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 Table of Contents  
Year : 2016  |  Volume : 2  |  Issue : 1  |  Page : 52-56

Relative value unit transformation: Our new reality of worth

Department of Surgery, Wexner Medical Center, The Ohio State University, Columbus, OH, USA

Date of Submission29-Dec-2015
Date of Acceptance22-Jan-2016
Date of Web Publication2-Jun-2016

Correspondence Address:
Michelle C Nguyen
MD, Department of Surgery, Wexner Medical Center, The Ohio State University, 395 W. 12th Avenue, Columbus, OH 43210,
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Source of Support: None, Conflict of Interest: None

DOI: 10.4103/2455-5568.183333

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The mission of any academic healthcare institution is to strive in all three fronts of clinical care, research, and education. Despite the importance of teaching, research, and other related activities that contribute to the academic advancement of physicians and institutions, there currently is no standardized metric to quantitatively measure each physician's productivity and value in these areas. As the landscape for hospital reimbursements continue to change to include and expect quality domains and outcomes, so must the algorithm for determining the missing pieces of value in the traditional resource-based relative value scale. The authors review the traditional measurement of clinical productivity, namely, the work relative value unit (wRVU) and propose the development and implementation of additions to this existing wRVU to include quality RVU as well as academic RVU. The acceptance and implementation of this transformation will provide physicians with a more comprehensive portfolio for promotional opportunities and institutions with comparative data on the overall effectiveness of their tripartite academic mission.
The following core competencies are addressed in this article: Practice-based Learning and Improvement, Systems-based Practice.

Keywords: Academic medicine, administration, productivity, relative value unit, value-based care

How to cite this article:
Nguyen MC, Moffatt-Bruce SD. Relative value unit transformation: Our new reality of worth. Int J Acad Med 2016;2:52-6

How to cite this URL:
Nguyen MC, Moffatt-Bruce SD. Relative value unit transformation: Our new reality of worth. Int J Acad Med [serial online] 2016 [cited 2023 Jan 27];2:52-6. Available from: https://www.ijam-web.org/text.asp?2016/2/1/52/183333

  Introduction Top

Academic medicine strives to excel and continuously improve in the three domains of clinical care, research, and education. The measures of clinical productivity, namely the resource-based relative value scale (RBRVS) was developed and implemented to allocate appropriate resources and reward such clinical productivity. However, while healthcare systems undergo major clinical care transformations, the traditional relative value unit (RVU) system remains unchanged and unlikely to meet the ever-changing productivity challenges of today's medical front. With current shifts in reimbursement mechanisms now taking into account quality, patient safety, and efficiency, consideration should be made to incorporate such factors into the formula for measuring not only clinical productivity but also the level of truly value-based care provided. In addition, the RVU system needs to be expanded to factor in academic productivity including research and educational efforts as well as continuous improvement activities that assure strong clinical outcomes. These inclusions will truly align measurements of productivity within the three-tiered goals of the traditional academic medicine mission.

  Work Relative Value Unit Top

The RBRVS was originally developed by Medicare to guide reimbursements expanded as a useful administrative tool to compare clinical productivity and expense data.[1] Values are assigned by Centers for Medicare and Medicaid Services (CMS) to each Current Procedural Terminology/Healthcare Common Procedure Coding System (CPT/HCPCS) code and represent the reimbursement for providing a service. The RBRVS is made up of three components: Physician work (52%), practice expense (44%), and professional liability insurance (4%), and Medicare payments are composed of these values multiplied by factors of conversion and geographical adjustment. The physician work RVU (wRVU) is a constant value across specialties and geographic locations, providing a good standard for the value of work performed. wRVUs are often used in provider compensation models where the intent is to pay the provider based on the amount of work performed, blind to the payer mix, or amount of revenue generated. Compensation is derived from total wRVUs multiplied by a dollar conversion factor. The results of the Harvard American Medical Association study, published in 1988, laid the groundwork for how the wRVUs are determined. About 6841 physicians were surveyed in 33 specialties across the Nation. At that time, 460 CPT codes made up more than 90% of the physician usage based on subjective estimation. Physicians subjectively ranked their work input for a particular service relative to a reference service on a ratio scale, which was then cross-linked on a special panel to compose all relative values on one common global scale. The results were found to be in high agreement in service rankings for physicians within and across specialties and suggested that the work was highly reliable and valid. Since then, the multidimensional definition of work, which includes the variables: Time, mental effort and judgment, technical skill and physical effort, and psychological stress have been used to calculate today's wRVU [Figure 1].[2],[3] wRVUs are edited and published every year by the CMS. The top ten highest wRVUs relative to HCPCS codes in 2015 are listed in [Table 1].[4] The total activity or change in productivity of an institution, department, or individual can be measured and analyzed using these wRVUs.[1],[5] Currently, the formula for calculating RVUs does not factor in physician quality performance measures or the continuous improvement work that is required to assure the strong outcomes.
Figure 1: Components of the resource-based relative value scale

