In order to determine the relative value of a physician’s medical services, the term RVU was created – the Relative Value Unit.  It is deemed the unit of measure needed to determine the level of reimbursement allotted for services rendered.

How is value placed on such an intangible commodity?  The resources used to provide these services are the key value component; the physician’s work itself, the expenses incurred by the practice of said physician, and the cost of professional liability insurance.  Once these three resources have been evaluated and given a basic RVU, the final total is then adjusted based on the geographical cost of living.  In essence, this model is followed to ensure the accurate portrayal of relative cost to the physician.

In regards to a physicians’ RVU based on work, consider the time invested on the procedure at question.  Obviously a physician performing a routine cataract removal will spend more time and also require more skill then than a physician performing a routine eye exam.  Although the minutes between the two functions may not have an immense measureable difference, the skill and effort put into effect during the surgical operation carries much more weight when determining RVU.

You must also take into account the relative cost surrounding the physician.  Whether it is measuring the supplies in his own practice, the clinical staff, and equipment; or the cost of a procedure performed in a separate facility or hospital with an entirely new set of outlying cost, all of these factors must be weighed and associated value accordingly.

Both the physician’s time and the facility time investment are accounted for differently during a longer-term care operation, such as cancer treatment.  This type of patient care service is tracked under a Global Fee system.  This global system takes into account the entire process, set from day 1 to say 90.  This would include all treatments, office visits, surgeries, and medical services incurred what is deemed to be normal recovery or procedural time incurred by the specific condition at hand.

The simplest step in this process is determining the value of the liability insurance incurred by the physician himself.  This may also need to include that outsourced by the facility where surgical or clinical functions are performed, should said environments not be under the proprietorship of the physician himself.

This model has been in place for over a decade, and standards have been created and enforced by the Centers for Medicare and Medicaid (CMS).  These Resource Based Professional Liability Relative Value Units are also accepted by the majority of privately held insurance companies.

In order to ensure that accurate and effective RVU’s are given to the various perfunctory services, the United States Congress requires CMS to review these values every five years.  Developing new RVU’s to keep up with breakthrough medical and technological findings is also the responsibility of the Centers for Medicare and Medicaid.  In order to review existing RVU value, as well as implement new ones, CMS affects surveys in order to assess the time, services, and standard of care used in specific treatments.

There are several differing opinions regarding the validity of the RVU standard.  It can be argued whether putting emphasis on quantity instead of quality is the effect of the RVU standard, thus jeopardizing patient care.


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