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Clinician Compensation Changing in Healthcare’s Volume-to-value Transformation

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By Ralph Henderson, president of healthcare staffing, AMN Healthcare

March 21, 2013 - One of the biggest questions of healthcare reform affecting reimbursement and compensation is seldom heard in the national debate: What will happen to the RVU (relative value unit)? The complaint about the RVU is that, while it may do a good job of measuring procedures, tests and volume, it does a bad job of measuring qualitative aspects of healthcare, such as establishing good rapport with patients, reducing readmissions or convincing a patient to quit smoking.

Healthcare reform is pushing compensation in a new direction, toward value-based incentives for such achievements as high patient satisfaction and peer-review scores, quality benchmarks and efficiency instead of volume. At the same time, reimbursements are changing through new models including population-based costing in accountable care organizations (ACOs) and bundled payments for specific procedures or episodes.

But these dramatic changes will not happen overnight. For example, while more than 250 ACOs have been established, transition can take years. Trends in reimbursement and compensation are changing gradually, with value-based incentives being mixed in with RVUs.

An article in Physicians Practice quotes Peter Cebulka, director of recruitment development and training at Merritt Hawkins, an AMN Healthcare company, saying that “measuring physician productivity and the amount of care they provide to patients in the community is still going to be important because there’s a shortage of physicians nationwide.” Physician productivity will always be important when there are not enough physicians.

One of the foundational purposes of the Affordable Care Act (ACA) is to move away from reimbursement and compensation based on volume and productivity and to focus instead on quality, prevention and value. While physician compensation may always include some type of productivity measure like an RVU, changes in the RVU compensation model will ramp up in the coming years.

The ACA establishes an Independent Payment Advisory Board (IPAB), which will make recommendations regarding changes to physician payments and might be a mechanism to reduce the use of RVUs. A movement is afoot in the U.S. Senate to repeal the IPAB. Many providers, including the American Hospital Association, support the repeal. However, the board remains an important cost control measure to the Obama Administration.


Related research:
RVU based Physician Compensation and Productivity - AMN Healthcare

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