Et tu, Brute?

Sep 10, 09 Et tu, Brute?
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Slate writer Darshak Sanghavi wrote a fascinating article about how healthcare prices are set.  I have often wondered how doctors determine the value of a particular service.  Unfortunately, it is even more arbitrary than I initially believed.

William Hsiao, a Harvard economist, created a scale that would measure the value of every service that a doctor provides.

Medicare adopted the Resource-based Relative Value Scale (RBRVS) in 1992 and most HMOs followed shortly thereafter.  When doctors perform a procedure, the value of that procedure is measured in relative value units.  Medicare adds up the total number of RVUs and multiplies that number by a conversion factor of roughly $40.  Medicare then pays the doctor that amount.

Dr. Sanghavi sees a direct correlation between the dearth of primary care physicians and the value that the RBRVS places on “skillful” and “technical” procedures.

He writes, “Fundamentally, the entire payment model of American health care drives medical centers, doctors, and hospital managers to push for more fancy procedures at the expense of primary care doctors.”

No wonder our health is abysmal.  Instead of receiving the necessary preventative care that primary care physicians can provide, the healthcare industry has made a choice to treat us when we are past the point of no return…because they can get a fatter paycheck?!

It gets worse.  The American Medical Association’s recommendations are prepared by a subgroup called the Relative Value Scale Update Committee.  Out of 29 members, 23 practice in subspecialties.

As a result, RVUs that require face time with a patient, in essence the type of medicine that doctors and psychiatrists practice, are devalued in favor of “specialty” procedures.  Dr. Sanghavi goes as far as to call this practice price-fixing.

According to his article, “…the big-money specialists dominating the AMA have demanded more and more “relative value” for their procedures.  Medicare has rolled over and complied, which has drained revenue from the little-money workhorses—primary care doctors.”

Thus, the doctor who performs a quadruple by-pass is paid more than the primary care physician who could have helped the patient naturally and non-intrusively lower their cholesterol.  We already know that the healthcare system is broken.

We blame the giant pharmaceutical companies and the healthcare insurers, but who would have thought that even the doctors have colluded against our interests?  This cannot continue.

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