My Biggest Problems with the RVU System

Pediatric Blog

From the title of this blog post alone, I think you know how I feel about RVUs. However, if you want to hear my reasoning, read on.

One of my biggest problems is that the RVU system is decided by a secret society composed of specialists. Nobody seems to have a problem that a “secret society” decides how much work and how much cost should be allocated to a medical service.

Medical procedures are very dangerous and have a lot of risk, but so is trying to provide healthcare to a complicated 2-year old that can’t tell you how she is feeling, where it hurts, or if the medication is helping. Yet, RVUs don’t take into consideration that dealing with infants and children have a huge risk as well.

Second, the RVU system is “RELATIVE.” As in happiness is “relative", yet we somehow have bought into the notion that we are being fair with this made up “point” system.

RVUs are meaningless unless they are attached to a dollar amount. In other words, you can’t take RVUs to the bank. At the end of the day, a private, independent practice, in order to survive has to have more money coming in to the practice than goes out, regardless of how well or how little RVUs they generate.

RVUs don’t reflect profitability. You can accumulate thousands of RVUs but it doesn’t mean you are making money.

I also don’t like the fact that RVUs change from year to year. Up until last year, vaccine admins didn’t have RVUs attach to them, yet managing and administering vaccines are very costly and can easily eat up a practice’s margins.

The only thing that makes a private doctor money is seeing patients - not accumulating RVUs. If you don’t treat patients, you are not accumulating RVUs, thus, which one do you think is more important?

Let’s say you are opening a private practice and you are going to ask a bank for a loan. How many RVUs do you need to accumulate in order to pay for the expenses and have money left over to live on and pay the bank back? 5000 or 12,000 or 9,000 RVUs?

Who cares? The bank that is loaning you the money doesn’t care about the RVU. They want to know how you will pay back the money. And like I said, what pays the bills are the patients you see. Not the RVUs you accumulate.

Speaking of cost, RVUs do a poor job of measuring what things really cost. Let’s say our practice is an area where rent is more expensive or that I like to buy Apple products instead of Dell or that I prefer to have more RNs than Medical assistants.

How does the RVU system account for that? Oh, yeah, there is a index that that somebody came up with that we are supposed to multiply our RVUs so we can adjust for regions. Isn’t that cute.

As if cost for providing care is standardized among regions.

Supply and demand determine rent cost, not regions. I could go a couple of miles down the road and pay a different amount of rent than if I went down 5 miles down the road.

My point is that at the end of day, you have to have enough money, regardless of RVUs.

I also like to point out that even if you do decide to go with an RVU model, you still have to base it on a dollar figure. RVUs have to translate into dollars. So why not just stick with dollars?

Here is the bottom line for me. In my experience, I see docs lean on their RVUs without regard to “profits or cost.” Not in all instances of course, but in many cases, it can give doctors a false sense of productivity. A false assurance they are doing well in their practice.

I also think this mentality removes doctors from thinking in terms of cost and revenue. Since many doctors are uncomfortable talking about the money side of the business, the RVU is a perfect compromise for them. But it can be deadly.

Let me clarify… I’m not suggesting me dismiss the RVU concept entirely. I think it is important to understand how they work because this is how insurance companies decide how we get paid. What I disagree with is using it as a measure of productivity for one’s practice.

(This blog was originally posted on Pediatric Inc)

Brandon Betancourt is a business director for a pediatric practice in Chicago. He is a speaker, consultant and blogger. You can follow him on Twitter @PediatricInc or visit his blog at PediatricInc.com