The snake eats his own tail

And other tales of the new austerity:

General Electric Co.’s GE -0.27% $18 billion health-care business is being forced to navigate a slowdown in medical imaging—one that in some ways has been aggravated by GE itself.

GE put its 85,000 U.S. white-collar workers on a high-deductible health plan in an effort to stem the growth of its U.S. health bills, which are now running $2.5 billion a year. In the first two years after the plan went into effect, use of advanced imaging including MRIs and CT scans has dropped by as much as a quarter, as covered employees’ overall use of health services fell, according to the company.

That is good news for GE proper, which last year expanded the plan to include its 45,000 hourly and union workers. But it’s bad news for GE’s health-care business, which is one of the world’s biggest makers of MRI machines and CT scanners.

Proposals to move employees to health plans that make employees pay more out of pocket were hotly debated within GE, people familiar with the matter said. Many GE divisions were eager to control their medical costs, but there were concerns about the impact on sales.

GE isn’t alone. A number of other giant employers, including J.P. Morgan Chase JPM -0.91% & Co. and Chrysler Group LLC, are adopting high-deductible health plans, pushing down the use of imaging by privately insured Americans.

Meanwhile, Medicare has been cutting reimbursement rates for medical imaging services. New data out this week show imaging use among Medicare beneficiaries fell 1% in 2011, extending a two-year slide, according to Medical Imaging & Technology Alliance, an industry group.