This may seem like a trick question: which is more valuable, resuscitating a newborn infant, or doing a hair transplant?
While I realize I have a pediatrician bias (though I am also follicularly challenged, so my biases probably balance), I think most people would place greater value on the newborn resuscitation. But if you ask the Center for Medicare and Medicaid Services and the American Medical Association, they would pick the hair transplant. In fact, hair transplant is assigned between 31% and 84% more value (depending on the number of plugs) than resuscitating a newborn. This is according to the Relative Value Unit (RVU) system, used in American medicine since the early 1990s. (Note that I am using the conventional method of calculating percent differences, not the alternative math used by the White House as described by RFK Jr.)
The word “value” has been thrown around gratuitously in healthcare for decades. To paraphrase the great philosopher Iñigo Montoya, people keep using that word, but I don’t think it means what they think it means. As I have written about before, traditionally value in healthcare has been defined as the ratio of quality to cost. People want good care – care that is effective and safe and patient-centered and timely and equitable – but they don’t want to be bankrupted by it. This makes sense, and it captures the idea of value as “the regard that something is held to deserve; the importance, worth, or usefulness of something” (Oxford English Dictionary).
Too often, though, in healthcare the denominator – cost – takes priority over quality, and indeed the term value becomes synonymous with money. There are many examples of this, but one of the most grating to physicians is the RVU. And the emphasis on RVUs can skew incentives away from true value for patients and society.
Before the 1990s, Medicare paid physicians based on “usual, customary, and reasonable” charges, which was highly variable and admittedly somewhat arbitrary. The Resource Based Relative Value Scale (RBRVS) payment system was created by legislation in 1989, and began implementation in 1992. (Since then, it has been widely adopted by private payers as well.) Under this system, physician payments would be based on a system of RVUs. The primary component, the work RVU, or wRVU, would be a measure of the work performed by a provider in delivering the service and relates to time, effort, and expertise required to perform the service. Each of thousands of procedure codes is assigned a wRVU weight. These weights are then multiplied by a factor to yield a payment amount. (There is also a component for the practice expense like supplies and office overhead, and malpractice.) In theory, this standardizes payment so that physicians doing similar work get similar payment, and greater effort is rewarded commensurately.
How are these wRVU weights determined? Initially they were assigned by a survey of physicians who were asked to rate the work of various procedures according to “time, mental effort and judgment, technical skill and physical effort, and psychological stress.” The original study, conducted by Harvard researchers and published in NEJM, concluded that “these ratings are highly reproducible, consistent, and therefore probably valid.” (Emphasis mine.) Subsequently, the American Medical Association created the Relative Value System Update Committee (RUC) which advises CMS on updates to the wRVU weights. The RUC consists of approximately 30 physicians, mostly specialists, the majority appointed by the relevant specialty society.
While the RBRVS has arguably brought standardization and rationalization to physician payment, there are important criticisms. One is that it tends to overvalue procedural over cognitive effort. A newborn circumcision, for example, has a wRVU of 2.47, compared with an initial office visit for a newborn with 1.5 wRVU. In my experience, each takes approximately the same amount of time (and that is only if the initial office visit is for a newborn with an uncomplicated history and the parents/caregiver have reasonably adequate resources). This gap has probably widened as technology has made many procedures faster and easier. At the same time, technology has increased the work required for many non-procedural tasks. Care coordination can require significant time reviewing the far greater volume of information contained in the electronic health record. And health counseling is complicated by the explosion of information on the Internet and from AI, of highly variable quality and validity, that primary care physicians must address.
And while the term “value” features prominently (note how many V’s are in these acronyms), do wRVUs really measure value? Do they measure what is important to patients and their health outcomes? Is performing a hair transplant or an eyelid lift (wRVU 4.5-6.7) really more than twice as valuable as an hour of chronic care coordination (wRVU 1.81)?
This is not only a moral or theoretical concern. Physician compensation relates directly to wRVUs. This is part of why specialties like plastic surgery (avg. annual salary $544,000) and gastroenterology ($520,000) pay so much more than public health ($269,000) and pediatrics (coming in at the bottom at $265,000). Is it any wonder why we are predicting a shortage of primary care and preventive medicine physicians?
If we really want to deliver value, we need to rethink how we define and measure it.
Starting With Curious 