being

considered by the VA. Such scanners are not believed

to be adequate to the task required in the large

hospitals now being given priority for placement of

CT units. Another avenue of approach recently used

was the purchase of a refurbished EM I head scanner,

originally costing $450,000, for $160,000. This scanner was purchased for the Palo Alto VA hospital

which had been ranked number one on the priorities

list for placement of a total body scanner. Because of

the nearby scanning capacities of Stanford-University-owned body scanners, however, it had not been

approved, A compromise solution was made whereby at least the head scans may be done in-house.

A final alternative that holds promise for the VA is

the purchase and operation of mobile scanners. Financially, such units are advantageous for the VA

because they can use their own physicians, technicians, attendants, and vehicles. A research project

funded by the VA is just getting underway to investigate this possibility. The study will evaluate the sharing of VA-owned equipment with four satellite hospitals in the Boston area. A radiologist at the central

VA hospital will read all scans performed by this

unit.
Appendlix D.— Indications for CT Scans (Exhibits 1 -4)

Exhibit 1:

Draft Screenin Criteria for Body and Head Computerized Axial Tomography (CT)

Scans. Memorandum from Director, Office of Professional Standards Review

Organizations, Health Standards and Quality Bureau, Health Care Financing

Administration, DHEW, to Planning and Conditional PSROs, Statewide Councils and

Regional PSRO) Officers, Feb. 22, 1979.

MEMORANDUM DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

HEALTH CARE FINANCING ADMINISTRATION

TO

HEALTH STANDARDS AND QUALITY BUREAU

OFFICE OF PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS

: Planning and Conditional PSROs, DATE: FEB 22 1979

Statewide Councils, Regional

PSRO Project Officers GENERAL MEMORANDUM NO. 3.79

FROM :

SUBJECT:

Director

Draft Screening Criteria for Body and Head Computerized Axial Tomography

(CT) Scans

Attached are sample screening criteria for body and head CT scans collected from several sources by the Ad Hoc Computerized Axial Tomography Criteria Commit tee of the American Association of Professional

Standards Review Organizations (AAPSRO) . These critertia were accepted without change by the National Professional Standards Review Council

(NPSRC) . PSROs may wish to adopt and adapt the criteria for local use.

The criteria should be helpful to PSROs that now review CT scan procedures

or plan to do so.

Due to rapid developments in the field, the AAPSRO Committee recommende d

that the criteria be evaluated in six months for necessary revisions.

This recommendation was approved by the NPSRC. To assist AAPSRO in this

effort, please address your comments to Lloyd Cloud, DDS, Chief, Allied

Health Branch. The mailing address is Health Standards and Quality

Bureau, Dogwood East Building, 1849 Gwynn Oak Avenue, Baltimore,

Maryland 21207 .

Dennis F. Siebert

Attachment

NOTE: The PSRO standards (exhibit 1) are virtually identical to the Institute of Medicine

standards, so the latter are not reproduced here.
Criteria for CAT Head Scans

CAT scans of the head should be covered for the following signs,

symptoms, and/or disease processes:

A. Symptoms - persistent symptoms after physical examination including

neurological evaluation .

1 . Headache of significant magnitud e

2. Persistent vertig o

3 . Persistent seizures, adult onset; in the absence of drug /

alcohol withdrawal or recent head trauma

4. Acute or progressive focal necrologic findings, when systemetic

or metabolic origin has been excluded, such as: a) apasia

b) ataxia

c) paresis or

d) sensory deficit

5. Unexplained dementia; progressive organic mental deterioration

unexplained by systemic disease (e.g. , memory loss)

B. Physical Findings

1. Papilledema, or other signs of increased intracranial pressure

2. Apraxia or aphasia

3. Visual field defects

4. Cerebella dysfunction signs

5. Hemiparesis

6. Exophthalmos after thyroid disease has been ruled out

7. Other focal neurological signs

c. Unresolved Medical Problems

1. Vascular

Suspected Intracranial hemorrhage, such as:

a) subarachnoid hemorrhage,

b) subdural hematoma,

c) bleeding arteriovenous malformat

d) bleeding aneurysm,

e) complications of anticoagulation

in patient on Coumadin, Heparin

f) intracerebellar or intracerebral

2. Traumatic

(e.g., Progressive headache

hematoma

Suspected lesion secondary to trauma (significant head injury)

with progressive neurological findings.
3. Neoplastic

Suspected neoplastic lesion, such as: a) primary brain or meningeal

tumor or cranial nerve

tumor or

b) intracranial metastasis

c) paranasal sinuses and

nasopharynx

4. Congenital Lesions

Congenital lesions, such as: a)

b)

5. Calverial lesions (skull); lesions

x-rays.

6. Detection of cerebral metastasis

thoracic surgery

)

hydrocephalus

encephaloceles

anomaly of brain

not fully defined by skull

in proven lung cancer prior to

7. Evaluation of effectiveness of treatment of documented cerebral

lesion including:

subdural hematoma

neoplasm, after surgery, radiation, and/or chemotherapy

hematoma, arteriovenous malformation or aneurysm

hydrocephalus, after shunt

management of brain abscess

when signs and symptoms suggest progression, recurrence, or lac k

of response to therap y
Appendix D-Indications for CT Scans ● 77

The following problems are generally not considered to be appropriate

situations for C.A.T. use and will be reviewed:

1. Vertigo as an isolated symptom.

2. Syncope as an iso

3. Migraine headache

4. Febrile seizures

5. Alcohol withdrawal,

evaluation.

ated symptom.

uncomplicated

n children under six years of age.

repeated, with seizures, upon initial

6. T.I.A. on hospitalized patients unless cerebral arteriography and surgical re-vascularization.

7. Uncomplicated meningiti s

8 . A head injury followed by a transient loss of conscious -

ness (concussion) admitted for hospital observation which in

twenty-four hours resolves without persistent neurological

signs.

9. Completed Stable Cerebral Infarction (Stroke).

At the present time, indications for contrast studies vary

according to the diagnostic problem and the judgment of the radiologists and clinicians . Therefore, decisions concerning the use of

contrast are not addressed in these screeninq guidelines.

Patients having more than three scans should be subject to

peer review.
Criteria for Body CAT Scan

Neck -- CT scanning is not indicated at this time.

Chest --

● Pleura

--Detection of 

chest wall lesions.

.Lung

--Detection of

more have been

pleural metastasis and other

multiple tumor modules where one cr

found by conventional x-ray techniques.

--Search for a primary tumor when a positive sputum

for malignant cells has been obtained, but no evidence

has been found through conventional x-ray techniques.

--Determination of extent of spread tO adjacent lobes

in patients with impaired pulmonary function.

--Differentiation of solid, cystic, fatty, inflammatory

and vascular masses.

--CT is not indicated for detection of pulmonary emboli

at this time.

(If there is clearcut evidence of bilateral tumor involvement, CT is not appropriate. )

● Mediastinu m

--Detection and evaluation of masses .

--Differentiation of solid, cystic, fatty, inflammatory ,

and vascular masses .

--Determination of extent of primary or secondary tumor.

 Hear t

--Studies of the heart are not indicated at this time

Great Vessels (including abdominal aorta)

-- CT scanning is not indicated in the aorta and great vessels

except in the few post-operative patients in whom aortic graft

abscesses are suspected.
Spine and Contents -

● Spinal Cord

--CT is not indicated for disease of the spinal cord

at this time .

● Spinal Column

--Determination of content and extent of meningoceles

and meningomyeloceles.

--Biopsies under CT guidance.

--Otherwise, CT scanning of the spinal column is

indicated only where other procedures, including

conventional tomography, radionuclide scanning,

and myelography have failed to detect primary

tumors, metastasis, and inflammatory diseases in

the presence of persistent symptoms or signs .

Abdomen -

● Retroperitoneal Area

--Diagnosis and staging of nodal and extranodal

extension of Iymphomas, determination of extent of

retroperitoneal involvement with lymphomas, and extent

of other types of retroperitoneal metastasis from

various primary sites.

