JAMA : the journal of the American Medical Association
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BACKGROUND--There is a general perception that procedural medical services are reimbursed at an inappropriately greater rate than cognitive services. By congressional mandate, the Health Care Financing Administration (HCFA) has been directed to establish a Medicare fee schedule to shift funding under a budget-neutral assumption from procedural to cognitive services. To provide a rational basis for this change, Hsiao et al (Harvard-Hsiao) developed a resource-based relative value scale (RBRVS) that equates the value of a service to the resources necessary to generate the service. METHODS--Instead of focusing on relative values and fee schedules ("price-per-unit-service"), the present study employs the standard commercial/industrial method of determining reimbursement rate (income divided by hours of labor) for 15 medical and surgical specialties. Data from independent sources are used to determine income and hours of professional effort for each of the specialties studied. Harvard-Hsiao and HCFA predicted the percent change in income for each of the specialties under the initial RBRVS and the HCFA fee schedule. The predicted income was then employed in this study to recompute reimbursement rates under the newly proposed payment systems. ⋯ --The RBRVS, and the HCFA fee schedule to the extent that it is based on that scale, are inappropriate bases for the reform of the physician reimbursement system.