Excess Capacity Model

The excess capacity model is what happens when a facility sells time on equipment it already owns and already staffs. An MRI machine costs the same to own whether it runs six scans a day or sixteen. Once the lease, the technologist and the radiologist are paid for, the next scan costs the facility very little, so it can be sold for very little and still make money.

Where it hits the ground: this is why a cash MRI can be $285 when the hospital down the road bills $2,847 for the same study. The hospital is pricing to cover an entire campus. The independent centre is pricing the unused hour on a machine that is sitting idle. Neither one is doing anything underhand; they are answering different questions. The scan itself is the same scan, on the same kind of machine, read by a board-certified radiologist. The difference is what else the price is being asked to pay for.

The takeaway: when a cash price looks impossibly low next to your plan's negotiated rate, ask whether the facility is selling spare capacity. If it is, the low number is real and repeatable, not a loss leader that disappears when you book.