Why practices should measure productivity

Q: We are looking at various ways to measure physician productivity in our large practice. One method under consideration is work relative value units (wRVUs). Can you explain what these are and why we might want to consider using them?

A: You can measure physician productivity in more than one way. Methods range from number of visits and surgical cases to charges or professional payments. The industry has begun to move toward wRVUs as a standard, consistent metric for productivity.

Physicians adopt wRVUs to measure productivity because they are nationally recognized benchmarks; exclude revenues to technical components of ancillary services, such as labs and imaging; and because of the direct relationship between this metric and reimbursement levels.

As part of clinical integration efforts, health systems and large medical practices need to address a few important considerations when incorporating wRVUs into a provider contract. Because the Centers for Medicare and Medicaid Services annually assign wRVUs to each Current Procedural Terminology code, they can and do change every year. These changes can affect a physicians’s productivity totals on a year-over-year basis.

For this reason, it’s important to remember this fluctuation when determining how to assign wRVUs and incorporate them into physician contracts. I recommend assigning them based on the date that service is rendered. If that isn’t an option, you can set a “trigger” to permit rebasing wRVUs used with a contract as a percentage shift in wRVUs from year to year.

Let’s hear from you! The answer to our reader’s question was provided by Thomas J. Ferkovic, RPh, MS, managing director, SS&G Healthcare LLC, Akron, Ohio. Send your practice management questions to medec@advanstar.com. Also engage at www.twitter.com/MedEconomics and www.facebook.com/MedicalEconomics.