Relative value units: from A to Z (Part I of IV)

Relative value units (RVUs), originally developed as a physician payment mechanism, have expanded into a valuable practice management tool that allows common denominator analyses and per-unit comparisons for both clinical productivity and expense data. Use of RVUs in practice management falls into three broad categories: productivity, cost, and benchmarking. These will be covered in a series of four articles. RVU analysis can be readily applied to strategic planning, resource allocation, budgeting, provider compensation, cost-based fee schedules, payer analysis, contract review and maintenance, per-procedure profitability analysis, etc. Exactly what are RVUs? Where did they come from? How do they differ from encounters and fees in terms of measuring provider productivity? How can they be used to increase cost-effectiveness and maximize productivity within medical practices? This initial article discusses RVU basics and sets the groundwork for the series.