• It’s (past) time to dismantle the RUC

    If you’re an evidence-based thinker or an advocate of transparency you’ll practically be moved to tears by Brian Klepper’s account of the latest chapter in the life of a relatively obscure committee. It and our near-slavish deference to it explain much of what is wrong with the U.S. health system.

    Thus ends the latest attempt to dislodge what is perhaps the most blatantly corrosive mechanism of US health care finance, a star-chamber of powerful interests that, complicit with federal regulators, spins Medicare reimbursement to the industry’s advantage and facilitates payment levels that are followed by much of health care’s commercial sector. Most important, this new legal opinion affirms that the health industry’s grip on US health care policy and practice is all but unshakable and unaccountable, and it appears to have co-opted the reach of law.

    Too few know how much power the Relative Value Scale Update Committee (RUC) has and what it’s done with it. Though I’ve known about it for ages, I am guilty of rarely posting about it. Brian Klepper has been beating the drum for years. Give him and this issue a little time. His latest is on the Health Affairs blog and he blogs regularly at Care and Cost.


    • My question is why the RUC has so much power over relative pricing beyond Medicare. Why don’t private insurers use their own relative fee schedule?

      • I suppose we should begin with the assumption that adopting Medicare’s relative rates is profit maximizing. Why would this be so? I don’t know. Why would it not be so?

    • I understand the argument against a technocratic, unaccountable committee setting prices and assigning values (much like the Central planning boards of the Soviet Union, etc.) but I am somewhat surprised to hear Austin, Brad, et al. make this argument given that most of them buy into the consensus that we should actually attempt to fix a lot of the problems with a health care system through technocratic means.

      2 major issues with the idea that the IPAB (another committee of technocrats, albeit without the secrecy) would be better than an RVU:

      1. Their challenge would still be to set relative values for services–an activity that is inherently unfavorable to PCPs. Though IPAB could (in theory) only focus on eliminating many wasteful services (e.g., spine surgery), they would seem to confront many of the same bedrock issues once they try to revamp the whole scale (i.e., specialists really are performing much more complex tasks and do put in many more hours of training and in many cases, do create much more value than a PCP). Consider for instance, this quote from one of the links:

      “Ophthalmologists performing cataract procedures are now paid 12.5 times the hourly rate of PCPs involved in a moderately complex office visit, arguably a more complicated activity.”

      Many unbiased providers (ie not PCPs or ophthalmologists) would think that is ridiculous, yet would still agree PCPs deserve more reimbursement.

      2. The problem of capture by special interests is inherent to any committee (IPAB or RUC) where the regulated interests are going to care more than the average person and I don’t see why IPAB will be immune from that. Theoretically, RUC is relatively protected against that too and in reality, I don’t see anyone making the argument that its members vote without bias…

      • I don’t think we’re making the argument you claim we are. We’re saying the system needs to be changed. Even if one is for a technocratic process, one can be against the methods and means of the RUC.

    • Please excuse the typos in the above comment (e.g., RVU instead of appropriate terms, etc.)

    • Also, dont want to imply in any way from the above post that the current system is not in need of major reform–only that the reform ideas that I have heard also inevitably have tradeoffs that bear a lot of thinking…

    • The relationship between payors of healthcare and the major institutions who offer this healthcare functions as a profound institutional co-dendency. In effect, neither the payors nor the medical centers are able to maintain a connection to the over-all Basic Health Needs as opposed to the Complex Health Needs of each citizen. This especially impacts the broad spectrum of medical education, especially the capitalization of Primary Health Care. I have profound doubts that any national institution rooted within the Federal government could solve the institutional co-dependency that has paralyzed any effort at true healthcare reform.

      In the midst of this grand paradigm paralysis, we continue to have a maternal mortality rate that is 13 as compared to 3 – 4 (deaths per 100,000 live births per year).

    • V,

      Your core argument above is that regulatory bodies will inherently be likely to fall prey to regulatory control. That may or may not be true, but it was also the point of the Augusta PCPs’ legal challenge. They argued that the RUC was a “de facto” federal advisory committee, which made it subject to the public interest rules associated with the Federal Advisory Committee Act. (http://en.wikipedia.org/wiki/Federal_Advisory_Committee_Act).

      Not all federal advisory groups behave opaquely. David Kibbe MD and I did a compare and contrast – see http://careandcost.com/2012/02/03/trusting-government-a-tale-of-two-federal-advisory-groups/ – between the RUC and a federal health IT advisory body called The Health Information Technology Policy Committee (HITPC). The differences in approach are striking.

      Unfortunately, your statement that nobody challenges the RUC’s lack of bias is false. The AMA and the RUC’s Chair, Barbara Levy MD have repeatedly claimed that it is an unbiased process, using “objective analyses.” Then, on the other hand, she has said, “We assume that everyone is inflating everything when they come in. They are wanting to fight for the best possible values for their specialties.”

      As Austin said, the real issue is whether this is the process we should be using to feed what has become our largest and most influential economic sector.

      Brian Klepper

      • Co-dependency still applies regardless of whether or not the RUC is acting in the best interests of its direct sponsors. In effect, it is not acting in the best interest of the third party, the covered citizens using Medicare and its affiliated Medical Centers. As a result, payment for Primary Health Care has resulted in it being under capitalized. This is all complicated by the fact that Primary Health Care is not as insurable as the healthcare for Complex Health Needs. That is, it is neither predictable nor definable, as in an appendectomy or CABG. The E&M codes do not distinguish Primary Health Care from other E&M coding sources, let alone the quality of this Primary Health Care.

        And so, our nation is left with a healthcare system with no way to emphasize the value of resilient accessibility for all citizens, espcially for pregnant women. We have evolved a Primary Health Care industry that is terribly inefficient, unpredictably reliable, unjustly accessible and widely unacceptable. It is a root cause of many similar issues within the health care for Complex Health Needs.

        I vote for pre-paid Primary Health Care. Each Primary Physician and their Primary Health Care team would be capitated with a financial responsibility for all medication / DME (with a stop-loss and carve-out for certain high cost medications), diagnostic testing (with a stop-loss), and rehabilatation ( with a stop-loss). Given a 2-3 year buy-in for each Primary Health Care Clinic group (3-5 physicians), the result would be a level of cost reduction over-all not currently thinkable. Suddenly the Primary Physician would have equal standing in the healthcare industry to chose consultants who honor the role of the Primary Physician to act in the best interests of their patient citizens.

        • Sorry, but going back to the HMO model is useless. Yes, costs were contained for a short while, but then went right back up after several years.

          My opinion is that patients will need to bear more responsibility for costs. Many insurances are trying to do this, but we need to do it more in both Medicaid and Medicare.

        • Why is primary care less insurable than specialty care? Specialists can order a lot of services as well, and their services are a lot more expensive. With things like mental health and cancer, the insurer really has no idea how much you’ll ring up in bills, either. In contrast, primary care services are a heck of a lot cheaper. Heck, private insurers should be paying the primary docs more on their own accord.