The Why’s and How’s of Relative Value Units (RVUs)

I’m necessarily digressing below from the theme begun in last month’s column on using “relative value units (RVUs)” in measuring physician work and productivity. What follows briefly describes what RVUs are and from whence they come. For more information on how the RBRVS and RVUs work read the two-part article on the ACEP web site: “Basics of Reimbursement” Part I and Part II (ACEP membership is not required).

On January 1, 1992, federal regulations that implemented federal resource-based relative value scales (RBRVS) for the payment of physicians under Medicare went into effect. Since that time all federally sponsored physician payment programs and many others have adopted the RBRVS method of payment. ACEP estimates that over 70% of all payments for physician services are based on the RBRVS data, so that even if Medicare patients are not a large part of your practice, RBRVS will impact what you are paid for a given service (see web page citations above).

The RBRVS method uses RVUs to measure the work involved in performing a clinical service, the expense involved in delivering the service and the malpractice risk associated costs of performing the service. The “work RVUs” incorporated in the method explicitly include the physician work expended on a patient service before, during and after the service itself. Thus work RVUs provide an explicit tool to measure and compare physician work and productivity across a varied mix of services, including the services delivered by emergency physicians.

Each clinical service an emergency physician provides to a patient is billed through the use of a “CPT Code”. The book, Current Procedural Terminology (CPT), is a listing of descriptive terms and identifying codes for reporting medical services and procedures. The purpose of CPT is to provide a uniform language that accurately describes medical, surgical, and diagnostic services, and thereby serves as an effective means for reliable nationwide communication among physicians, patients, and third parties.

Each CPT code is associated with an RVU value that is segmented into work, practice expense and malpractice costs as noted above. The association of RVUs with the CPT codes that most apply to your practice can probably be best obtained from your billing service. The entire list of CPT codes and associated RVUs including the segmentation can be downloaded at the Centers for Medicare & Medicaid Services site.

Once we understand that every physician delivered clinical service has a CPT code with an associated RVU, this allows us to use the measurement of RVUs to begin the process of comparing our physician group members. Measurement of RVUs billed, adjusted for clinical hours worked, or “RVUs per hour” provides a far more reliable tool—better able to compare productivity among physicians—than does the traditional emergency medicine measure of patient’s per hour. Why? Because over equal intervals physicians can no longer assert that their productivity is unrecognized because their patients are sicker: The very measure, relative value unit, adjusts for that phenomenon. Only in the event that one or another group member is routinely assigned to a distinct clinical population (e.g., “minor-care,” “fast-track” or pediatrics) or to a distinct schedule (e.g., all nights) should that individual’s productivity be excluded from direct comparison with colleagues.

Let me once again emphasize that not everything about a doctor can be told from measurements of clinical productivity as measured by RVUs per hour. In fact, this one measure will give a hugely distorted evaluation if not coupled with at least measures of patient waiting times or throughput intervals and measures of medical staff, ED nursing and support staff and patient satisfaction. Other subjective evaluations such as “group citizenship” also matter. Some current approaches to economic benchmarking also seek to evaluate emergency physicians’ comparative utilization of laboratory tests, imaging studies and consultations.

Someday perhaps we’ll have other quantitative measures of physician quality, but in the meantime RVUs are one useful guide. Nonetheless, RVU measurements should not be used to bludgeon physicians, but rather used as a measure for comparison to articulated expectations as I explained last month in describing the pyramid for medical staff development. Measurement and comparison of RVUs with adoption of the pyramid by your medical director or ED chief speaks to enlightened leadership; bullying by your group’s leader over productivity and RVU comparisons suggests it may be time to move on.

The group should measure monthly for one year before identifying baseline performance expectations. Monthly measurement with reporting of the group’s overall performance at the 20th, 50th, 80th and 99th percentiles should complement monthly reporting to each group member of individual performance. Provision of individual performance data in this fashion, supported with explicit feedback will over time tend to reduce the variability of performance among the group on this one measure. Remember, not to lose sight of other important subjective and objective measures as mentioned above.

Reporting productivity in this fashion will quickly unmask differences in quality of documentation among members of your group. Exhortation to improve documentation is not the answer and neither is a new system for documentation whether dictation, templates or electronic. Rather, investing energy in identifying the best documentation captured by members of your own group and using these “best documentation practices” when teaching the rest of the group will improve documentation overall while simultaneously optimizing revenue capture which is based upon documentation. In those groups in which physician earnings are based upon the individual emergency physician’s own documentation, the incentive is obvious. But rare is the group that does not depend at least in part on direct clinical revenues and reminders of the importance of clinical revenues to the group’s well-being associated with other feedback as part of the implementation of the pyramid for medical staff development may help.

If physician productivity measurement is used as a threat, it is probably time to look for another job, if possible. Yet, when used as one measurement in implementing the pyramid for medical staff development it can be an invaluable tool for both assisting in the maturation of the group practice as a whole and in retaining excellent emergency physicians.

