What is an RVU, and how are they used to determine some physicians’ salaries?
RVUs stand for Relative Value Units. While there are several methods to determine RVUs, the most commonly used is Medicare’s Resource Based Relative Value System (RBRVS). This is an arbitrary method that, because it is generated by a government agency, is based on fiscal budget constraints. Many employers will use this method to track productivity. Typically, physicians beginning employment should have a base salary that guarantees them a certain level of compensation until patient/procedure volume can be established. Sometimes, employers will establish a lower base salary for a new physician but offer a bonus if productivity exceeds a certain threshold. This can be an ideal situation. There are three components to Medicare’s RVUs: work, practice cost, and medical liability. Most compensation models use work RVUs, which are based on the complexity of the procedure, skills required, and time. They vary significantly depending on the services performed. Other considerations for a physici
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