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Table 1: Top 10 work relative value units by Healthcare Common Procedure Coding System in 2015

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  Value-Based Performance: Shift In Hospital Reimbursements Top

The Patient Protection and Affordable Care Act established in 2010 allowed CMS to establish guidelines aimed at improving the quality of care and reduce the rate of growth in health care costs.[6] Currently, three programs exist to reward hospitals for delivering services of higher quality while penalizing those who do not meet performance benchmarks: The hospital readmission program (HRP), value-based performance (VBP), and the hospital acquired conditions (HAC) program. Domains of the VBP include clinical process, patient experience measured by HCAHPS, outcome, and efficiency, which in itself have undergone changes in the amount of weight placed on each domain.[7] The HAC program is based on hospital's performance on four risk-adjusted quality measures Patient Safety Indicators (PSIs), central-line associated bloodstream infections (CLABSIs), catheter-associated urinary tract infection (CAUTI), and surgical site infections (SSI).[7],[8],[9],[10] By 2018, it is predicted that up to 90% of Medicare and Medicaid payments will be linked to these quality data. The American College of Surgeons National Surgical Quality Improvement Program (NSQIP) and the University Health System Consortium (UHC), and Agency for Healthcare Research and Quality (AHRQ) provide the benchmarked data for comparison between participating institutions of academic peers and allow us all to share best practices and compete for leadership in the Quality arena of clinical care.

This new reality of the volume to value transformation will affect academic hospital reimbursements and physician practice dramatically. Because academic physicians are in a position to accept more complex, more highly variable, and more costly cases than community hospitals, they have higher financial risk that is currently not being compensated by the wRVU system. The tension between assuring quality outcomes and physician productivity that have been put in place by VBP and other pay for performance programs have the potential to provide physicians with the incentive to “cherry pick” for healthier and less costly patients which will ultimately favorably influence their perceived outcomes. One way to offset this potential problem is to expand the traditional wRVU to include risk-adjusted measurements for quality RVUs (qRVUs) to coincide with the current quality performance measures that institutions and providers are being held accountable for and have to work very hard to attain and consistently sustain.

  Elements Of Quality Relative Value Unit Top

As CMS and payers continue to reform their hospital compensation models to favor value over volume, so must the compensation model be changed for individual physicians. A physician compensation model that takes into account quality indicators will help direct physician behavior and incentives. The proposed physician qRVUs would align with the current hospital reimbursement mechanism by financially rewarding physicians who have risk-adjusted low readmission rates (RRs), low perioperative complications, and higher patient satisfaction scores based on the HRP, HAC, and VBP programs, respectively. The qRVU would be expressed as a sum of the risk-adjusted RR, VBP score, and HAC score. The readmission score would be expressed as qRR = 1/RR. The VBP score would be expressed as qVBP = (% modifier * 1/clinical process of care domain score) + (% modifier * Patient Experience of Care domain score) + (% modifier * 1/outcome domain score) + (% modifier * efficiency domain score). The HAC score would be expressed as qHAC = (% modifier * 1/PSI 90 composite) + (% modifier * 1/CLABSI rate) + (% modifier * 1/CAUTI rate) + (% modifier * 1/SSI rate). The total qRVU would be derived from the equation qRVU = (% modifier * qRR) + (% modifier * qVBP) + (%modifier * qHAC) [Figure 2]. These generalized equations will need to be revised as the institutional performance measures change. There is currently no established compensation framework based on quality metrics; however, several types of models can be expanded upon based on institutional contracts that mimic the wRVU compensation model. The first is based on productivity, whereby the practice multiplies qRVU values that physicians generate by its own conversion factor to arrive at a compensation figure. The second approach is to reward each physician a salary plus a bonus tied to the number of qRVUs generated over a benchmark number.
Figure 2: Components of proposed quality relative value unit

