Relative Value Units (RVUs) were created in the 1980s by Medicare as a way to assess payments to each service Medicare covers.
As you might guess, with so much money at stake it was immediately gamed.
Proceduralists seized control of the process early and began the decades-long process of shifting resources from cognitive services to procedural ones. The shift has gotten worse each year since.
As a result, RBVs don’t reflect value, they reflect how much influence proceduralists maintain in the process at the time of the most recent calculation.
Yet, calculations for clinician compensation in most organizations rely almost exclusively on RBVs.
They’re easy to understand, easy to calculate, easy to administer.
But don’t fool yourself—they don’t represent value.
And compensation based on one will not generate the other.
One day soon, each patient will have to pay for their healthcare under a budget capped by total number of dollars.
It’s already happening in Medicare Advantage and the spread of the concept to commercial insurance is accelerating rapidly.
When each patient’s dollars are fully capped, RBV-based compensation will pass away.
Unprepared organizations, organizations who have no experience in partnering with their clinicians to share financial risk, who believe that RVUs represent actual “value” will be under sudden, intense financial pressure.
Others, who have good relationships with their clinicians, who have recognized that true value in health care flows from the trusted relationship of patient and clinician will have an enormous competitive advantage.
So you know the change is coming. You know what you have to do to get ahead of the curve.
Do you stay back with the traditional status quo?
Or do anticipate the future—and own it?