Adding Value to Relative-Value Units

Authors:
  • SSSteven A. Schroeder
    Steven A. Schroeder
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Abstract
Relative-value units (RVUs) were developed in 1988 as a method of accounting for physicians' work effort and hospital or clinic expenses. Because RVUs provided a uniform, formulaic metric for myriad clinical services, they quickly became the prevailing method for setting fee-for-service payments for Medicare and private insurance. However, the dominance of the fee-for-service model has created strong structural impediments to physicians' participation in value-focused health care.1 The success of new models of care will require not only changes in the way that health systems are organized and paid but also vigorous engagement by generalists and specialists, yet RVU formulas for clinician compensation have not evolved to meet these needs. Many important physician activities — including managing systems of care, managing the health of populations, delivering individual patient care in new ways, and considering behavioral influences on health — are not measurable in the current RVU system. This limitation has led policymakers and researchers to experiment with alternative payment and incentive systems for physicians. Nonetheless, a reconfigured RVU system has many advantages and could evolve into the method best suited to accounting for physicians' services in a variety of delivery and payment contexts.

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