--Detection of primary malignancies such as those of

mesenchymal, neural, lymphatic, embryonic rest origin,

melanomas, and benign conditions such as cysts which

may mimic malignancies. Trauma with suspected retroperitoneal hemorrhage.

Peritoneum -

--Detection and aspiration of abscesses and cysts.

Liver -

--Search for primary and secondary tumors and some

life-threatening benign lesions such as liver cell

adenomas and cavernous hemangiomas and abscesses.

--Determination of extent of tumor and differentiation

of solid, cystic , inflammatory, vascular, and fatt y

lesions.
-- Biopsies under CT guidance.

Spleen -

--CT ‘is not indicated at this time.

Pancreas 

--Search for primary and secondary tumor. Whe n

principal diagnostic consideration is pancreatic

tumor, CT should precede and when positive supplant such

less sensitive studies as upper GI, barium enema,

liver and spleen scans.

--Determination of extent of tumor.

--Differentiation of solid cystic, inflammatory,

vascular, and fatty lesions.

--Biopsies under CT guidance.

Kidney -

CT scanning of the kidney is indicated only when preceded by

a conventional IVP study, and then for:

--Search for primary and secondary tumor.

--Determination of extent of tumor.

--Differentiation of solid, cystic, inflammatory ,

vascular, or fatty lesions .

--Biopsies or aspiration under CT guidance.

Gall Bladder -

--CT is not indicated at this time.

Biliary Tree -

--Differentiation of obstructive from non-obstructive

jaundice in those cases where cholecystogram and/o r

ultrasound fails to define cause.

Gastrointestinal Tract -

(Stomach, Small and Large Bowel)

--CT is not indicated at present. Except for determination

of extent of tumor spread to other organs (see other indications).
Adrenal Glands -

--Search for primary and secondary tumor .

--Determination of extent of tumor.

--Differentiation of solid, cystic, inflammatory ,

vascula r} or fatty lesions .

--Biopsies under CT guidance.

Pelvis -

● Uterus and Ovarie s

--CT scan is appropriate for the staging and evaluation

of extent of tumors.

Indication for CT is limited and cases should be

subject to individual review. Pelvic exam and

ultrasonography should define most masses.

● Bladder, Ureter, Prostate, Testicles

--CT scan is appropriate for the staging and evaluation

of the extent of tumors.

CT adds little information and cases should be subject

to individual review.

--Differentiation of solid, cystic, inflammatory vascular,

or fatty tumors.

(For retroperitoneal primary and secondary, see retro -

peritoneal. )

 Bones

--Evaluation of bone lesions.

--Biopsies under CT guidance.

Extremities -

--CT is indicated for determining the local extent of a

tumor and presence of regional metastasis.

Therapy Planning & Follow-up -

--CT may be indicated for collection of information on crosssectional anatomy and attenuation coefficients of bone
and soft tissue in tumor-bearing areas for planning

surgery and radiation therapy.

--CT may be indicated in follow-up evaluation of

effectiveness of radiotherapy, surgery, or chemotherapy in cancer patients at primary or metastatic

tumor sites when part of an established and acceptabl e

follow-up protocol or when signs and symptoms suggest

progression, recurrence or failure or therapy.

Foreign Body -

Foreign body localization anywhere in the body when other

conventional techniques have failed to resolve the problem

(e.g., F.B. :orbit, globe of eye, intracranial or extremity).

Conditions for which CT scanning is more hazardous than or diagnostically

inferior to other procedures were not included in the list of indications .

For some indications listed, other tests may be more appropriate in

particular patients. If other diagnostic tests have permitted a definitive

diagnosis to be made, CT scanning IS justified only for planning treatment.

Conversely, if a CT scan establishes a definitive diagnosis, additional

diagnostic tests are unjustified. Sometimes, tests may complement each

other either by providing difterent information or when one test succeeds

after the first has failed to yield useful information. Recent studies

comparing CT scanning with ultrasonic imaging of the abdomen suggests

the two methods are complementary. (20)

Based on current evidence, CT is not superior in all applications. For

dynamic studies of the circulatory and digestive systems and for highresolution radiography in which structural details below a millimeter must

be discerned, CT cannot compete with conventional radiographic techniques.

In mammography, for example, xeroradiography provides definitive diagnosti c

information at a lower cost, although at a higher radiation level .

Ultrasonic imaging is safer , and, therefore, diagnostically superior t o

CT scanning in obstetrics and gynecology. In cardiology, TM mode and

real-time ultrasonic imaging provide more valuable data than do currently

available CT scanners . CT scanning cannot replace those nuclear medica l

techniques that provide unique information about body functions and

body chemistry, as in the case of thyroid scans.

Because CT scanning of the body is an efficacious diagnostic tool for

the conditions listed above on the basis of current standards of evidence,

the committee recommends that CT scanning of the body when used for

appropriate indications be recognized as a covered service under thirdparty reimbursement plans until and unless a decision is made to require

more demanding standards of evidence for these decisions . However,
experience with body scanning is evolving rapidly and the list of indicator s

for which coverage is warranted should be reviewed at least every six

months. Therefore, the committee recommends that:

● CT scanning of both the head and body, when

appropriately used for specified indication s

should be a covered diagnostic service unde r

third-party reimbursement plans, acceptin g

as criteria of efficacy the usual standard s

of clinical practice .

As with any radiologic procedure, the clinician must exercise caution

in ordering number and extent of studies and repeat studies, since

radiation dose varies widely with number of slices and area examined,

and with the equipment used.
Exhibit 2:

New Indications for Computed Body Tomography. Update to indications published

in the April 1977 policy statement of the Institute of Medicine by the Society for

Computed Body Tomography, July 1979. Published in the American Journal of

Roentgenology, July 1979.

Special

Report

Society for

Computed Body

Tomography

1979 American Roentgen Ray Society, Reprinted with permission.

New Indications for

Computed Body

Tomography

The Society for Computed Body Tomography has prepared the following list

of indications for computed tomography in extracranial applications. These new

guidelines are intended to clarify, update, and augment the indications published
INDICATIONS FOR CT AJR 133 , July 1979

Indications for Body CT

Neck

● Determinationsmatton of the extent of primary and secondary

neoplasms of the neck.

. Evaluation of bony abnormalities of the cervical spree

● Determination of extent of intrathoracic spread in selected

patients with bronchogenic carcinoma including mediastinal or pleural Invasion.

including neoplasms, fractures, dislocations, and congenital anomalies. Chest Wall

● Localization of foreign bodies in the soft tissues, hypo- ● Determination of extent of neoplastic disease.

pharynx, or larynx and assessment of airway integrity — Assess bone, muscle, and subcutaneous tissues

after trauma. — Detection of intrusion into thoracic cavity or spinal

● Evaluation of retropharyngeal abscesses canal

Mediastinum

● Evaluation of problems presented by chest radiograph

— Mass .

— Differentiation among cystic, fatty, or solid nature

— Localization relative to other mediastinal structures.

— Mediastinal widening.

— Assessment of whether cause IS pathologic or

anatomic variation

— Distinction of solid mass, vascular anomaly, or

aneurysm, and physiologic fat deposition.

— Hilu m

— Differentiation of enlarged pulmonary artery

from solid mass when conventional tomography

fails or IS not capable of making this distinction

— Paraspinal line widening.

— Distinction among lymph node enlargement,

vascular cause, or anatomic variant

● Search for occult thymic lesion

— Detection of thymoma or hyperplasia in selected

patients with myasthenia gravis when plain chest

radiography IS negative or SUSPICIOUS

Lung

● Search for pulmonary lesions

— Detection of occult pulmonary metastasis when

— Extensive surgery IS planned for a known primary neoplasm with a high propensity for lung

metastasis or for apparent solitary lung metastasis.

— Detection of primary tumor in patient with positive

sputum cytology and negative chest radiography

and fiberoptic bronchoscopy.

—— Assessment of lung and mediastinum for underlying pleural effusion and the postpneumonectomy

fibrothorax for recurrent disease

● Search for diffuse or central calcifocation in a pulmonary

nodule when conventional tomography IS Indeterminate

Percutaneous Needle Biopsy

● Assist biopsy of Iesions when fluoroscopic guidance ininadequate.

