Tag: Steven Schroeder

The absolute case for relative value units

November 21st, 2013 by


Fee-for-service methodologies, especially relative-value units (RVUs), keep creeping back into alternative payment models like capitation.  Maybe we should take the hint and adapt RVUs to the new environment rather than throwing them out the window. That’s the essential message of a persuasive Perspective by Erick Stecker and Steven Schroeder in the latest New England Journal of Medicine.

Capitation works well at the level of an overall health system, but it’s tricker to apply at the level of small physician groups due to challenges in risk adjustment in small populations and concerns about conflicts of interest. That means physicians usually get paid on some kind of RVU basis. Typical RVU methodologies only account for physician time, skill and intensity. But RVUs could be improved by using comparative effectiveness research to give more weight to activities that are likely to improve patient outcomes. The authors provide an example of stenting for chronic stable angina, which currently has a Medicare RVU weighting of 11.2. They propose boosting it by 25% for those with “AUC score of 7,8, or 9 and conducted in cath labs with an approved AUC auditing process” while lowering the RVU by 50 to 75 percent for those for whom stenting is less likely to be helpful.

RVU-based systems are well entrenched because they are already understood and used by financial managers, are included in software used by health systems, and are understood by physicians. When RVUs are distorted they lead to rapid and profound changes in physician behavior. The authors cite the growth of doctor-owned specialty surgical centers and imaging centers as examples. Why not use value-based RVUs to achieve rapid increases in behaviors that are desirable from a value perspective?

RVUs are tweaked frequently so there’s no need for a high risk, big bang approach. RVUs can be changed as better evidence becomes available and to adjust to changes in physician behavior.

It sounds like a good plan to me.

photo credit: Nicholas Eckhart via photopin cc

By David E. Williams of the Health Business Group.