The RUC COMMITTEE
The Hidden Hand Guiding Healthcare
Imagine a small, powerful group that meets behind closed doors and makes decisions that ripple through every doctor's office and hospital in the country.
It's not a secret society or a shadowy government cabal. It's the RUC, the Relative Value Scale Update Committee.
Understanding it is critical to comprehend the economics of American healthcare.
The RUC (pronounced "ruck") stands for the Relative Value Scale Update Committee.
It's a panel convened by the American Medical Association (AMA) that advises Medicare on how to value doctors' services.
And by advise, dear reader, I mean what CMS uses to deploy their fee schedules.
In simpler terms, the RUC helps determine how much physicians are paid for procedures and services.
The committee comprises 31 members, most of whom are nominated by major national medical specialty societies.
Think cardiologists, orthopedic surgeons, and anesthesiologists. These members are experts in their fields, but here's the catch: they're also stakeholders.
They're the doctors whose paychecks will be affected by the RUC's decisions.
The RUC meets three times a year to review data, deliberate, and make recommendations to the Centers for Medicare & Medicaid Services (CMS).
They assess the "relative value" of medical procedures, which involves analyzing the time, skill, and intensity required for each service.
This relative value is then converted into dollar amounts, influencing how much Medicare (and often private insurers who follow Medicare’s lead) reimburses doctors.
The RUC brings together top specialists to provide detailed, expert analysis of the complexity and effort involved in medical procedures. This helps ensure that reimbursements are based on a nuanced understanding of medical practice.
By creating a standardized value system, the RUC helps maintain consistency in how medical services are priced across the country. This can help streamline billing and reduce administrative overhead.
The most significant criticism of the RUC is that it's essentially a group of doctors setting their pay. This can lead to the overvaluation of high-priced procedures, skewing the healthcare system towards more expensive interventions.
The RUC favors procedural specialties (like surgery) over cognitive ones (like primary care).
Favoring procedural treatments versus primary care and preventative treatments incentivizes healthcare systems operated by MBAs and Hospital Administrators to emphasize expensive procedures over preventive care and chronic disease management.
When the RUC tilts the scales, it affects the entire healthcare ecosystem. Overvalued procedures can lead to higher healthcare expenses.
Underappreciated fields like primary care can suffer from underfunding, leading to fewer doctors entering these essential areas.
The ripple effects touch patients, doctors, insurers, and ultimately, the economy.
The RUC operates without transparency, yet it profoundly impacts the American healthcare system.
It's a perfect example of how small groups of experts can wield enormous power, for better or worse.
Understanding the RUC means recognizing the complex, often invisible forces that shape our healthcare landscape.
It's a reminder that even in medicine, economics and incentives drive decisions that affect us all.
So, next time you ponder the cost of a medical procedure or the state of primary care, remember the RUC. It's a small acronym with a significant influence, hidden in plain sight.
-Rojas out
References:
https://www.ama-assn.org/about/rvs-update-committee-ruc
https://thepcc.org/2022/05/03/ama’s-little-known-committee-sets-physician-service-prices
How can you determine reimbursements without performing "job Costing?"
But yea, we have a free market. We have anything but.... Not only in most cases are prices fixed, regardless of quality or the physican, but this dramatically skews the supply & demand of physician specialties/subspecialties.
E.g. A fellowship trained & very much in-demand Developmental & Behavioral Pediatrician might expect to make ⅔-¾ what a non-fellowship trained Pediatrician makes. It's no wonder ~½ the fellowship slots go unfilled. It's actually amazing that even ½ do get filled! And a regular Pediatrician might make ½ what a general surgeon makes, who again makes less than a surgeon in a subspecialty. Subspecialtists shold always make more than their non-subspecialist counterparts. The question is how much? Only a market can truly determine this.
Of course the AANP very smartly read the tea leaves long ago and along with the government's & AMA's misguided limiting of residency slots (again skewing the supply/demand of physicians) we now have degree mills pumping out unqualified PCPs. The AANP has exactly the opposite incentive that the AMA did over 100 years ago to standardize and make rigorous the education of doctors.
What a colossal mess. In the end, the patient loses.