Estimating Physicians' Work for a Resource-Based Relative-Value Scale

We have developed a resource-based relative-value scale as an alternative to the system of payment based on charges for physicians' services. Resource inputs by physicians include (1) total work input performed by the physician for each service; (2) practice costs, including malpractice premiums; and (3) the cost of specialty training. These factors were combined to produce a relative-value scale denominated in nonmonetary units. We describe here the process by which the physician's work was defined and estimated. The study asked two questions: What is the physician's work for each service performed? and Can work be estimated reliably and validly? We concluded that a physician's work has four major dimensions: time, mental effort and judgment, technical skill and physical effort, and psychological stress. We found that physicians can rate the relative amount of work of the services within their specialty directly, taking into account all the dimensions of work. Moreover, these ratings are highly reproducible, consistent, and therefore probably valid. (N Engl J Med 1988; 319:835–41.) THERE is a growing consensus that the prevailing method of paying for physicians' services should be fundamentally reformed. Increasingly, physicians, patients, and insurers find the current system based on usual, customary, and reasonable charges to be cumbersome and administratively complex. 1 The current method of payment has also been faulted for "creating patterns of allowed charges that embody inappropriate incentives for the use of medical services, as well as for physicians' decisions on where to locate and what to specialize in." 2 Yet another criticism is that the system "encourages physicians to specialize, to practice in urban and suburban areas, and to . . .