measuring doctors by dollars

Measuring Doctors by the Dollars They Generate Is a Systemic Failure

Healthcare is about service to physicians and patients in the same way government is about service to citizens—sometimes, it’s just not. One could devote thousands of words to illustrate this concept, but a picture is worth at least as much:

Cops & Docs

Here’s what’s becoming increasingly clear as we reckon with more than 135,000 deaths from the coronavirus pandemic, and as we watch (or participate in) protests across all 50 states in response to systemic racism and extrajudicial police killings: In America, healthcare and government are about profit and power protection. Get in the way of either institution’s ability to collect cash at your own risk.

What happens when COVID-19 comes between a hospital and their profits? Just ask Intermountain Healthcare (who did not respond to a request for comment). Their in-person clinic visits fell off a cliff when the pandemic struck. In a mid-June press release, they claimed those missed visits equated to $435 million in lost revenue. Rather than chalk that up to the cost of protecting thousands of critically ill patients during a global pandemic, they stopped funding physician 401ks to balance the books.

Here’s another example. Many agree that the pandemic provides opportunity to pause, do some soul searching, and reflect on what truly matters. Maybe that’s what 8 nonprofit hospital systems were doing when they accepted $1.7 billion in federal bailouts and then laid off more than 30,000 of their own workers—deciding that profits are what truly matters, and that healthcare worker salaries aren’t worth the ROI.

Of course, there are exceptions to these rules. Lakshman Swamy, MD, a frontline pulmonary and critical care doctor at Boston Medical Center (a not-for-profit, privately owned hospital) lauds his executive team for their response to the pandemic. In the early days of the crisis, he notes, they committed to doing whatever it took to put patients first. (It’s worth noting that this is only commendable in a world where others do not.) The hospital’s leadership also quickly turned those words into action by voluntarily discontinuing elective surgeries—one of their key revenue streams—because these non-essential procedures could become catalysts for disease spread. BMC immediately began hemorrhaging money, but Swamy says patients and physicians –and the pandemic response as a whole—benefited greatly.

“It sounds like an easy thing, putting patients first,” Swamy explains. “But it’s not. Every hospital is financially incentivized to do the opposite. From a purely financial perspective, it would have made a lot more sense for the hospital to keep doing elective procedures until the state stopped them.”

Boston Medical Center sacrificed revenue to protect their patients’ and staff’s health. But how often are these types of sacrifices being made? Hospital mission statements make it seem like selfless service is the status quo. But there’s no mission without a margin in America, and the numbers tell a different story. The U.S. healthcare system devoted roughly half a trillion dollars—yes, trillion with a T—in billing- and insurance-related administrative costs in 2019. That is, to keeping a close eye on margins, profits, and power protection.

One might expect amazing administrative results from such an expense, like massive reductions in waste and increases in efficiency. But what we’ve got is something else entirely: a system that tosses between $760 billion and $935 billion into the trash every year. A system in which per capita spending on healthcare administration has increased by more than 3,000% since 1970, while spending on physicians has increased by a relatively measly 200%. One in which patient and physician satisfaction are seen as a nice-to-have, not a must.

In healthcare, the scale that balances missions and margins seems to be increasingly tilted toward margins, with missions taking a back seat as a result. So how does this margin-minded world affect physicians? In many cases, physicians’ contributions to their hospital’s margins are the gold standard by which they are judged. In fact, in most cases, the quality of a physician’s performance is reduced to a single financial metric: the relative value unit, or RVU.

Defining Physician Value

RVUs were created by Bill Hsiao, a research professor of economics at the Harvard T.H. Chan School of Public Health in Boston, in the late 1980s. Here’s the big idea, according to Amol Navathe, MD, PhD, a physician, health economist, and commissioner of the Medicare Payment Advisory Commission, a nonpartisan agency that advises Congress on Medicare policy:

“RVUs are part of a broader system that is used to value the activities that physicians and other clinicians do relative to one another.”

Shivan Mehta, MD, MBA, MSHP, a gastroenterologist and associate chief innovation officer at University of Pennsylvania, adds additional context: RVUs are a way of valuing “the effort that’s required for physicians to provide care to patients.”

For example, a heart bypass surgery requires a lot of time, unique training, and substantial patient risk, whereas someone with little training can promptly administer a flu shot. Therefore, a heart bypass surgery holds more relative value, as measured by RVUs.

“The initial conceptualization of the RVU was a way to get input from clinicians practicing in the real world and then use that input to create a unified metric to be able to create comparisons. It was initially conceived of primarily as a tool to measure, not to reimburse,” Navathe says.

But since their introduction into healthcare more than three decades ago, RVUs have become much more than a procedural measurement tool—now they are the primary measuring stick for physician performance and payments, too. This can be problematic.

“At the end of the day, organizations respond to financial incentives,” Mehta says. “Practices and health systems absolutely respond to that, in terms of the resources they provide and who they hire.” Physicians respond, too. One anonymous doctor wrote on Reddit that RVUs reduce the noble profession to a few simple steps: See more patients, count more RVUs, earn more money. “While you get used to it eventually, the push to do more with less eventually turns into squeezing blood out of a rock,” the physician wrote.

Here’s how it got like this: In 1991, the American Medical Association created the RUC, or Relative Value Scale Update Committee, “to make recommendations about the relative value of physician work for Medicare and Medicaid beneficiaries based on CPT codes,” according to a JAMA viewpoint article. In 1992, Medicare began reimbursing hospitals and physicians based on the values the RUC recommended (although Medicare is not bound to use the RUC’s recommendations). Now, both commercial and government payers use RVUs to reimburse hospitals.

