Diana K. Verrilli

AN OVERVIEW OF THE DEVELOPMENT AND REFINEMENT OF THE RESOURCE-BASED RELATIVE VALUE SCALE : THE FOUNDATION FOR REFORM OF U.S. PHYSICIAN PAYMENT

Responding to distortions in payment rates between services, policymakers in the United States have sought a systematic and rational foundation for determining physician fees. One such approach to paying physicians, the Resource- Based Relative Value Scale (RBRVS), determines fees by measuring the relative resource costs required to produce them. On January 1,1992, the Medicare program implemented a new payment system for physician services based on the RBRVS. This article provides a brief history of the RBRVS and a summary of the methods and data used to derive it. This overview represents the culmination of 6 years of research by the Harvard RBRVS study team and provides a road map to the studys concepts and definitions. The overview also provides a context for the articles in this issue that describe five major studies undertaken since 1988. The studys overall results are presented in the last article of the series.

The Growth of Physician Services for the Elderly in the United States and Canada: 1987-1992

The authors compared the growth of expenditures, prices, and volume and intensity of physician services delivered to the elderly in the United States and Canada from 1987 to 1992 using claims-level data from U.S. Medicare and from Ontario, Quebec, and British Columbia. Services were classified into clinical categories and per capita annualized expenditure, price, and volume growth ratios were calculated for each category. The expenditure growth rate is higher in the United States than in Canada for evaluation and management services (8.8 percent versus 4.5 percent), but it is lower for procedures (2.9 percent in the United States versus 4.8 percent in Canada). For procedures, prices decreased 2.4 percent per year in the United States but increased 1 .0 percent per year in Canada, while volume increased faster in the United States (5.4 percent versus 3.8 percent in Canada). In both countries, high volume growth rates are observed in categories containing newly emerging procedures. Although policies to control prices appear easier to implement than policies to control the volume and intensity of medical care, their success in controlling expenditures is uncertain. Nonetheless, Canada has been more successful at controlling the growth in the volume of procedures than the United States.

The measurement of physician work and alternative uses of the resource based relative value scale.

On January 1,1992, the Medicare program implemented a new payment system for physician services based on the Resource Based Relative Value Scale (RBRVS). The RBRVS has been widely accepted as a rational and systematic approach to measuring the resource costs associated with physician services. In addition to deriving physician payment rates, the RBRVS provides a useful metric that allows the measurement and comparison of provider utilization rates and productivity across physicians performing a varied mix of services. In this study we describe the measurement of physician work, discuss alternative ways in which work values can be used to monitor physician service utilization (e.g., profiling physician practice patterns), measure physician productivity, and determine physician compensation.