RBRVS

In the 1980s, William Hsiao, a Harvard researcher, put together a committee of doctors, statisticians, economists, and other specialists to figure out how much doctors should be paid for what they do. Prior to that, there was little standardization; physicians charged whatever they wanted and surprisingly, insurance companies would often pay that sum. However, the Resource-Based Relative Value Scale was created so that there would be some uniformity to Medicare reimbursement. The committee looked at every possible procedure that a physician could do, from a heart transplant to a psychiatric evaluation to delivering a baby, and determined a price that a provider should charge for that service. This price is based on physician work (52%), practice expense (44%), and malpractice expense (4%). Physician work includes the time required to perform the service, the technical skill and physical effort, the mental effort and judgment, and stress.

One problem with RBRVS is that in an era when medicine is driven by evidence based outcomes, outcomes don't play a role in RBRVS. Although outcomes are starting to become important (Medicare no longer reimburses for hospital catheter-associated infections, decubitus ulcers, etc.), RBRVS is the change that needs to happen. The problem is there's no easy way to incorporate outcomes. Only a few interventions have shown definite mortality benefit in large-scale randomized trials, but perhaps these interventions should have an additional multiplier by the RBRVS scale. The scale is relative such that an increased value in a procedure leads to decreased value in the other procedures. I realize this change would be unfair to certain specialties (for example, pathologists don't make patient interventions that have a mortality benefit), but I also think it'll align what is best for a patient with what is best for a doctor's pocketbook. It is sad that economic incentives need to be in place to improve health outcomes, but perhaps that is just what we need.