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Comparative institutional benchmarked data are currently available through participation in NSQIP, UHC, and AHRQ databases. However, the proposed qRVU system would necessitate the development of risk-adjusted individual physician-validated data across all academic institutions, which is currently lacking, but a source of much public interest made evident by the recent ProPublica (501(c)(3), 2007) release of the surgeon scorecard report. Several industries are taking advantage of this type of data; however, care must be taken to ensure that data are clinically validated and reported accurately and has the buy-in of key stakeholders; the physicians. By taking ownership of the inevitable increase in quality data transparency, institutions and physicians can increase their hospital and service line margins by way of measuring quality productivity. This system will provide incentive for physicians to be compliant, progressive, and potentially exceed the quality standards by being in alignment with the health reform reimbursement models as they continue to evolve.

  Elements Of Academic Relative Value Unit Top

Likewise, as there are objective measures to describe success in clinical care, there should be objective measures to evaluate and reward contributions to academic production by way of tenure and promotion. This is especially crucial in a time when clinical workloads and pressures for academic productivity are increasing. Currently, no standardized metrics are available to assess resource and time allocation for certain academic activities or to gauge one activity relative to another. Mezrich and Nagy proposed a schema on a web-based system for measuring academic productivity in terms of academic RVUs (aRVUs). The concept and approach are based on the traditional wRVU to include educational, research, and administrative activities with their respective weights. Elements of the aRVU can include publication RVU (factoring in effort, academic value, author rank score, and impact factor), administrative RVU (effort, academic value, and role), teaching RVU (effort, academic value, and quality), and research RVU (effort, academic value, funding modifier, and PI status) [Figure 3].[11]
Figure 3: Components of proposed academic relative value unit

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Limitations still exist in determining the value and quality of each component for weight assignments and much research is needed before widespread dissemination can occur. Nevertheless, an aRVU system as a counterpoint to the wRVU and qRVU is much needed to measure academic productivity to facilitate standardized selections for tenure and promotion and to provide insights on efficient resource and time allocations for specific academic activities.

  Discussion Top

The addition of the value proposition to previous volume-based reimbursement models has led to a significant amount of pressures on institutions to continue to be productive while achieving high-quality outcomes. When the RBRVS was established, the equation accounted for and aligned with volume-based care. In today's advanced medical system, expectations and thresholds are raised to achieve higher quality performance measures, but the equation for compensation has not changed to align with these shifts in expectations. The current RBRVS is based on relative costs rather than on relative value to patients and physician compensation remains fixed on volume and not value. To fully align compensation with expectations, the current RBRVS should be redefined to include those measures that institutions are being held accountable for so to provide physicians with incentives to reach and exceed the national benchmark for quality. The difficulty remains in defining and quantitating the modifier or conversion factor in monetary terms in this context; however, this process should be facilitated based on the current institutional value-based purchasing guidelines. Setting goals, expectations, and rewarding institutions and physicians appropriately will benefit the payers, institution, physician, and most importantly, the patients.

