Interested in whatever is true, good, beautiful, real? Then let's join together in a conversation that began centuries ago, and which will extend throughout eternity, when we feast at the Lord's Table. This blog is born of wonder, but welcomes doubters. So let's sit down and talk...
Thursday, June 14, 2012
The RUC and "The Secret World of Health Care Pricing"
I heard this last night on Marketplace.Our health system is so screwed up-- so geared to special interests and not those who are sick-- that I cannot see how it will ever be possible to reform it.
We're down to counting mere days 'til the Supreme Court shares its
thoughts on the healthcare reform law. The ruling will talk about
constitutionality and the individual mandate and the Commerce Clause.
And maybe about the rising cost of health care in this country. So to
that end... who do you suppose sets the price of individual medical
procedures? If you said insurance companies or the government, you're
only half right. Because the prices your insurance company pays are
based on a set of values listed in a phone-book sized directory of
billing codes. Those codes are pretty much the economic hierarchy of
modern medicine. They say what's costs more: a colonoscopy or a CT scan
or chemotherapy? And those values are set by a closed-door committee of
the American Medical Association.
At the Marketplace Health Desk at WHYY, Gregory Warner has been trying to figure out how that committee works. Gregory Warner: It's called the Relative Value Update Committee, but everyone knows it as the RUC. It's a committee of the AMA. It meets every four months
in a hotel conference room. And right here -- this being a radio story
-- is where I'd play you the sound of one of those meetings. You might
hear heated debates between some three dozen doctors over which
procedures should be worth and which ones Medicare should pay higher
But I can't play you that sound because RUC meetings are invitation
only. Observers are sworn to secrecy. Even the names of the doctors on
this private committee were -- until recently -- kept confidential. For
those who have been before the RUC, it's a powerful experience.
Richard Waguespack: I've
never sat before Congress or any congressional committee, but it is like
sitting before a committee that that is the final determiner.
Dr. Richard Waguespack is with the American Academy of
Otolaryngology. That's Ear, Nose and Throat docs. It's been his job to
come before the RUC to defend his specialty's procedures.
Waguespack: And to make sure that they are properly valued.
The value of a procedure, the fee paid to the doctor, is figured out
by adding up hundreds of tiny variables -- from how many average minutes
of time the doctor might spend to how many rolls of gauze he might use.
These variables are measured and voted on by the RUC.
For example, Dr. Waguespack recently presented a new procedure to the RUC called balloon sinus surgery. In this treatment a tiny plastic balloon
is used to widen your sinus cavity. In this case the physician doesn't
spend many minutes of time, but the supplies are expensive -- $2,600 for
a little plastic balloons, and you have to buy a new balloon for each
patient. So that was factored into the price. While the exact dollar
amount varies a lot by geography and other factors, the average fee is
around $3,000 per sinus. Here's Dr Waguespack:
Waguespack: It was felt that these balloons would be used one per sinus.
But doctors use the same balloon for up to six sinuses. Billing
Medicare $18,000 for extra balloons that they didn't need or buy.
Waguespack: Some people were expressing concern this appeared to be an undue windfall.
It would kind of be like your mechanic changed your four tires and
charged you for four sets of wrenches. Except that would be fraud. In
this case, the way the RUC set the value, doctors have no choice but to
Charles Koopmann: The system didn't work, OK? And it didn't work with everyone having good intentions.
Dr. Charles Koopmann has served on the RUC for 20 years, or as long
as there's been a RUC. So, he's got a lot of experience with valuing
codes. He is also the lone Ear Nose and Throat doctor on the RUC --
which means that if anyone in the room that day might have realized that
doctors could use the same balloon multiple times, it would have been
Koopmann: Did it enter my
mind? It really didn't. All we wanted to do is make sure that the costs
got covered for a sinus that you were operating on. And, um, that we
were successful in. And it turns out we were awfully successful!
I talked to a number of ENT surgeons. All of them said that that most
doctors in their field would know that you can reuse a balloon in
multiple sinuses. Tom Salzer is an otolaryngologist in Texas.
Tom Salzer: Yeah, I think they would understand that for two reasons. One is it's commonsense.
And the second reason is the device company, owned by Johnson & Johnson, will hold your hand every step of the way.
Salzer: They'll come to
your office -- you have to do a certain number of them in the operating
room -- and they are there for your first several to help you through
Yet apparently no one came to help Charles Koopmann or the other
doctors on the RUC that priced this procedure. A central criticism of
the RUC is its exclusivity. It has no health economists, no patient
groups on its board. RUC members primarily hear from and are chosen by
physician specialty societies.
Brian Klepper: Doctors end up coming in and lobbying for their own interests. Having a seat on the RUC is a pathway to do that.
Brian Klepper is a health care analyst in Florida. When he says lobbying you don't have to imagine Washington types with bags of money. He
says its sort of built into the process. When the RUC wants to measure
those hundreds of variables that go into valuing a code, the first thing
that happens is that specialists on the RUC survey other specialists in
Klepper: When the RUC is
evaluating a procedure, they make it known to the society, the society
sends out notices that: 'It would be really good if all of our members
responded to this because you know the way you respond to this is going
to be directly reflected in how we get paid!'
Officially the RUC plays only an advisory role. But a study in Health Affairs last month found that Medicare accepts that advice 90 percent of the time.
Remember, we're talking about $80 billion of taxpayer money. But the
RUC is even more powerful than that -- because Medicare's reimbursement
rates are used as the basis for almost every private insurance company
in the country.
Charlie Baker: This is the platform that decides how we pay providers.
Charlie Baker is the former CEO of the Harvard Pilgrim health plan, a
not-for-profit insurer in Massachusetts. He says if you want to know
what's wrong in health care, Google the RUC.
Baker: By having a process
that for all intensive purposes isn't a public process, and doesn't
appear to actually be accountable to much of anybody, I think that's
kind of un-American!
Medicare officials tell me that they are pushing back against the
influence of specialists. They started something called the Misvalued
Codes Initiative. And they say that new codes often come into the world
with mistakes in them, and Medicare can address them. This year Medicare
reduced the fee paid for balloon sinus surgery by 43 percent, so a
little less of a windfall.
Don Berwick is a former director of CMS, that's the federal agency that runs Medicare.
Don Berwick: Remember that there are thousands of codes that are in play in any year.
And hundreds of thousands of variables that go into pricing them.
Berwick: It would take a
long time -- years -- for CMS, even if it had the resources, to go back
over every single code and make an independent judgement from what the
RUC has made.
The irony is this, he says: as long as we've agreed to pay doctors by
adding up the hundreds of specialized things that a doctor does in the
course of a procedure, the only people with the expertise to sort
through all these variables will be other doctors. So for better or
worse, he says, Medicare is stuck with the RUC. Because for now, there's
no one else.
In Philadelphia I'm Gregory Warner for Marketplace. Ryssdal: There's more about the RUC, including what the RUC is and isn't according to the American Medical Association.