— Certain mediastinal masses.

— Mass low in costovertebral angle or obscured by

overlying bone.

Heart

● Examinations of Intracardiac anatomy are not indicated

at this time. Future advances in CT equipment may allow

more clinically useful demonstration of cardiac anatomy

and physiology.

● Distinction of cardiac (e. g., ventricular aneurysm) from

pericardiac (e.g., mediastinal or pulmonary Iesion) mass.

● Detection of aortacoronary vein graft occlusion IS possible

with Intravenous contrast medium bolus with third- and

fourth-generation scanners.

Major Blood Vessels

● Evaluation and detection of thoracic aortic aneurysms

● Screening and measurement of abdominal aortic aneurysms when ultrasound fails or IS unavailable

● Detection of Intraluminal clots, chrome leakage, and rupture of thoracic and abdominal aneurysms.

● Evaluation of aortoprosthetic disruption

● Evaluation of suspected infection of synthetic grafts of

the major vessels

● Detineation of relation of major vessels to retroperitoneal

tumors, infections, or other abnormalities.

● Demonstration of invasion of vena cava by tumor

Spine

● Type I examination. No contrast medium Type II examinatlon: Dilute metrizamide. Type Ill examination Concentrated metrizamide Installed originally for conventional

myelography with subsequent CT, performed within 4

hours after metrizamide instillation.
A.JR 133, JUIV 19 ?9 INDICATIONS FOR CT

●

●

●

●

●

●

●

Evaluation (type 1) of spinal stenosm to determine extent

and specific causes of bony and soft tissue encroachment.

— Diffuse Wmal stenosis, congenital or acquired.

— Localized spinal stenows, associated with degenerative disease or malahgnment.

— Posttraumatic stenosw: detection of fracture fragments or hematoma.

— Post:;pmal fwon stenosm: fusion bone over -

growth.

— Detection of midline or foramenal spurs not seen on

plain films.

— Combined causes mcludmg degenerate, latrogemc, traumatic, Infection/tumor, as well as hermat!cms of the nucleus pulposus.

Evaluation (types I and 11) of congenital dysraphlc abnormalities (splna blfida, menmgomyelocele, menmgocele,

dlastematornyeha).

Evaluation !type I or 11) of spinal cord and/or nerve root

masses, usually as secondary procedure to further determme nature and extent of Ieslon.

Locahzatlor procedure (type O for CTqulded btopsy or

aspwation.

Evaluation (type 1) of nature and extent of boney or

paraspinal tumors and Inflammatory masaea.

Following nmdiagnostlc conventional myelography (type

I or II procedure) using myelogram and/or climcal findings

to spectfy CT level(s).

Altemamre procedure (type 1) m Sltuatlons precluding

standard myelography as primary examination (allerglc

hwtory, mechanical dlfficultles, emOtlOnal faCtOrS).

Rotroperitonelum

●

●

●

●

●

DetectIon of pnma~ malignancies such as those of mesenchymal, neural, Iymphatlc, and embryomc rest ongm,

melanomas and bemgn conditions, such as cysts that

may mimic nalignancles.

Staging of nodal and extranodal extension of Iymphomas

and other t@es of retropentoneal metastasis from varIOUS primary sites (e g., mltlal staging or detection of

recurrent metastatlc testicular tumor).

Detectton of retropentoneal abscess or hemorrhage (hematoma); localization for needle aspwatlon.

Further evaluation when other radlologlc studies unexpectedly suggest abnormality, such as dewated ureter by

normal relropentoneal fat.

Gutdance fcjr retropentoneal b!opsy

Peritoneum

● Detectton and differential dlagnosls of free or Ioculated

Intrapentoneal flutd collections and inflammatory processes.

● DetectIon clf Primary or secondary peritoneal masses

(neoplasms and abscesses, etc.)

. Guidance for the asptratlon of Intrapentoneal fluld collechons and peritoneal masses.

Liver

. Evaluation of space+xcupymg lemons.

— Primary and secondary malignant neoplasm and

clinically significant bentgn lesions, such as adenomas, cavernous hemanaiomas, and abeceasea. —

—

—

—

—

—

Initial detection; whether liver is primary organ

of interest or examined as part of CT evaluation

of other suspected abdominal disease, such as

pancreatic carcinoma, m which knowledge of

associated hepatic Ieslons IS of clinical importance.

Confirmation of the presence or clarification of

the nature of hepat!c Ieslon(s) suspected or

found on other !magmg procedure. such as an

mconcluswe or nonspeaftc radlonuchde scan.

Dlfferentlatlon of sohd, cystic, inflammatory,

and vascular lesions.

Assessment of location, extent, and number of

Iestons, when such mformatlon IS of clinical

Importance.

Guidance for hepatic biopsy and aspwatton.

Assessment of response to ncmoperatwe therapy.

. Evaluation of trauma.

— Detection of hepatlc Iacerat!on and mtrahepatic and

subcapsular hematoma, and determination of extent

of Injury m cases of blunt or penetrating trauma

. Evaluation of diffuse liver dmeaae.

— CT currently of limited value, but may be useful m

specific cwcumstances, such as cletection of fatty

Inflltratlon of the liver and conditions of exceaswe

Iron depmwtion (hemochromatosw) and glycogen

storage disease m chddren.

Spleen

● Detection and estimation of age of subcapsular hematoma.

● DetectIon of Intrasplemc mass and differentiation of solld,

cystic, and inflammatory Ieslons.

Pancrees

●

●

●

Evaluation for possible mass Ieslon.

— DetectIon of primary tumor and its extent.

— Search for primary lesion m patient with distant

metastasis.

— Evaluation of jaundiced patient.

— Evaluation of suspected pancreatitis.

— Evaluation of patient with posstble upper abdommal

masses.

— Sertal assessment of regression or persistence of

tumor during and after therapy.

Dlfferentlatlon of pancreatic from paraptmcreatlc mass.

— Dwtmct!on among sohd, cystic, vascular, inflammatory, calclfied, and fatty lesions.

DetectIon of comphcatlons of acute or subacute pancreatltls.
INDICATIONS FOR CT AJR 133, July 1079

— Detection of pseudocysts, thew number, size, and

extent

— Serial assessment of paeudocyst followlng medical

or surgical management.

— Oetection of abscess: determination of stze and

extent.

. Guidance of percutaneous pancreatic biopsy and aspiration procedures.

Kidneys

. Evaluation of kidneys when excretow urography or artglography IS contraindicated by risk of serious reaction to

contrast medium.

. Evaluation of renal mass or suspected mass detected on

another Imagmg procedure.

— Dtfferentlatfon of an anatomic variant from a pathologic process,

— Dlfferentlatlon of a benign fluld-fdled cyst from a

cyst and/or solld renal mass.

— Oetermmat!on of the extent of renal neoplasm before and after treatment.

. Evaluation of selected patients, suspected clmlcally of

renal neoplasm, when excretory urogram IS negatwe.

. Evaluation of juxtarenal (para- or perirenal) Iestons seen

or suspected on excretory urography

— OMerentlatlon of anatom!c vanant from pathologic

process.

— Oetermmahon of the cause, Iocatlon, and extent of

a Ieslon.

● Evaluation of urograph!c nonfunctlonmg ktdney(s)

— Assessment of stze, outline, and parenchymal thickness.

— DetectIon of obstruction, determination of site,

cause, and extent of disease process

— Documentation of congemtal absence.

— DetectIon of mlnlmally calclfled renal calculi no t

demonstrated by conventional techmques.

. Oetermlnatlon of cause of renal and perlrenal calcification

● Assessment of extent of renal trauma.

. Guidance for antegrade nephrostomy, renal biopsy, or

mass as~lratlon.

Gallbladder

s CT IS not Indicated at th!s time unless oral and Intravenous

cholecystograPhY and ultrasonography are mdetermmate

or unobtainable

Biliary Tree

. Dlfferentlatlon of obstructive from nonobstructwe jaundice.

