Evaluating RVU-Based Compensation Arrangements
Relative Value Unit (RVU) based compensation arrangements are increasingly popular for compensating physicians. Where collected revenue-based systems—historically common in group practice, for example—reflect the individual physician’s underlying payor mix, RVU systems are payor-mix neutral. A RVU system is therefore attractive to a physician employed by a hospital that treats patients regardless of their ability to pay. However, RVU systems may be tainted by payor mix and other market conditions, requiring that the analyst understand and examine the effects of this issue when using compensation survey data to establish fair market value incentive compensation based on RVUs.