title: Putting a price tag on physician services. Reform of Medicare's payment system moves ahead.
abstract: Medicare's reasonable-charge method of reimbursing physicians may be replaced soon with a fee schedule based on a relative value scale. The new system will attempt to apportion physician payments more equitably than in the past and significantly reduce long-term spending growth. The new system's linchpin will be a relative value scale derived from the resource costs that efficient physicians are expected to incur when rendering service. The higher a service's expected cost in relation to a standard service, the higher its relative value and payment amount. Harvard researchers recently developed a resource-based relative value scale based on a survey of about 410 services in 18 specialties. They divided total resource costs into two components: physician work and practice costs. The former, more difficult to measure, represents the physician's time, skill, physical and mental effort, and stress from iatrogenic risk. The ultimate objectives are to allow relative values across specialties to be comparable and to allow one conversion factor to transform these values into dollar amounts. Other critical factors include transition period, conversion factors, geographic multipliers, mandatory assignment, and volume controls.
mesh_terms: D001294:Attitude to Health; D005245:Fee Schedules; D007357:Insurance, Physician Services / Q000458:organization & administration*; D006278:Medicare / Q000458:organization & administration*; D015442:Medicare Assignment; D015895:Relative Value Scales; D014481:United States