● Determlnatlon of site and etiology of obstruction

. Determlnatlon of etiology of obstruction

Gaatrointeatinal Tract

. CT IS useful m the assessment of extent or recurrence of

tumor or tumorhke condition mto the mesente~ or adjacent Ofgans. CT is not currently indicated for the detection

of mucosal Ieslons.

Adrenai Gland

. Evaluation of patients with biochemical ewdence of adrenal hyperfunction

. Evaluation of patients with susplcton of adrenal mass

found on conventional radiographic exammatlon.

● Guidance for adrenal biopsy.

Uterua and Ovariee

● Evaluation of mass detected by cltnlcal examination, after

posmve biopsy, after fatlure of ultrasound examtnatton, or

when strong chnlcal suspicion exists for a mass lesion.

● Evaluation of primary tumor and Its extent of spread: and

evaluation of secondaw tumor.

. Olfferentlatlon of solid, cystic, inflammatory, vascular, or

fany masses.

● Guidance for uterine and ovanan btopsy.

Bladder, Ureters, Proatate, and Seminal Veaiciea

● Evaluation of primary and secondary tumor, Including

extent of tumor.

● Dlfferentlatton of solid, cystic, inflammatory, vascular, or

fatty tumors.

. DetectIon of obstructing, mlrvmaily calctfled ureteral calCUII not detected by conventional studtes

● Guidance for biopsy

PISIVIC Bones

● Evaluation of bone Ieslons and accompanying soft tissue

extent

. Guidance for biopsy.

Muacuioakeietal System

●

●

●

●

●

Evaluation of selected patients with known or suspected

pnma~ bone tumors.

Evacuation of patients with suspected recurrence of bone

tumors.

Evaiuat!on of patients with suspected but Indefinite signs

of skeletal metastasis when Conventional studies fall to

clarify.

Evaluation of joint abnormalities dlfflcult to detect by

conventional methods.

Evaluation of patients with soft tissue tumors, either
AJR 133. Jutv 1979 INDICATIONS FOR CT

known or suspected to confwm presence and deterrmne

extent.

● Guidance for biopsy.

Therapy Planning and Followup

Defmmon of cross-sectional anatomy and attenuation

coefftclen of bone and soft tmsue m tumor-bearmg areas

for the purpose of planning radiation therapy.

Prowslon of baseline prior to radlatton therapy and

chemotherapy from whtch effectweness of these treatment modallt!es can be judged

Conformance as part of an estabhshed and acceptable

●

follow-up protocol.

Evaluation of s!gns and symptoms suggesting progression, recurrence, or fadure of therapy.

Foreign Body Localization

● In chest and abdomen when other traditional lmagmg

techmques prowde mrsufficlent Information.

ACKNOWLEDGMENT

The Soclefy IS greatly mdebled to Dr Peter L.wmgston, Hollywood

Memorial Hospital, Florida for hm input and Joan Collie for her

assistance m manuscript preparation

Members and Officers of the Society for Computed Body Tomography

Ralph J, Alfldl, M.D.

Case Western Reserve Umverslty School of Medcme

Ronald G. Erens, M.D.

Mallmckrodt Institute of Rad!ology

Wilham Gler n, M D.

Long Beach Memorial Hospital

John Haaga M D

Cleveland C Inlc

George S Harell, M.D.

Stanford Un verstty Medical Center

Robert R Hattev, M.D.

Mayo Clmlc

Ehas Kazam, M D.

New York Hmspltal-Cornell Medcal Center

Stuart S. Sagel, MD

Malhnckrodt Institute of Radiology

W Frederick Sample, M.D.

UnwersNy of Cahfomla Center for Health Sctences

Dieter Schelhnger, M.D.

Georgetown Unwerslty School of Medicine

Patrick F Sheedy, 11, M.D.

Mayo Cltnlc

Robert J. Stanley, M.D.

Mallmckrodt Institute of Radtology

Dawd Stephens, M.D.

Mayo Clime

Jack Wittenberg, M.D.

Massachusetts General HospNal

Melvyn Korcbkln, M D

Duke Umverslty School of Medlcme
Exhibit 3:

New Policy CT Approved. Policy statement by the American College of Radiology,

October 1980. Published in the ACR Bulletin, October 1980.

 American College of Radiology, reprinted with permission.

New Policy on CT Approved

Computed tomography is a proven radiologic modality which provides valuable clinical information in the early detection, differentiation and demarcation-of

disease.

Abundant documentation of its safety and diagnostic efficacy has been presented in the scientific literature, It has totally changed the practice of radiology

and has become the primary diagnostic modality for a variety of presenting

problems. it is even more widely accepted as a supplement to other imaging

techniques. It is particularity helpful in solving problems where there is conflicting information from other radiologic or laboratory studies. It frequently replaces other examinations, many of which carry greater discomfort and expense.

APPROPRIATE SUPERVISION OF CT FACILITIES

1) Computed tomography IS a form of medical imaging which, like other x-ray

and radionuclide procedures, involves the exposure of patients to ionizing

radiation. Its use should be limited to physicians with the necessary training

in radiation protection to optimize examination safety. Radiation physics

support and a trained technical staff must be provided.

a) Necessary training in radiation protection to optimize examination safety

should include formal structured didactic and practical courses in radiation physics, monitoring and safety including actual experience in the use

of radiation monitoring equipment and the design and use of equipment

for radiation protection. Certification by the American Board of

Radiology would be acceptable as verification of this level of competence

for a physician,

b) Radiation physics support should include regular, periodic inspection,

and performance and quality testing of both the scanning equipment and

the protection devices. Access to the consultative services of a qualified

radiation physicist should be readily available at all times

c) At least one registered radiologic technologist should be present at ail

times during the actual operation of the scanning equipment for patient

use. Trained technologists with prior experience in operation of the

equipment must be available in sufficient numbers to allow patient access

to the equipment over a broad range of time.

2) The different imaging procedures now available in diagnostic radiology, i.e.,

angiography, ultrasound, radionuclide imaging and computed tomography

make selection and interpretation of appropriate studies for a specific patient

more complex. A referring physician should consult with a radiologist with

experience in imaging with ail available modalities concerning the procedures and sequence best suited to answer a specific clinical question.

Such experience in the selection, execution and interpretation of appropriate imaging procedures is usually obtained during radiological residency

training or fellowships and supervised clinical experience following such

radiological training. Any training program or experience should emphasize

gross and cross-sectional anatomy, radiation absorption characteristics of the

involved tissues and the pharmaco-physiology of contrast media in the organ

systems of interest,

3) Each computed tomographic procedure must be individually designed for the

problem presented by the patient. The radiologist should be directly involved

in the performance of the procedure, determining its extent, administering

and/or supervising the use of contrast media and modifying the study after

immediate interpretation of the initial images obtained.

Direct involvement in the performance of scanning procedures requires:

a) Selection of the appropriate scanning sites, levels and sequences for each

patient.

b) Determination of the need for contrast media (if any), the type and quantity of contrast, and the route and method of administration.

C) Administration or supervision of the administration of the contrast.

d) Recognition and proper treatment of any and all contrast reactions
Council OKs New CT Concept

e) Modification of the procedure after viewing the initial scans in order to

optimally demonstrate the appropriate findings in each case.

ALL of the elements listed are equally necessary regardless of the anatomical

area being examined.

APPROPRIATE UTILIZATION OF CT SCANNERS

The diagnostic efficacy of the CT is no longer in question. In general,

guidelines for its utilization are based upon:

1) Determining the site, type and extent of disease.

2) Immediate diagnosis of trauma and other medical emergencies.

3) Problem solving in patients when conflicting information exists.

4) Radiation therapy planning and monitoring.

5) Follow-up of treatment results.

6) Guidance for biopsy control.

There are many specific clinical areas in which CT is recognized as a necessary

and definitive diagnostic modality. However, specific indications for CT scanning should be determined locally by hospital medical staffs or other recognized

peer review groups.

