Australia's MRI "scandal" diverts attention from government restrictions on medical diagnosis

By Laura Mitchell
29 January 2000

Up to 250 Australian radiologists—one quarter of the profession—face possible criminal prosecution or civil cases as part of a so-called "scan scam" involving allegations of insider knowledge over the purchase of Magnetic Resonance Imaging (MRI) machines.

Accusations of rorting were given wide media coverage in December but the issue goes back to May 1998. At that time the federal Liberal government introduced Medicare rebates—a form of government subsidy—for MRI scanning equipment purchased previously. The Labor opposition, which was instrumental in whipping up the “scandal,” alleged some radiologists had inside knowledge of the impending cut-off date—hence the large number of MRI orders and subsequent rebate claims.

As far as the media is concerned the entire issue begins and ends with the alleged greed of doctors and their attempts to “rort the system”. Of the 52 applications for Medicare funding, 19 have been referred to the Director of Public Prosecutions (DPP) while eight more face civil action. The Health Insurance Commission is currently preparing briefs for the DPP, with Labor opposition health spokeswoman Jenny Macklin and opposition leader Kim Beazley demanding the speedy prosecution of cases.

But what is the real significance of the MRI scandal? Are we really to believe that a high proportion of radiologists are simply in the profession for the fast buck and ordered new MRI machines with criminal intent? Or are there other questions involved?

MRI is a powerful medical diagnostic tool, which unlike x-rays is capable of imaging soft tissue and organs. According to the Encyclopedia Britannica: "MRI relies on the response of magnetic fields to short bursts of radio-frequency waves to produce computer images that provide structural and biochemical information about tissue. The process uses radio waves and is thus much safer than imaging using X rays or gamma rays. This totally noninvasive but very expensive procedure is particularly useful in detecting cerebral edema, abnormalities of the spine and early stage cancer. In examining the brain, spinal cord, urinary bladder, pelvic organs, and cancerous bone, MRI is the superior imaging technique."

MRI equipment has been around for more than two decades, but over the last five to 10 years has been increasingly in demand. A doctor at a Sydney hospital described the images produced by MRI machines as “unbelievably lifelike, like a photograph rather than a computer image. It's like being able to dissect the brain”. But the scanning equipment is expensive. MRI machines cost about $3 million, plus additional annual running costs of $100,000.

Prior to 1998 the federal government provided only 18 MRI machines nationally. Located at major teaching hospitals each machine had its funding capped at about $1 million—equivalent to 3,500 scans. Scans over and above the quota had to be funded by hospitals themselves, adding pressure to the already cash-starved, and dysfunctional public health system. Waiting lists for public patients were as long as three months. The only other access to MRI technology was through the private system where a scan could be done within a week but at a cost of up to $700, which was prohibitive for many.

Federal Health Minister Michael Wooldridge and the Royal Australian and New Zealand College of Radiologists claim the introduction of Medicare rebates for MRI scans is aimed at providing “fairer access”. Yet the opposite is the case. The federal government is not extending the provision of MRIs or funding to the public system. Instead it is allowing a limited number of privately-owned MRI machines to operate with government subsidy. With Medicare rebates reducing the cost for private scans, the result has been increased business for private practices. But only patients able to pay the balance of the fee (up to $400) have access. At the same time the federal government has effectively placed a cap on the further growth of this technology, funding only those machines purchased by radiologists prior to May 1998.

The important issue is not whether radiologists submitted invalid claims for MRI machines. Doubtless over the coming months media attention will focus on this legal aspect. But the real scandal is the step-by-step privatisation of MRI scanning and the entire health system—an agenda shared by Liberal and Labor alike. At present the situation with MRIs is the following: huge waiting lists (still) in the public system, but rapid treatment in private practices, if you can pay up-front. In their tirade against radiologists, the Labor opposition has not once alluded to this underlying crisis over the public provision of MRI technology.

Instead, by focusing on allegations of a budget blowout for MRIs, Labor has assisted in creating a climate conducive to further cutbacks in public health.

The latest casualties are pregnant women, with the government announcing large cuts to Medicare rebates for ultrasounds. The decision will effectively strip poorer women of the right to ultrasound access during the first 17 weeks of pregnancy. So inured are government and health officials to the subordination of health to the dollar, they have condemned women for wanting “happy snaps” of their unborn infants.

And the response of the Australian Labor Party? Labor senator Rosemary Crowley told the Australian Financial Review there was a problem of overuse: “The need for this screening should not be confused with the growing tendency for some women to have multiple ultrasound scans and to want photos and videos of their baby.”

According to the Australian Association of Obstetric and Gynaecological Ultrasonologists the cuts in Medicare rebates for early-term pregnancies will have catastrophic implications for the timely detection of chromosome abnormalities, particularly Down's Syndrome.

The "scan scam" is symptomatic of a far deeper crisis. Astonishing developments in medical science and technology have revolutionised the treatment of illness, providing for early detection and more effective treatment for many conditions. Millions of people expect, as a fundamental right, access to these techniques. Yet under the profit system the high costs associated with advanced diagnostic and surgical care see ever more strident attempts by capitalist governments the world over to limit public access.