Dr. Hsiao’s team calculated a work value in a new currency called relative value units (RVUs), based on (1) the work/time spent by a doctor for the visit or intervention, (2) the overhead incurred in rendering the service, (3) the cost of training required to learn to perform the service, and (4) the malpractice expenses involved. That RVU score was then multiplied by a conversion factor that was adjusted annually and varied slightly by location to determine a dollar payment. It was an elegant but complicated algorithm and—it turned out—one ripe for manipulation.