APPROPRIATE DISTRIBUTION OF COMPUTED

TOMOGRAPHY SCANNERS

Adequate distribution of safe and reliable CT scanning service is necessary to

assure accessibility to appropriate and equitable medical care for all patients. CT

scanners should be located in facilities which permit their availability to patients

of all physicians. No one set of criteria meets the dual requirements of medical

need and economic justification. Determination of need for a CT scanner should

be made at the local level.

In addition to demographic and geographic factors, special considerations

should be given to the capabilities and demands of the medical community.

Teaching and research centers, regional medical facilities, cancer treatment programs, neurological facilities and trauma centers all have a demonstrated need

for CT scanning capabilities. The existence of any of these may produce numerical relationships between CT scanners and need indicators at a variance from

community criteria based upon population or utilization projections.

The location of a CT unit in a physician’s office should meet the same criteria

as for institutions. Instances when a CT unit is located other than in an acute

care hospital should be infrequent due to the interdependency of CT scanning

and specialized medical services.

The economic justification of a CT scanner depends upon sufficient patient

demand to allow reasonably full utilization of the unit. Capital costs are high and

depreciation over five years is prevalent. Operating costs are substantial, particularly when CT scanners are operated and available outside of normal working

hours. Provision must be made for updating and replacement of obsolescent

equipment. Utilization goals should be directed toward optimal performance,

allowing for maintenance, research and patient handling. They should not be set

so high as to generate marginal patient referrals or to impose unrealistic working

conditions for staff and supporting institutions.

SUMMARY

When appropriately located, properly utilized and correctly supervised, CT scanners can have a positive impact upon both the cost and the quality of medical

care. Through reduction or elimination of hospital stays, replacement of other

expensive and more hazardous diagnostic studies and avoidance of some operative procedures, CT scanning can contribute positively to cost containment. Earlier and more precise diagnoses will provide opportunities to modify therapeutic

approaches which may be expected to improve the outcome and/or the quality

of life. Access to this technology must therefore be assured to all patients who

may be expected to benefit from CT scanning.
Exhibit 4:

Criteria for Clinically Indicated Head Scans. Used by the Colonial Virginia

Foundation for Medical Care, Virginia Beach, Va., in a concurrent review of CT of

the head in PSRO Area V, Va., 1980.

Criteria for Clinically Indicated Head Scans (16)

Criteria

1—Suspected Intracranial Hemorrhage

2—Suspected Lesion Sec. Head Trauma

3—Suspected Neoplastic Lesion

4—Congenital Lesions

5—Skull Lesions Undefined by X-Ray

6—Detection Cerebral Met. Before Tharacic Surgery

7— Eval. Treatment of Documented Cerebral Lesion

8—Delineation of Residual Structural Abnormality After Neur. Disease, Injury

9—Papilledema, Obtundation or Coma

10—Apraxia or Aphasia

11 —Visual Field Defect

12—Ataxia, Nystagmus, Dsmetria, Tremor or Incoordination

13— Hemiparesis or Hemiplegia

14—Exophtalmos After Thyroid Disease Ruled Out

15—inequality of Pupils, Ocular Palsies, Ocular Ptosis

16—Proptosis (suspected orbital tumor)

17— Headache

18—Persistent Vertigo Unresponsive to Outpatient Management

19—Seizures (grand mal or complete, focal or partial, with altered level of

consciousness)

20—Acute Focal Neurological Symptoms

21 —Unexplained Dementia, Progressive Mental Deterioration

22— Does Not Meet Criteria
Appendix E.— National Guidelines for Health Planning:

Standards for CT Scanners

(Federal Register, March 28, 1978)

Section 5121.210

Computed Tomographic Scanners

(a) Standard. A computed tomographic (CT) scanner (head and body) should operate at a minimum of

2,500 medically necessary patient procedures per

year, for the second year of its operation and

thereafter.

(2) There should be no additional scanners ap

-

proved unless each existing scanner in the health

service area is peforming at a rate greater than 2,500

medically necessary patient procedures per year.

(3) There should be no additional scanners ap

-

proved unless the operators of the proposed equipment will set in place data collection and utilization

review systems.

(b) Discussion. Because CT scanners are expensive

to purchase, maintain, and staff, every effort must be

made to contain costs while providing an acceptable

level of service. Intensive utilization of existing units,

regardless of location, will prevent needless duplication and limit unnecessary health care costs.

Estimates and surveys for efficient utilization of

CT scanners range from 1,800 to over 4,000 patient

procedures a year. (One patient procedure includes,

during a single visit, the initial scan plus any necessary additional scans of the same anatomic area of

diagnostic interest. )

The Institute of Medicine, the Office of Technology Assessment, and others have carefully reviewed

these data and the capabilities of various available

units. The Department has reviewed these analyses

as well as the extensive literature that has been

developed on CT scanners.

In arriving at a standard for the use of these

machines, the Department has considered a variety

of factors, including the difference in time required

for head scans and body scans, the need for multiple

scans in some patient examinations, variations in patient mix, the special needs of children, time required

for maintenance, and staffing requirements. Moreover, the Department considered the actual operating

experience of hospitals and institutions reflected in

reports on the use of CT scanners.

The standard set in the Department’s guidelines is

intended to assure effective utilization and reasonable cost for CT scanning. These machines are

expensive, and therefore must be used at levels of

high efficiency if excessive costs are to be limited.

The Department recognizes that the cost of some

machines is declining, particularly those that perform

only head scans which require less time. For machines that do predominantly head scans, the standard represents an efficient but more easily attainable

level of utilization.

For scanners capable of performing both head and

body scans, it is imperative that the y be effectively

used in order to spread the high capital expenditures

over as much operating time as possible. As the Institute of Medicine report stated, “The high fixed cost

of operating a scanner argue for as high a volume of

use as the equipment allows without jeopardizing the

quality of care. ”

The Department believes that a .50- to 55-hour

operating week is both consistent with the actual

operating experience of many hospitals and a reasonable target. Based on reported experience for the time

required for both head scans and body scans, the

Department estimated that a patient mix of about 60-

percent head scans and about 40-percent body scans,

making allowance for the other factors identified

above, would allow a CT scanner to perform about

2,500 patient procedures per year if it is efficiently

used about 50 to 55 hours per week. This estimate

assumes a higher percent of body scans than is currently being performed. If fewer than 40-percent

body scans are performed, then 2,500 patient procedures would involve less than 50 to 55 hours per

week. Basing the standard on a higher percentage of

body scans also takes account of current trends

toward increased proportions of such scans.

The Department believes that sharing arrangements in the use of CT scanners is desirable, in line

with the national health priorities of section 1502.

Individual institutions or providers should not

acquire new machines until existing capacity is being

well utilized.

In planning for CT scanners, the health systems

agency should take into consideration special circumstances such as: 1) an institution with more than

one scanner where the combined average annual

number of procedures is greater than 2,500 per scanner although the unit doing primarily body scans is

operating at less than 2,500 patient procedures per

year; 2) units which are, or will be, devoting a significant portion of time to fixed protocol institutionally

approved research projects; and 3) units which are,
or will be, servicing predominantly seriously sick and adequately plan the distribution and use of CT

pediatric patients. scanners in the area. The data to be collected should

A summary of the data collected on CT scanners include information on utilization and a description

should be submitted by the operators to the appro- of the operations of a utilization review program.

priate health systems agency to enable it to
Appendix F.—Amendments to Regulations Governing

Reviews of CT Scanners Under 1122 and CON Programs

(April 25, 1979)

Review of Proposed Capital

Expenditures for CT Scanners Under

the Capital Expenditure Program of

Section 1122 of the Social Security Act

42 CFR Part 100

Inclusion of Computed Tomographic Scanning

Services.

Agency: Public Health Service, HEW.

Action: Interim regulations.

Summary: This notice sets forth interim rules regarding reviews of proposed capital expenditures for

computed tomographic (CT) scanner “services” under the capital expenditure review program of section

1122 regulations with minor revisions, a polic y

notice on this matter which has already been issued

by the Department. Interested persons are invited to

submit written comments and suggestions concerning

these interim rules.

