In recent months I have observed a problem of growing importance in academic medicine. It deals with academic leaders using Relative Value Unit (RVU) quotas as the standard of satisfactory clinical performance. By coincidence, I received a note from a friend—let's call her Jane, an oncologist at a West Coast medical school. She describes the problem very well (and with passion) so we start with her words:
“In view of your usual interest in ‘leadership,’ I am surprised that you have not addressed an issue which I find appalling—namely the transition of leadership in academic departments from inspirational, charismatic individuals to a new cadre of accountants whose goal is bottom line and who thus lead via spreadsheet. Clinical faculty members are basically viewed as ‘RVU-generators’ with little interest in the quality of care given or the impact of their efforts on patient care (a seemingly counter-intuitive approach in view of what potential grateful patients might donate to their departments). The result is the use of clinical incentive targets (read ‘RVU’) for individual faculty. In our department (and in many others I know of), faculty members are assigned RVU targets based on the proportion of their salary assigned to the clinical budget and pegged to some benchmark.
“In my department, the assessment of one's clinical performance is based entirely on whether or not one fulfilled the RVU target; there is not even lip service paid to the quality of care administered. In other words, a high volume poor quality care is rewarded more than a lower volume of high quality care. Since such performance targets are used to dole out incentive bonuses, it is no surprise that such incentive schemes have resulted in changes in behavior that have been well documented. Financial incentives often lead to more procedures ordered, more elaborate therapy than needed, longer hospital stays, and schemes to maximize one's RVU total. The latter is associated with direct admonitions from department leaders to ‘up-code’ as much as possible.
“Ironically, every day we read that the problem with medicine is that physicians are rewarded for giving more care rather than better care. So I find it particularly galling that this is the reward scheme at many academic centers, including mine, that are supposedly ‘ahead of the curve.’ And, of course, I suspect that the message such schemes send to residents and med students cannot be one that we would be proud of.
Finally, I would not be surprised if many such schemes would be considered fraudulent. With bonus plans that incentivized physicians to up-code a visit, the modern EMR will generally and happily compile a note that meets the criteria for the visit code selected whether or not the documented ‘work’ actually took place. I believe that academic physicians are put in a terrible ethical bind by such incentive schemes.”
I told you she was passionate on this issue!
In the course of my consulting work I observed another example of “RVU-itis” first hand in a non-academic community setting. A medically and financially successful mid-size oncology practice works well with a community hospital, serves on hospital committees, and generally is pleased with the association. However, the hospital now wants to buy the practice. The hospital has already purchased a number of practices in the community in several other specialties including primary care.
Many hospitals are buying practices to prepare for the opportunity to participate as an Accountable Care Organization under Obamacare, which requires controlling all costs for an episode of care in a single bundled payment.
Although the practice members work well with the hospital, they have one major concern about being purchased and becoming employees of the hospital. The practice has been together for many years. They began with and maintain a style of practice that allows more time spent with each patient, and ample time to discuss clinical problems as a group; their reputations in the community are stellar. They understand that they could make more money by seeing more patients, but state that they “make enough” and are unwilling to change their culture. Physician employees of the hospital are tracked and judged by the RVUs they earn.
The hospital has offered generous buyout terms to consolidate all oncology activities under one umbrella. But as employees, they feel that they could very well lose the satisfaction they enjoy in the deliberate pace and high quality of their practices if forced to spend less time with each patient. Furthermore, such a change might also affect relationships with their patients, who have come to appreciate the current style and culture of their practices.
This problem is a subset of the “culture shock” of private practice docs being employed by hospitals that I described in my column in the April 10 issue (http://bit.ly/1kQANRk). But in this case, both academic and private practice doctors are at risk of being indirectly forced to compromise the quality of care they provide and tempted to game the system by up-coding their patient encounter to gain more RVUs. Also, low RVU accumulation by a faculty member may directly or indirectly affect consideration for promotion.
Position of Other Parties Involved
So let's look at the position of the other parties involved. The chair of an academic department is very dependent on the clinical revenues generated by the clinicians for non-reimbursable activities. He looks at RVU accumulation and sees a wide spread of “performance.” He may jump to the conclusion that the “poor performers” are lazy, inefficient, or both, and feels that he must put pressure on them to generate more RVUs.
He, in turn, is being pressured by the dean of medicine to “be more productive” in the clinic. His bonus, if any, and his stature as a “strong chairman” are at risk if his department doesn't “meet expectations.”
In the community setting, the hospital administrator tracks and controls the RVU accumulation financially. Pay is pegged to performance, but hardly ever to the quality of care or with the flexibility to adjust to the difficulty of a patient or his/her particular clinical situation.
Administrators are good at crunching numbers, but rarely have I seen an administrator address the quality of care provided by physicians (except in safety committees, and the like). And the trustees of hospitals award the salary and bonuses of top administrators based on financial performance, as in any commercial industry, with not even a nod to the quality of care in the institution.
One wonders if we are losing our way as physicians. The past six years have been economically difficult for most Americans, but the vast majority of doctors, whatever their specialty and institutional allegiance, have personally continued to do very well financially. However, practices and hospital systems have not matured sufficiently to consider “pay for quality” to be at least as important, and I would say more important, as “pay for volume.”