Measuring Productivity Means Setting Expectations, and—Possibly—Managing Poor Performance

I’ve begun to hear from some of you commenting upon earlier columns. In particular, several have asked about ways of getting started with measurement so as to help you decide when to add a partner to your group or when to intervene with a partner who is only seeing one-half as many patients as the other group members. In the second example just noted, if you are actually measuring the “one-half as many” you’ve already started your measurement. If it’s merely an impression, than you are yourself raising barriers by asserting the ratio without the evidence. Correspondents have asked me to recommend a text or other literature that they could peruse to educate themselves on the measurement of physician performance. Unfortunately, almost nothing is available that has been actually validated in practice. Yet, models with some face validity may be found, mostly among consulting organizations.

My hospital recently employed a consulting group as part of an external assessment of our medical staff credentialing and peer review processes. At an instructive presentation at our executive committee meeting the consultants proposed a “pyramid” for medical staff development. While proposed for the general medical staff, applicability to any department, including my own was obvious.

Figure 1: Pyramid of Medical Staff Development

The pyramid (figure 1) begins with the obvious: Get the best people you can onto your team. Since I’ve only one column this month, we’ll leave recruiting for another time. The interlocking components of setting expectations, measuring and giving feedback are the key components of the change process. Like you, I believe that most physicians want to “do the right thing.” Unfortunately, most of us are increasingly uncertain as to what the “right thing” is these days, which is why clearly setting expectations is so important to beginning measurement.

Let’s face it, what I am talking about goes by many names, but measuring productivity is a component of physician profiling. By itself measuring physician productivity is value neutral, but as I’ve previously written (April 2000, EMN) productivity measurements can be used as a bludgeon or as a teaching tool. Unless the three stages of setting expectations, measurement and feedback are in place, jumping to “managing poor performance” or “corrective action” is simply bludgeoning your staff. Thus, if some measurement of physician productivity is put in place it must be implemented based on some clearly articulated expectation of productivity. Well, what shall we use? Probably, the most widely used measure is patients per hour (PPH), which is also the most easily measured. While I do not think this measure has as much value as another—I prefer to measure relative value units (RVUs) per hour—I’ll discuss how PPH might be measured since so many of you have expressed interest.

Several sources suggest that 2.5 PPH is an appropriate benchmark of physician productivity.[1],[2] But is it? Should you even set a benchmark? Or should you develop baseline information in your local environment first? I derive my answer from the pyramid, which suggests that measuring and comparing to articulated expectations is the desired process. Given the uncertainty of what constitutes appropriate productivity despite the references cited below and the excellent discussions by Tom Scaletta, MD at the AAEM web site (see “Rules of the Road Q & A) and elsewhere including the emergency medicine internet mailing list (subscribe by sending “sub emed-l” to, I believe it is far more important to measure your own team’s productivity over-time before setting your own baseline rather than subscribing to another’s. For example in our adult acute area having measured our PPH for more than two years we still see a PPH of less than 2.0, but then our admission rate in that part of our ED nears 45%.

Returning to my correspondents’ questions, how shall we measure PPH? An easy route to measurement of PPH is asking your billing contractor to provide your patient volume by physician for the dates of service of interest and count your scheduled clinical hours over the period for which you’ve measured patient volume. Measure PPH for a month at a time or at least for a period that includes approximately 150 patients and track results over a minimum of six months before making any decisions. Graphing the results of PPH, RVUs/hour and RVUs/patient against the 20th, 50th and 80th percentile for the group tells quite a story (figure 2). Besides as the pyramid advises us, feedback is the next step after measurement. More on RVUs next month in Part II.

Figure 2: Physician Productivity by RVU/Hour, RVU/patient, Patients/Hour

Most physicians, provided the monthly graphical feedback about PPH described above, will over time adjust their performance to the mean of the group. When this productivity measure (or RVUs/hour) is coupled with measures of patient waiting times or throughput intervals and measures of medical staff and patient satisfaction then decisions about improving productivity or altering staffing will become apparent.

What about the physician who does not come into line? The physician who insists that her or his patients are more sick or complex or otherwise more difficult to evaluate? Relative value units per hour more closely reflect the patient complexity by more directly measuring the physician work done in patient care, but RVUs are harder to measure. Yet, conversion to this measure should not be the answer, rather reaffirmation of the expectation clearly articulated at hiring and through regularly scheduled reviews and meetings assures that the physician is identified as non-compliant with the expectations s/he had earlier agreed to. Unfortunately, counseling or disciplinary corrective action may be required after a sufficient period of monitoring without response.

The medical staff development pyramid provides a basis for exerting leadership within a group in an open and aboveboard fashion. Implementing the pyramid approach no later than your group’s next annual review and planning session provides a basis for improving your group’s cohesiveness and performance the following year.

[1]Graff LG, Wolf S, Dinwoodie R et al: Emergency physician workload: a time study. Ann Emerg Med 1993; 22(7) 1156-1163.

[2] Weston, K: A difficult fix: staffing the emergency department to meet patient demand. Clinical Initiatives Center, ED Watch #1 1999. The Advisory Board Company, Washington, D.C.