Dates: These regulations are effective on April 25,

1979. Comments must be received on or before June

25, 1979.

Address: Interested persons may submit written

comments on these interim regulations to the Acting

Director, Bureau of Health Planning, Health Resources Administration, Center Building, Room

6-22, 3700 East-West Highway, Hyattsville, Md.

20782. The comments will be available for public inspection at the above address between the hours of

8:30 a.m. and 5:00 p.m., Monday through Friday.

For Further Information Contact: Colin C. Riorrie,

Jr., Ph. D., Acting Director, Bureau of Health Planning, 3700 East-West Highway, Center Building,

Room 6-22, Hyattsville, Md. 20782, 301 /436-6850.

Supplementary Information: Section 1122 of the

Social Security Act (42 U.S. C. 1320a-1) provides for

a program for reviews of certain proposed capital expenditures by designated planning agencies (DPAs)

in participating States to determine their conformity

with applicable health plans, standards, and criteria.

Subject to certain procedural requirements, the Department will not provide reimbursements, under the

medicare, medicaid, and maternal and child health

programs for expenses related to capital expenditures

found by DPAs to use out of conformity with these

plans, standards, and criteria. Section 1122(g) of the

Social Security Act defines a capital expenditure subject to review as one which under generally accepted

accounting principles is not properly chargeable as

an expense of operation and maintenance, and

which: 1 ) exceeds $100,000 or 2) changes the bed

capacity of the facility with respect to which the expenditure is made, or 3) substantially changes the

services of the facility with respect to which the expenditure is made. The third of these categories is

further defined in the regulations under section 1122

(42 CFR part 100) as including an expenditure “which

results in the addition of a clinically related (i. e.,

diagnostic, curative, or rehabilitative) service not

previously provided in the facility . . . (42 C F R

100. 103(a)(2)(iv) ).

On February 3, 1978, the Department issued section 1122 Notice 78-05 to clarify the requirements of

section 1122 with respect to CT scanner services. The

purpose of these interim regulations is to incorporate

that policy notice with minor revisions, into the section 1122 regulations, to the extent it is not already a

part of these regulations.

The Department recognizes that the existing regulations do not explicitly include all aspects of the

February 3 notice and accordingly amends the regulations so that they will, subject to the following

revisions. First, because the Health Maintenance

Organization (HMO) Amendments of 1978 (Public

Law 95-559) deleted from section 1122 all references

to HMOs, expenditures by or on behalf of an HMO

are no longer subject to review, unless they are also

on behalf of a health care facility which is subject to

review. Thus, if an HMO proposes to purchase a CT

scanner on behalf of a hospital, the proposed expenditure is subject to review. Second, the regulations

specify that the proposed expenditure for a CT scanner by or on behalf of a health care facility is subject

to review, whether it is for a fixed or a mobile CT

scanner. Third, the purchase of an additional CT

head scanner by or on behalf of facility which

already has such a scanner is not subject to review if

it costs less than $100,000 because this is a service

which was “previously provided in the facility. ” (See

Accordingly, the regulations are amended as set

forth below, so that the acquisition of a CT scanner

costing $100,000 or less will be governed by the following principles:

A. The purchase of a CT scanner by or on behalf

of a health care facility involving a capital expend-
iture less than $100,000 is subject to review if it results in the addition of a new diagnostic service.

B. Such a purchase involving a capital expenditure

of less than $100,000 is considered to be the addition

of a new diagnostic service unless the CT scanner is

in addition to or replaces an existing scanner.

C. If a health care facility proposes to purchase a

CT full-body scanner to replace an existing CT head

scanner or to purchase equipment to upgrade an existing head scanner to a full-body scanner, this purchase is considered to result in a new diagnostic service for the facility and, therefore, is subject to section

1122 review.

D. If a health care facility proposes to offer the

services of a mobile CT scanner, this is considered

the addition of a new diagnostic service unless it is in

addition to or replaces an existing fixed or mobile CT

scanner of the same type (head or full-body scanner).

E. The lease (acquisition through a comparable arrangement) or the donation of a CT scanner by or on

behalf of a health care facility is also subject to section 1122 review if its purchase, under the principles

noted above, would have required review. (See 42

CFR 100.103 (b).)

F. Any capital costs associated with installing a CT

scanner, as well as the costs of any renovations to accommodate its installation or use, are to be included

in the estimated cost of the proposed capital expenditure under the section 1122 review program.

In relation to these regulations, attention is called

to another interim regulation, also being issued in

this edition of the Federal Register, which amends 42

CFR parts 122 and 123 to require review of fixed and

mobile computed tomographic scanners in satisfactory certificate of need programs under title XV of

the Public Health Service Act.

For the reasons set forth below, the Secretary has

determined that public participation in rulemaking

before issuance of these regulations and a delay in

their effective date would be impracticable, unnecessary, and contrary to the public interest. First, this is

in large part simply a clarification of the Departmen t’s interpretation of the existing regulations. Second, given the recent proliferation of CT scanners, a

delay in implementing these revisions and clarifications would likely result in the purchase or other

acquisition of scanners which are not needed. Third,

because these amended regulations complement

amendments to regulations governing certificate-ofneed reviews under title XV of the PHS Act and

because those regulations are being issued on an interim basis to give those States needing revised legislative authority the maximum time possible to obtain

it. Proper coordination of reviews requires that these

regulations also be effective upon publication. As

noted above, however, the public is invited to submit

comments on these amended regulations during the

next 60 days, and the Secretary will revise the regulations further as warranted by his evaluation of the

comments received.

The Assistant Secretary for Health, with the approval of the Secretary of Health, Education, and

Welfare, amends 42 CFR Part 100 as set forth below.

Dated: January 30, 1979. ●

Julius H. Richmond, Assistant Secretary for

Health.

Approved: April 16, 1979.

Joseph A. Califano, Jr., Secretary

Section 100.10 is amended by adding a t

its end the following sentences:

(a) . . .

(2) . . .

(iv) . . . The addition of CT scanner services not

previously provided in or through the facility is a

substantial change of services within the meaning of

this subparagraph, whether these services are provided through a fixed or mobile CT scanner. The addition of CT full-body scanner services is included in

the previous sentence if it is added to or replaces existing CT head scanner services.

(Sec. 1122, Social Security Act, 86 Stat. 1386 (42

U.S. C. 1320a-1): sec. 1102, Social Security Act, 49

Stat. 647, as amended (42 U.S. C. 1302). )

(FR Doc. 79-12637 Filed 4-24-78, 8:45 a.m. ) Billing

Code 411 O-83-M.

Reviews of Proposed New Institutional

Health Services by SHPDAs and HSAs

Under State CON Programs

42 CFR Parts 122 and 123

Inclusion of Computed Tomographic Scanning

Services.

Agency: Public Health Service, HEW.

Action: Interim regulations.

Summary: The Assistant Secretary for Health,

with the approval of the Secretary of Health, Education, and Welfare, proposes to amend the regulations

governing reviews of proposed new institutional

health services by State health planning and development agencies (SHPDAs) and health systems agencies

(HSAs). These regulations set forth requirements for

satisfactory State certificate-of-need (CON) programs. The amendments would require review of

radiological diagnostic health services which are proposed to be offered in, at, through, by, or on behalf

of a health care facility or health maintenance

organization, which are to be provided by fixed or
mobile CT scanning equipment whether or not an addition to or replacement of these services offered by

fixed or mobile CT equipment. Interested parties are

invited to submit written comments and suggestions

concerning these proposed amendments.

Dates: These regulations are effective on April 25,

1979, subject to the discussion set forth under “Supplementary Information” below. Comments received

on or before June 25, 1979, will be considered.

Address: Interested persons may submit written

comments on the interim regulations to the Acting

Director, Bureau of Health Planning, Health Resources Administration, Center Building, Room

6-22, 3700 East-West Highway, Hyattsville, Md.

20782. The comments will be available for public inspection at the above address between the hours of

8:30 a.m. and 5:00 p.m., Monday through Friday.

