Relative value units have been the standard for measuring physicians’ productivity, determining compensation and other metrics for years. But as healthcare shifts to value-based metrics, the future of the RVU is increasingly seen as uncertain.
History of the compensation system
Physicians’ productivity levels are measured in relative value units per full-time employee. According to the American Association of Physician Leaders, RVUs are made up of three components: work, practice expense and malpractice. Of these components, the most prominent is work-only RVUs, which represent over 50% of the total RVU value, according to AAPL.
RVUs – especially wRVUs — are traditionally converted into a compensation total via the conversion factor. This formula also applies to the reimbursement structure, though it is applied to the total RVU. CMS has used several variations of this formula, including geographic adjustment factors or geographic cost indices.
The use of RVUs began in the late 1980s and early 1990s with the American Medical Association’s relative value scale. In 1991, a relative value scale update committee was created to act as an advisor to CMS and has updated RVU values by CPT code every five years.
Today, the uses of RVUs vary, but they are often used as a means to determine reimbursement’ measure and evaluate provider productivity’ measure cost; benchmark standards for surveys; determine provider compensation and serve as a basis for negotiating contract rates with payers.
RVUs are expected to remain an active tool in healthcare, but will likely develop alongside other forms of productivity management as healthcare shifts to value-based care models.
Where RVUs stand among physicians, healthcare leaders today
Physicians are logging more work than ever, but their productivity isn’t translating into higher reimbursement, according to Kaufman Hall’s “Physician Flash Report,” published Aug. 11.
Productivity, measured in wRVUs per FTE, reached 6,449 for physicians in the second quarter of 2025, according to the report. That marks a 12% increase for physicians year over year.”
“Increases in productivity metrics, coupled with higher compensation and expenses, reflect a reality that physicians and advanced practice providers are working more than ever before,” Matthew Bates, managing director and physician enterprise service line leader at Kaufman Hall, said in a news release. “Revenue has increased because physicians and providers are working more, but the data also show that reimbursement is not keeping pace. In the coming months if more patients lose insurance coverage, this trend will likely get worse.”
In September, CMS proposed an efficiency adjustment to its physician fee schedule that represented a 2.5% pay reduction for thousands of procedures. This decrease in wRVU assumes that specialists have become more efficient in certain common procedures. However, multiple organizations have objected to this premise, contending that time, costs and complexities are increasing.
Radiation oncology, radiology and some surgical specialties would unfairly see a decrease in RVUs, according to Livonia, Mich.-based Trinity Health, one of the organizations that submitted comments to CMS regarding this update.
Renton, Wash.-based Providence, a 51-hospital system, said that the “efficiency adjustment is not the appropriate way to bring more timeliness to the RVU process.” The health system said the Medicare Economic Index has annually grown 3% to 5%, which “would compound the proposed 2.5% reduction to a more than 5% cut in non-time-based codes each year.”
Overall, the adjustment is “concerning” and lacks “empirical evidence,” according to a bariatric surgeon at Philadelphia-based Jefferson Health.
RVUs’ future as healthcare goes value-based
Some systems have already begun to create and implement new systems for measuring physicians’ productivity and determining compensation.
Morgantown, W.Va.-based WVU Medicine’s Heart and Vascular Institute has grown from 25 providers to more 200, expanding from a $225 million regional program to a $2 billion healthcare destination in less than a decade — all as the organization has shifted away from wRVUs and toward value-based care.
“Many programs are compensated based on a salary base with an at-risk component for productivity,” Vinay Badhwar, MD, executive chair of the institute, told Becker’s. “To truly enact a functional heart team model in a new environment with new procedures and changing evidence, we needed to eliminate any motivations of activity other than a commitment to evidence-based, quality-first care.”
As it managed this shift away from RVUs, WVU also began dedicating an entire hospital floor to physician offices for the institute.
“When you think about a facility that’s at max capacity every single day, it seems counterintuitive to invest in space for administration and prioritize uniting team members for the one-heart-team concept,” Dr. Badhwar said. “But this is what we did. What physicians really want is to practice the art they trained for. Not fight for resources, but support each other.”
According to SullivanCotter’s 2025 “Physician Compensation and Productivity Survey,” healthcare organizations are gradually expanding their productivity and compensation measures outside of RVUs. For example 75% of organizations now include productivity and patient experience measures, and outcomes-based metrics increased 4.6% year over year. Additionally, 90% and 52% of survey respondents reported using sign-on bonuses and student loan repayment, respectively, as recruitment incentives.
Organizations are increasingly blending guaranteed pay with performance-based incentives to balance stability and motivation.