Likewise, the financial environment associated with today's health care market increased competition for research grant support and greater accountability for educational guidelines, and standards have expanded the complexity of an individual achieving excellence within the three academic mission goals. Productivity measurements currently vary from institution to institution, and the process by which a successful young academic physician becomes faculty appointed, promoted, or tenured remains subjective based on specific career paths and trajectories. Multiple academic career paths exist in an academic institution including a clinical surgeon, clinical scholar, surgeon educator, and surgical scientist tracks.[12] Each of these tracks has differences in career goals, time allocated to nonclinical effort, and focus of nonclinical activities. Excelling and achieving promotion and tenure in these tracts requires meeting specific thresholds that currently are subjective based on expectations set by the individual institution or department. In general, the promotion and tenure process takes into account the physicians curriculum vitae and full bibliography, teaching portfolio, clinical services responsibilities, grant support, copies of peer-review publications, along with supplemental letters of recommendations. Some of these components are amenable to quantitative measurements to determine qualifications for promotion. The aRVU system similar to that proposed by Mezrich and Nagy will aim to provide such measures to fully understand the level of physician productivity in these areas. The ability to objectively measure components of the aRVU system such as time, author rank, impact factor, and grant funding are strengths of this system. The limitation resides in the inability to completely standardize and quantify the effort, academic value, and quality of each component. For example, it would be difficult to measure the quality of teaching even with the use of student evaluations. In addition, assigning a value for conversion factors or modifiers for each component of the aRVU would be extremely difficult let alone standardize across departments or institutions. Who is to say the value of a surgical educator is more or less that of the surgical scientist? Perhaps the aRVU system should remain separated based on different academic pathways and implemented based on physicians specific chosen academic track.

Regardless of the specifics of the aRVU system, it is critical that its development and implementation remain standardized across all institutions for each specific department. This standardization will create an equal field of opportunity for physicians within and between institutions by facilitating merit-based faculty hiring, promotion, and tenure. Much work remains in the formal development of the proposed qRVU and aRVU system, but once implemented should align all aspects of academic medicine to create a sense of institutional citizenship for physicians.

  Conclusion Top

The addition of the qRVU and aRVU to the currently accepted wRVU will allow academic institutions to compare the overall effectiveness of their tripartite academic mission. As the landscape for hospital reimbursements continue to change to include and expect quality domains and outcomes, so must the algorithm for physician compensation to include the missing pieces of value in the RVU. Likewise, the addition of a quantitative measure to track academic productivity and quality in a complex system for faculty appointment, promotion, and tenure will reward successful physicians by an equal merit-based system.

Financial support and sponsorship


Conflicts of interest

There are no conflicts of interest.

  References Top

Glass KP, Anderson JR. Relative value units: From A to Z (Part I of IV). J Med Pract Manage 2002;17:225-8.  Back to cited text no. 1
Hsiao WC, Braun P, Dunn D, Becker ER. Resource-based relative values. An overview. JAMA 1988;260:2347-53.  Back to cited text no. 2
Hsiao WC, Braun P, Yntema D, Becker ER. Estimating physicians' work for a resource-based relative-value scale. N Engl J Med 1988;319:835-41.  Back to cited text no. 3
2015 National Physician Fee Schedule Relative Value File Centers for Medicare and Medicaid Services; 2015. . [Last accessed on 2016 Jan 06].  Back to cited text no. 4
PFS Relative Value Files. Centers for Medicare and Medicaid Services; 2015. Avaialble from: . [Last accessed on 2015 Dec 23].  Back to cited text no. 5
Key Features of the Affordable Care Act By Year. U.S. Department of Health and Human Services; 2015. Avaialble from: . [Last accessed on 2015 Nov 22].  Back to cited text no. 6
Moffatt-Bruce S, Hefner JL, McAlearney AS. Facing the tension between quality measures and patient satisfaction. Am J Med Qual 2015;30:489-90.  Back to cited text no. 7
The Total Performance Score information. The Official U.S. Government Site for Medicare; 2015. Avaialble from:. [Last assessed on 2015 Nov 22].  Back to cited text no. 8
Readmissions Reduction Program. Centers for Medicare and Medicaid Services; 2015. Avaialble from: . [Last accessed on 2015 Nov 22].  Back to cited text no. 9
Hospital-acquired Condition Reduction Program. The Official U.S. Government Site for Medicare; 2015. Avaialble from: . [Lsat accessed on 2015 Nov 22].  Back to cited text no. 10
Mezrich R, Nagy PG. The academic RVU: A system for measuring academic productivity. J Am Coll Radiol 2007;4:471-8.  Back to cited text no. 11
Papaconstantinou HT, Lairmore TC. Academic appointment and the process of promotion and tenure. Clin Colon Rectal Surg 2006;19:143-7.  Back to cited text no. 12


  [Figure 1], [Figure 2], [Figure 3]

  [Table 1]

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