For Further Information Contact: Colin C. Rorrie,

Jr., Ph. D., Acting Director, Bureau of Health Planning, 3700 East-West Highway, Center Building,

Room 6-22, Hyattsville, Md. 20782, 301/436-6850.

Supplementary Information: Section 1523(a)(B) of

the Public Health Service Act (“the Act”) requires

each fully designated SHPDA to “administer a State

CON program which applies to new institutional

health services propose to be offered or developed

within the State and which is satisfactory to the

Secretary” of Health, Education, and Welfare, Section 1523(a)(5) of the Act requires each SHPDA to

make findings as to the need for proposed new institutional health services, after consideration of recoin-”

mendations submitted by HSAs. Section 1513(f) requires HSAs to assist SHPDAs by reviewing and

making recommendations concerning the need for

proposed new institutional health services. Institutional health services are defined in section 1531(5) of

Code of Federal Regulations. Sections 122.304 and

123.404 establish thresholds for review of institutional health services. The amendments add an additional threshold: radiological diagnostic health services

provided by fixed or mobile CT scanning equipment.

The Secretary, wishing to contain the rising costs

of health care, is concerned with the high cost of CT

scanning, both as to the initial cost of the equipment

and its subsequent operating expenses, These amendments require review of CT scanning services proposed to be performed in space leased or made available to any person by a health care facility or HMO.

As to mobile scanners, although it is realized that

there may be cost saving, since a number of institutions may share the same equipment, the offering by

a health care facility or HMO of services of mobile

scanners is also subjected to review by health planning agencies.

The Secretary notes that the amendments do not

necessarily require changes in any State’s statutes or

regulations or in any lists of services which may be

embodied therein. The amendments require simply

that, for a State CON program to be satisfactory}’, the

proposed services be required to be reviewed, and

those services not be offered or developed without a

prior determination of need and issuance of CON.

In relation to these amendments, the Secretary

calls attention to another interim regulation, also in

this edition of the Federal Register, which amends the

regulations for review of proposed capital expenditures under section 1122 of the Social Security Act to

clarify the coverage of CT scanners under that program.

Effective date provisions. -–For the reasons set

forth below, the Secretary has determined that public

participation in rulemaking before issuance of these

regulations and a delay in their effective date would

be impractical and contrary to the public interest.

First, given the recent proliferation of CT scanners, a

delay in implementing these regulations would likely

result in the purchase or other acquisition of scanners

which are not needed. This is especially true with

regard to mobile CT scanners. Hospitals can now receive reimbursement through medicare for fixed

scanners, but not for scans from mobile scanners.

Medicare, however, will soon begin reimbursing hospitals for scans from mobile scanners as well. As a

result, it is expected that sales of mobile scanners will

increase significantly. Second, in order to give those

States which need revised legislative authority to implement these amendments the maximum time possible to obtain it, these regulations should be effective

immediately.

As noted above, however, the public is invited to

submit comments on these amended regulations during the next 60 days, and the Secretary will revise the

regulations further as warranted by his evaluation of

the comments received.

As noted above, these regulations are effective

upon publication in the Federal Register. However,

because the question of when the Secretary will

determine whether a State’s CON program is satisfactory is not addressed in the regulations themselves, the Secretary has decided as follows.

Initially, the Secretary notes the relevant statutory

provisions under section 1521(b)(2)(B) of the Act the

term of a conditional designation agreement of

SHPDA may not exceed 36 months. A fully designated SHPDA must, under section 1521(b)(3) be

capable of performing all of the functions specified in

section 1523, including CON reviews, during its first

year of full designation, If, on September 30, 19&0, a

designation agreement under section 1521 is not in ef-
feet in a State, the Secretary is prohibited by section

1521(d) from paying certain Federal funds for the

development, expansion, or support of health resources in that State.

Accordingly, in determining whether a SHPDA is

capable of administering a satisfactory CON program (which is a necessary element in establishing

eligibility for full designation), the Secretary will require compliance with these revised regulations as

follows:

(1) For States in which SHPDAs do not require additional legislative authority to implement the revisions to these regulations, the Secretary will require

their implementation within 6 months after publication of this document in the Federal Register, and in

accord with other SHPDA designation requirements.

(2) For those States in which the SHPDAs do require additional legislative authority to implement

the revisions to these regulations, the Secretary will

require their implementation within 6 months after

the end of the earliest legislative session in which

legislation to permit this implementation may be introduced and acted upon, and in accord with other

SHPDA designation requirements.

After consulting with their legal counsel, SHPDAs

should contact the appropriate DHEW Regional

Office to determine into which of these categories

they fall.

Accordingly, 42 CFR Part 122, subpart D, and 42

CFR part 12, subpart E, are amended in the manner

set forth below.

Dated: April 13, 1979.

Julius B. Richmond, Assistant Secretary for

Health.

Approved: April 16, 1979.

Joseph A. Califano, Jr., Secretary.

1. Section 122,304 of part 122 of title 42 is

amended by adding to its a new paragraph (a)(5), to

read as FOllOWS:

$122.304 of part 122 of title 42 is amended by adding to it a new paragraph (a)(5), to read as follows:

(a) . . .

(5) Radiological diagnostic health services which

are offered in, at, through, by or on behalf of a

health care facility or HMO (including services offered in space leased or made available to any person

by the health care facility or HMO), which are provided by fixed or mobile CT scanning equipment except where these services are an addition to or replacement of the same service offered in, at, through,

by, or on behalf of the health care facility or HMO.

For purposes of this subparagraph, a CT head scanner and a CT body scanner, do not provide the same

service and a CT fixed scanner and a CT mobile scanner do not provide the same service.

2. Section 123.404 of part 123 of title 42 is

amended by adding to it a new paragraph (a)(5), to

read as follows:

to review.

(a) . . .

(5) Radiological diagnostic health services which

are offered in, at, through, by, or on behalf of a

health care facility or HMO (including services offered in space leased or made available to any person

by the health care facility or HMO), which are provided by fixed or mobile CT scanning equipment, except where these services are an addition to or replacement of the same service offered in, at, through,

by, or on behalf of the health care facility or HMO.

For purposes of this subparagraph, a CT head scanner and a CT body scanner do not provide the same

service, and a CT fixed scanner and a CT mobile

scanner do not provide the same service.

(Sec. 215 of the Public Health Service Act. 58 Stat.

690 (42 U.S. C. 216), sees. 1501-1536 of the Public

Health Service Act, 85 Stat. 2225-57 (42 U.S. C. 300kl-300n-5). )

(FR DOC. 79-12636 Filed 4-24-79, 8:45 a.m. ) Billing

Code 4110-83-M.
Appendix G.— Methods of Data Collection

The OTA list of computed tomography (CT) scanners from 1976 included 321 scanners, listed by location, type, and manufacturer of scanner, and date of

installation. That list, as well as the 1977, 1978, and

1979 updated lists, were developed using multiple

sources. First, the previous list was updated by

checking against a listing from the Food and Drug

Administration (FDA). In 1978, the updated list was

sent to all State planning agencies and selected urban

health systems agencies (HSAs). Those sources contacted were asked to make corrections on the updated list. Because of the necessity of many telephone

calls to HSAs in 1978, inquiry was made to all State

health planning agencies and HSAs in 1979. The first

letter was sent in February. Two followup letters

were sent to nonresponders. When State information

was incomplete and HSAs had not responded, they

were contacted by telephone. The same procedure

was followed in 1980, with the first letter sent in

May.

All States had information on the institutional location of CT scanners, but the information was often

incomplete. Some States knew only the names of institutions that had had an application for a certificate-of-need approved. Others knew which institutions had operational scanners, but did not know

how long they had been in operation or the manufacturer. When incomplete information on an operational scanner was received, and the HSA information was either incomplete or in conflict, the institution or physician was called. A special attempt was

made to identify out-of-office scanners. Frequently,

staff of HSAs were more aware of the locations of

such scanners than were staff in State agencies.

