Stop using RVUs | LOF # 130

Let's try to set the stage a little bit because I, I always try to be mindful about our audience, not all being physicians.

And so maybe, um, We think about 50% of our audience is actually industry or industry-related folks.

And so I think it's important for them to understand sometimes when we're talking about this, what that means.

So RVU, for everybody out there, means Relative Value Unit.

Remember, Americans love their acronyms.

And RVU is essentially the currency of the U.S. healthcare system, if you may.

It's what they use to measure physician work.

And at the time, I want to say, I'm not a historian, but I believe this was back in the Perot era, that the question was, how much effort, skill, time, overhead does it take to perform a medical service in comparison to another, right? So you would think that...

I don't know, removing a peritoneal dialysis catheter may not be as involved as doing a quadruple heart bypass.

I mean, I think that we all would agree that that is so.

And so I think in a way we're coming at this already being hypercritical, but I also want to open the conversation to the fact that there needs to be some degree of standardization, right? Because the way it was back in the golden era, certainly not what we had to deal with, but the way it was is doctors would essentially get paid on what they historically charged.

And like everything that's good, there's always a bad apple that decides to add some ridiculous amount of money to what they feel is what they deserve for payment.

And so the ideas at the time were there needed to be some degree of standardization.

that there should be evaluation of cognitive services, if you may, reduce the arbitrary pricing and try to create for CMS, Centers of Medicare and Medicaid Services, some degree of methodology that will allow everybody to get paid the same

way or as close to the same way as possible.

Now, that RVU essentially takes three elements into the way that it's calculated.

So the work, which means your effort, meaning how much time, how much technical or mental decision-making capacity you have, the practice expense.

So the staff, the supplies, the utilities.

And then even, I believe it also includes some more practice variations because obviously there's... you know, like OB-GYN is a little bit worse.

Neurosurgery has more malpractice risk than anybody.

And so the formula ultimately is the total RBUs by a conversion factor equates to the Medicare payment.

And so the current Medicare number, I want to say is somewhere around 33 bucks.

And so if they believe that...

Yeah, a conversion factor.

So let's break it down.