A Model for Those not in Charge: Lateral Leadership

Starting a new column in a monthly publication has been a strange experience. This second column, written without the benefit of any feedback from you, my physician colleagues, has been a far more difficult undertaking than last month’s maiden effort. I realized that espousing the importance of measurement is good, but how can that effort be undertaken that effort if you are not the boss or if measurement driven change would not be welcomed in the ED? Recent publications offer new insights into transcending both of these barriers to improvement.

Sometimes, we find ourselves charged with the responsibility for solving some problem but without the authority to proceed. Frustrating! Issuing direct orders won’t solve the problem; people will look at you as if you’ve just grown another head. Perhaps administration in preparation for an upcoming JCAHO survey — especially now that medical errors are in the news — has said all physicians’ must write their charts and prescriptions legibly. You know you would stand a better chance of having your neighbor’s cat roll over on command. In this situation, negotiation specialist Roger Fisher and his colleague Alan Sharp (Getting It Done: How to Lead When You’re Not in Charge, Harper Business, 1998) suggest a model of “lateral leadership.”

Messrs. Fisher and Sharp detail a five-step method that anyone can apply, thereby becoming a “lateral leader.” Establishing goals, thinking systematically, learning from experience (while it’s happening), engaging others, and providing feedback seem intuitive on first reading. In practice, rather than giving orders as if some distant leader from above, engage colleagues as partners right at the scene of the work. Applied consistently to meetings or projects, this will enhance the likelihood of successful accomplishment of the project.

As an example, if you’re not the boss, why would your feedback possibly matter to a colleague? We’ve all heard the expression, “You catch more flies with honey than with vinegar.” Appreciation, simply and genuinely expressed, is always valued. So, too, will helping a colleague get his point across by asking a feeling question: “How do you feel about doing it this way?” Genuine appreciation and support of a colleague will pay dividends later.

Persistence Pays

A new approach may be remarked upon or distrusted at first, but just as a new hair style is accepted in time, so too will a new way of working with colleagues — if you persist.

Yet, perhaps the ED isn’t ready for the changes precipitated by initiating measurement in support of evaluation and improvement. A recent commentary by Daniel DeBehnke, MD, (Acad Emerg Med 2000;7:282) offers a seven-step approach for organizational change. As Dr. DeBehnke observes, regardless of which model (QA, CQI, TQM, PI, etc.) the ED might adopt as a change process, the steps are basically the same and provide a worthy guide.

Begin by determining where you are, or as I wrote last month, “start measuring now.” Knowing where you stand when you start enables your later demonstration of the magnitude of your success. Deciding where you would like to be may be the mandate that’s been forced upon you — legible handwriting — or more optimistically, the consequence of your group’s effort at setting an ambitious but realistic goal.

You, whether the boss or lateral leader, will be the process champion and thus take charge of both measurement and the process change whose result you seek to measure.

Gaining Buy-in

Critically important, gaining buy-in to the process change is the next step. Engaging others and responding candidly to their questions and concerns will gain believers or at least quiet some dissidents. A few engaged, credible colleagues — especially those trusted by co-workers — are important to get started. Do not wait for 100 percent buy-in or group consensus; the process will never move forward. Early, credible supporters will bring others into the fold over time. Devote the time and personal attention one-on-one, early on to gain the support from opinion leaders.

Tools that support measurement and the change sought ease implementation. Examples of support tools include custom order sheets — such as a chest-pain order sheet — with boxes to check off that comply with practice guidelines. Optimizing physician charting is easier with a laminated pocket-size card with prompts for complete dictation or a paper chart with lightly printed prompts for all aspects of a standard history and physical examination. A charge-nurse end-of-shift report form can simplify measurement when solving problems of admitting patients to the hospital is the focus of the effort. Support tools make it easier for even a naysayer to participate while maximizing measurement and supporting change.

Giving feedback both to the group and to each individual is not sufficient. Specific advice on desired behavior change must be suggested. Most physicians believe they understand what is required, but results will improve if colleagues are engaged and everyone learns from experience by providing specific suggestions for an alternative action.

For example, I always go back to a referring physician after a patient complains that his physician told him, “The ED should have … [done something different].” I always listen to the physician, hear what he has to say, and encourage him to call me the next time, even page me if it’s an odd hour rather than complain to the patient about the ED. I tell them, “The patient can’t fix the problem in the ED, but I can if I know about it. Also, if you complain to me and I don’t fix it, you can complain about me to the hospital CEO.”

Re-evaluate Results

Make certain to re-evaluate the results. Measure more than once before deciding whether the goal has been accomplished or must still be tweaked. Accomplishing a goal of changing the organization or colleagues in a particular direction requires re-evaluation of progress and reinforcement of the desired behavior. Change in the emergency department and the physicians who work there is an ongoing constant, or should be. “Even if you’re on the right track, you’ll get run-over if you just sit there,” said Will Rogers.

Whether measuring and improving something about the emergency department or something about the practitioners who work there, effecting lasting change requires both constant effort and a multi-factorial approach. A systematic process for changing the ED and the application of lateral leadership can help achieve goals, without turning the leader into a two-headed monster in the eyes of colleagues.