At first, the decay was subtle. In the 1980s, Medicare imposed price controls upon physicians who treated anyone over 65. Any provider wishing to get compensated was required to use International Statistical Classification of Diseases (ICD) and Current Procedural Terminology (CPT) codes to describe the service when submitting a bill. The designers of these systems believed that standardized classifications would lead to more accurate adjudication of Medicare claims.Share
What it actually did was force doctors to wedge their patients and their services into predetermined, ill-fitting categories. This approach resembled the command-and-control models used in the Soviet bloc and the People’s Republic of China, models that were already failing spectacularly by the end of the 1980s.
Before long, these codes were attached to a fee schedule based upon the amount of time a medical professional had to devote to each patient, a concept perilously close to another Marxist relic: the labor theory of value. Named the Resource-Based Relative Value System (RBRVS), each procedure code was assigned a specific value, by a panel of experts, based supposedly upon the amount of time and labor it required. It didn’t matter if an operation was being performed by a renowned surgical expert—perhaps the inventor of the procedure—or by a doctor just out of residency doing the operation for the first time. They both got paid the same. (Read more.)