RVU reimbursement has trickled down to physicians as well. The system has “evolved into the primary mechanism and structural method by which we reimburse physicians for their activities,” Navathe says.

The RVU-Driven Doc

It makes sense to measure physician performance. After all, if you can’t measure it, you can’t improve it. But measuring physician performance by the ability to produce RVUs means physicians are incentivized to do more activities and procedures and see more patients, whether or not they believe that is the right way to provide the highest-quality care. Within this system, improving physician performance means incentivizing them to produce more RVUs.

“It puts us in a challenging position as physicians, where we need to balance the needs of our patients with the viability of our practice,” Mehta says.

That’s one hell of an ethical gray zone. What happens when physicians find themselves in a situation where their patient’s needs conflict with their ability to keep their job and pay their bills?

“It’s an existential question,” Navathe says. “Do we want more hip replacement and knee replacement surgeries? Is that what we want as a society? Or do we want people to be able to walk up a flight of stairs if they couldn’t before? Right now, the way our system is primed, it seems like what we care about is how many hip and knee replacements we can get done, not how we can improve the ability of people to walk, exercise, and climb up stairs.”

Measuring physician performance by the numbers of patients they see and procedures they do—the hip-surgery mindset, not the mobility mindset—has brought a wave of unwelcome consequences:

1)Procedural specialists (e.g., surgeons, interventional specialists, anesthesiologists) earn more and are more highly valued by health systems than non-procedural specialists (e.g., pediatrics, family practice, psychiatry). This financially incentivizes medical students to choose specialties over primary care, which is especially worrisome amid a primary care shortage. It also incentivizes health systems to invest more heavily in hiring procedural versus non-procedural specialists, potentially leading to gaps in care.

2)Doctors are incentivized to see as many patients as possible, which can lead to overwork and increase the dehumanization of care. But that’s not causally tied to better patient outcomes or satisfaction.

3)Between one-third and one-half of physicians report symptoms of burnout, citing bureaucratic tasks, overwork, lack of respect, electronic health records, insufficient reimbursement, lack of autonomy, and “feeling like a cog in the wheel,” as primary drivers. Roughly 73% of physicians claim burnout has affected their relationships, and about half said they would take a pay cut if it meant they’d have better work-life balance.

Making Changes

Of course, the consequences don’t end there—they hit patients, too. Gaps in care mean patients can’t get the services they need. Fast-paced clinic visits can lead to lower satisfaction. And burned out doctors might not be in the best mindset to deal with high-stress, high-consequence situations when patients need them most.

“The problem with this process is that it focuses on things that are easy to measure,” Mehta says. “But it’s very hard to evaluate all the things that go into being a good physician.”

A good starting point is to measure physicians at least partly by patient outcomes and satisfaction, but RVUs are generally blind to the outcomes of the procedures they value. “I can’t remember the last patient I’ve taken care of who said to me, ‘You know, what I want is to get a lot of surgeries done.’ Right? What they want is health. And so until we align around health, we’re going to have a screwy system,” Navathe says. “The way we measure physicians, regardless of specialty, has to be focused on the health outcomes associated with their specialty.”

Navathe is working to make that new measurement system a reality. Five years ago, he began working with the BlueCross BlueShield plan of Hawaii, called the Hawaii Medical Services Association (HMSA). The group recognized significant population health problems in the state and that many local physicians were experiencing burnout.

To tackle these problems, Navathe and team designed a completely new, non-transactional payment system for primary care that’s based on a per-patient monthly fee and adjusted for the risk and severity of a patient’s illness.

“It’s intended to remove this fee-for-service treadmill and give physicians the flexibility and liberty to care for patients in the way that was best for them and best for the patient,” Navathe says. “When COVID hit, this statewide group of primary care physicians was unique in that they were not worried about their financial well-being. They didn’t have to worry, because they’re part of the population health and public health infrastructure.”

Missions and Margins

RVUs are not some bogeyman to be hunted down and eliminated. Rather, they are symbolic of one shaky step on the journey toward figuring out what we in the healthcare industry value.

Right now, it appears that we value reimbursements and profits above all else. Lofty concepts like patient outcomes, patient satisfaction, population health, and physician well-being are an afterthought.

Fortunately, there will be more steps on the journey. There will be more experiments with alternative payment models, like the one Navathe is helping pilot in Hawaii, and the ones a small cadre of doctors are mounting with the direct primary care movement, where there are no middlemen between physicians and patients.

In the interim, it’s up to physicians and patients to speak out—to make it clear that they matter. Physicians are more than dollar signs and widgets. Patients are more than cost centers.

And it’s up to healthcare leaders to look in the mirror and ask themselves why their business decisions don’t align with their patient-centered mission statements. The truth is, incentives for healthcare are not aligned with the mission of healing. It creates healthcare systems where profits matter more than people, including physicians. Is that what we want?

No, it’s not.

“We want to incentivize our doctors to do the right thing. We want to incentivize them to do what society cares about. We want them to be caring, we want them to provide high-quality, evidence-based care,” Mehta says. “Most doctors got into medicine because they wanted to help take care of people, to make them better, and to be a good colleague. We don’t want them to lose sight of why they got into it in the first place.”

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