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Wanted: Evidence That Improving Quality Cuts Costs

By Tinker Ready  
   May 12, 2016

There's hope. And there's reality. On close inspection, the link between cost and quality is actually pretty fuzzy: We just don't know.

One of the incentives for improving the quality of healthcare is the notion that it will also lower costs.

Ideally, patients will have a medical home to go to instead of an emergency room.

Ideally, physicians will choose treatments wisely instead of ordering expensive, low-value scans and lab tests.

Hospitals have already reduced avoidable readmissions. That suggests they got care right the first time and equals real money. Result: Lower costs, better quality.

But on close inspection, the link between cost and quality is actually pretty fuzzy.  

Some say there is little evidence to support the idea that better care will cost less. It is possible that better quality and high costs can be tackled at the same time.

We just don't know.

And, in cases where one doesn't lead to the other, it may not be realistic to think a single strategy will get the job done. 

Two recent studies touch on the issue. A review of five routine, but high-volume clinical encounters, such as asthma evaluation, found no correlation between price and quality.

In another study, University of Michigan researchers looked at payments by the Centers for Medicare & Medicaid Services after the agency added a price metric to its Hospital Value-Based Purchasing (HVBP) program last year.


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Tinker Ready is a contributing writer at HealthLeaders Media.

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