Medscape is a medical news service for physicians. It provides up-to-date information and opinions from the worlds of medical science and the business of medicine, online, every day.
Recently, Medscape published the results of a survey they conducted called the 2024 Physicians and RVU’s Report. I’ve written about RVU’s, Relative Value Units, and their role in the method of physician payment. RVU’s have been in use since the 1990’s when physicians were sold a bill of goods. RVU’s were heralded as the way to fairness and higher incomes for physicians. But as this survey attests, those premises have not proven to be true, and physicians know it.
For review, a Relative Value Unit is a number assigned to every procedure physicians perform. The RVU indicates the cognitive difficultly, complexity, and time needed for physicians to perform the task. The RVU of a procedure, such as an office visit, is multiplied by a monetary “conversion factor” to determine how much a physician is paid for said procedure. RVU’s are determined by a committee of physicians, healthcare economists, and healthcare administrators, while the conversion factor is set by Congress. So, a lot of non-physicians are deciding how much physicians are paid.
This Medscape survey was intended to give physicians a sense of what their colleagues and peers think about the payment system they have no choice but to accept. Two major opinions surfaced immediately from the survey. They are the following:
60% of survey participants were unhappy with how RVU’s affected them financially.
70% of participants said RVU’s were poor measures of productivity.
Although the Center for Medicare Services (CMS) and the U.S. Congress deny it, RVU’s and the conversion factor are clearly price controls designed to save the government money by paying physicians ridiculously low amounts for services only physicians are trained and competent to provide. It is a disgrace! A New York anesthesiologist is quoted as saying “I’m already mad that the medical field is controlled by health insurers and what they pay and authorize.” He’s not alone! “Forty-two percent (it should be higher) of physicians said RVU’s directly affected their salaries to some degree.” The truth is, 100% of non-salaried, independent physicians are paid based on RVU’s which directly affect their compensation, most often negatively.
60% of survey participants said the RVU method of compensation was unfair.
50% of participants said an alternative method would be more effective.
77% suggested including qualitative data.
The Relative Value Unit (RVU) method of physician compensation is “fair” only in that RVU’s are the same for every physician within the same specialty, whether you’re a Nobel Laureate or an inner city clinic worker. Otherwise fairness is a joke. The conversion factor is the short-hair grab physicians endure annually. It’s the “money” part of the reimbursement equation and is Draconian at best. Every year since it began, Congress has lowered the conversion factor by a few pennies. So, over the past 30-plus years, the cumulative effect has been devastating. It has lowered payments by 90%-95% to the point of being inadequate to run a business. For example, if the grocery store charged $5.00 for milk and was only paid $.50 by the customer, they wouldn’t be in business very long, especially if same size milk cost the grocer $3.00.
Say Physicians determine a fair fee for an office visit that covers overhead expenses is $150.00. But RVU’s and the conversion factor calculate his reimbursement at $27.55. That’s all Medicare will pay. Unless the patient has a Medicare supplement policy, the physician eats the rest of the cost. He can’t bill for the balance of what’s owed.
So, I don’t understand why surveys like this don’t reveal 100% physician dissatisfaction with the system. It’s hard to conceive of 30% of physicians approving of this system because it is designed to limit their income. It certainly did mine! Physicians’ representatives have been totally ineffective at standing up for their constituents against the government. After thirty-plus years in use, RVU’s are here to stay, but that doesn’t mean you have to like it or accept it.
Reference: Vargas B. Physicians Lament Over Reliance on Relative Value Units: Survey. Medscape Medical News 2024 August 22. https://www.medscape.com/viewarticle/physicians-lament-over-reliance-on-relative-value-units.
