Every so often, the medical blogosphere develops a rash of posts on the ”RBRVS Update Committee” (RUC). The latest outbreak has manifested itself here, here and here. What amazes me is how consistently such discussions miss the real problem with a central authority “recommending” a price for primary care (or anything else). This question from from Bob Doherty is a case in point:
We need to ask if the RUC were to disappear, who should recommend the work involved in physician services? Economists and physicians hired by the federal government?
Well, the obvious answer is succinctly provided by one of Kevin’s commenters:
The same people who decide payments to providers of food, jewelry, housing, haircuts, gasoline, manicures, legal advice, accountng advice, furniture, internet services, insurance, clothing, etc.
Price results from the constant tension between collective demand and available supply. When a group of “experts” arbitrarily sets a price, they inevitably misjudge one or both of these, producing supply shortages (primary care) or excess demand (ER overcrowding).
Reorganizing the RUC won’t fix the problem—-because the concept behind the RUC is economically untenable. No group of alleged experts, be they specialists, PCPs, or Nobel Prize economists, can possibly possess all the information necessary to set a price at the “right” level.
Only the market (i.e. the collective decisions of millions of providers and consumers) can do that. And as long as our “leaders” refuse to face this fact, shortages and gluts will be a way of life in the health care industry. Time to chuck the RUC.
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