Only scanners delivering clinical services to patients were included. Thus, scanners registered by a

manufacturer, by a leasing company, or by a company providing mobile scanners were included only

if the site of clinical services could be identified.

The main effort in this study has been to ascertain

the geographic and institutional location of scanners.

No attempt was made to ascertain the owner of an individual scanner. Some States collect information

differentiating between scanners owned by radiologists but located in a hospital, and scanners owned

by a hospital. It was assumed that the location—

hospital or private office—was the important factor

in terms of access to the entire community. Scanners

owned by radiologists but located in hospitals were

treated exactly as were scanners owned by hospitals.

Even when a scanner was registered to an individual

physician, if its address indicated location within a

hospital, it was considered to be a hospital scanner. If

the scanner was located in a private clinic or physician’s office building close to the hospital, however,

it was considered to be a private scanner.

Other data for this report were collected from published literature and extensive interviews. Many of

the interviews are cited, as the information is not

available in any other source. Many individuals and

groups also furnished helpful written materials (see

app. I).

Based on these materials, a draft of the policy

information was developed and reviewed by the

OTA Health Program Advisory Committee at its

meeting of April 28, 1980. A draft of the entire report

was then developed and was sent to the committee

and to more than 100 individuals and groups for

review on August 1, 1980. Most comments were received by October 1, 1980. The final report was then

written based on the many excellent comments and

suggest ions.
Appendix H.—Glossary of Acronyms and Terms

Glossary of Acronyms

AAPSRO — American Association of Professional

ACR

AHPA

AS&E

BHP

BMD

BRH

CBA

CEA

CFR

CON

CT

DHEW

DHHS

DC

DEP

DOD

DPA

DQA

DR

DRR

DSR

FDA

FR

GE

HCFA

HECT

HMO

HRA

HSA

HSP

IOM

MCE

NAS

Standards Review Organizations

—American College of Radiology

—American Health Planning Association

— American Science & Engineering Co.

– Bureau of Health Planning (HRA)

— Bureau of Medical Devices (FDA)

– Bureau of Radiological Health (FDA)

— cost-benefit analysis

— cost-effectiveness analysis

— Code of Federal Regulations

— certificate of need

— computed tomography, computerized

tomograph y

— Department of Health, Education, and

Welfare

— Department of Health and Human

Services (formerly DHEW)

– Division of Compliance (BRH)

– Division of Electronic Products (BRH)

— Department of Defense

— Designated Planning Agency

– Division of Quality Assurance (BRH)

— Division of Radiology (NIH)

— Division of Research and Resources

(NIH)

— dynamic spatial reconstructor

— Food and Drug Administration (PHS)

— Federal Register

— General Electric

— Health Care Financing Administration

(DHHS)

— head-equivalent computed tomography

— health maintenance organization

— Health Resources Administration

(PHS)

--- health systems agency

— Health Systems Plan

– Institute of Medicine (NAS)

— Medical Care Evaluation (studies)

— National Academy of Sciences

NCHCT — National Center for Health Care

Technology (OASH)

NCHS — National Center for Health Statistics

(OASH)

NCHSR — National Center for Health Services

Research (OASH)

NCI — National Cancer Institute (NIH)

NEMA — National Electrical Manufacturers

Association

NHLBI – National Heart, Lung, and Blood

Institute (NIH)

NIH —National Institutes of Health

NINCDS — National Institute of Neurological and

Communicative Disorders and Stroke

NMR — nuclear magnetic resonance

OASH — Office of the Assistant Secretary for

Health (DHHS)

OHPA — Office of Health Practice Assessment

(defunct)

OMAR — Office for Medical Applications of

Research (NIH)

PETT —positron emission transaxial

tomography

PHS – Public Health Service (DHHS)

PSRO — Professional Standards Review

Organization

RSNA — Radiological Society of North America

SCBT — Society for Computed Body

Tomography

SHPDA — State health planning and development

agency

SUNY — State University of New York

USC —United States Code

VA — Veterans Administration

Glossary of Terms

Cost-benefit analysis (CBA): An analytical] technique

that compares the costs of a project or technological application to the resultant benefits, with both

costs and benefits expressed by the same measure.

This measure is nearly always monetary.

Cost-effectiveness analysis (CEA): An analytical

technique that compares the costs of a project or

of alternative projects to the resultant benefits,

with cost and benefits effectiveness not expressed

by the same measure, Costs are usually expressed

in dollars but benefits effectiveness are (ordinarily

expressed in terms such as “ii\’es saved, ” “disability avoided, ” “quality adjusted life years saved

(QALY), ” or any other relevant objectives. Also,

when benefits/effectiveness are difficult to express in a common metric, they may be presented

as an “array. ”

Device (medical): Any physical items, excluding

drugs, used in medical care (including instruments, apparatus, machines, implants, and reagents).

Diffusion: The process by which a technology enters

and becomes part of the health care system. It has

two phases: adoption and use of the technology.

Most studies of diffusion have only examined the

adoption phase.
Effectiveness: Same as Efficacy (see below) except

that it refers to”. . . average conditions of use.”

Efficacy: The probability of benefit to individuals in

a defined population from a medical technology

applied for a given medical problem under ideal

conditions of use.

Medical technology: The drugs, devices, and medical

and surgical procedures used in medical care, and

the organizational and support systems within

which such care is provided.

Procedure: A medical technology involving any

combination of drugs, devices, and provider

skills and abilities. Appendectomy, for example,

may involve at least drugs (for anesthesia), monitoring devices, surgical devices, and physicians’,

nurses’, and support staffs’ skilled actions.

Risk: A measure of the probability of an adverse or

untoward outcome’s occurring and the severity of

the resultant harm to health of individuals in a defined population associated with use of a medical

technology applied for a given medical problem

under specified conditions of use.

Safety: A judgment of the acceptability of risk (see

above) in a specified situation.
Appendix 1. —Acknowledgments

In addition to reviews by the members of the Health Program Advisory Committee, OTA received reviews

of drafts or parts of drafts of this report from the following people and groups. These reviewers do not necessarily approve, “disapprove, or endorse the report.

Leonard J. Bisaccia, M.D.

Director

Radiology Service

Veterans Administration

Bruce G. Breamer

Government Affairs Manager

Technicare

Cleveland, Ohio

Russell A. Brown, M.D.

General Electric Co.

Milwaukee, Wis.

David O. Davis, M.D.

Professor and Chairman

Department of Radiology

The George Washington University Medical Center

washington, DC.

Michael Eliastam, hf. D., M.P.P.

Special Assistant to the Director

National Center for Health Care Technology

Department of Health and Human Services

Henry A. Foley, Ph.D.

Administrator

Health Resources Administration

Department of Health and Human Services

Jean R. Herdt, M.D.

Deputy Chief

Diagnostic Radiology Department

The Clinical Center 

National Institutes of Health

Gordon C. Johnson, M.D., and staff

Bureau of Radiological Health

Food and Drug Administration

Otha W. Linton

Director of Governmental Relations

The American College of Radiology

Washington, D.C.

Joseph A. Marasco, Jr., M.D.

Director, Diagnostic Radiology

St. Francis General Hospital

Pittsburgh, Pa.

Barbara P. McCool, Ph.D.

Acting Director

National Center for Health Services Research

Department of Health and Human Services

Robert G. McCune

Division Staff Manager

Diagnostic Imaging and Therapy Systems Division

National Electrical Manufacturers Association

Washington, D.C.

David A. Pistenma, M.D.

Chief, Radiotherapy Development Branch

National Cancer Institute

National Institutes of Health

Dennis F. Siebert

Direct or

Office of Professional Standards Review

Organizations

Health Standards and Quality Bureau

Health Care Financing Administration

Department of Health and Human Services

Thomas H. Shawker, M.D.

Chief, Ultrasound Section

Diagnostic Radiology Department

The Clinical Center

National Institutes of Health

Michael Walker, M.D.

Director

Stroke and Trauma Program

National Institute of Neurological and

Communicative Disorders and Stroke

National Institutes of Health

Daniel Zwick

American Health Planning Association

Washington, D.C.

101
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