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Care Quality and Cost: Why Poor Quality can Cost More

Posted Sep 22 2008 4:36pm

Two recent posts by Niko Karvounis (see this link and this link) discuss critical issues concerning healthcare quality (care effectiveness/results) as it relates to healthcare costs. I, too, have written extensively (e.g., see this link, this link, and this link ) about the challenge of measuring and improving quality and controlling costs, and will now share some thoughts in the context of her interesting posts.

Her first post is about the history of managed care. It discusses the managed care model's original vision, early stages of growth, the trouble it had managing quality, the shift from non-profit to organizations driven by the profit-motive, the focus on managing costs alone, the fallout, and its decline. The second post, which focuses on the challenge of healthcare quality assessment and improvement, overlaps the first in that failure to deal effectively with quality-related issues was a key factor in managed care's demise. It goes on to discuss how low care quality is contributing significantly to the high cost of American healthcare and poor health of its citizens, but is not getting the attention it deserves for some very interesting reasons, including patients' inability to determine what constitutes high-quality care.

These posts reinforce what I've been saying for the past two decades: Unless we make healthcare quality a priority, cost will continue to spiral out of control and the U.S. continues to deliver inferior care compared to many other industrialized countries. After all, low quality means excessive errors and omissions, as well as less effective preventive care and treatment of existing conditions. According to the Business Dictionary, the cost of poor quality is the cost of 'not doing it right the first time,'" which translates to fix then fix it again when it breaks. In healthcare, this waste, redundancy, and ineffectiveness means increased cost to the patient (and society), not to mention increased risk of harm from multiple unnecessary procedures, adverse affects of medication changes, infections from longer hospital stays, progression of diseases caused by delay in receiving the right care, and so on.

High quality, on the other hand, means keeping people healthy through good well-care (including prevention and effective self-management of chronic conditions), as well as the timely and efficient treatment of health problems with effective sick-care leading to more rapid recovery and lass chance of relapse.

Improving care quality starts with doing an effective job measuring quality, as well as promoting decisions and actions that continually improve quality.

There are several ways to measure the quality of care.

  • Comparative-effectiveness research, which focuses on comparing the effectiveness of different preventive and treatment approaches, does not take cost into consideration.
  • Taking both cost and quality into account, means focusing on care value, which is what cost-effectiveness research does. One way to deploy this is the strategy is to do what Great Britain's National Institute of Health (NIH) does through use of the Quality Adjusted Life Years (QALY) method. The QALY method is used to determine if a healthcare treatment is worth the cost. Another method is to determine the treatment procedures and medications that produce similar outcomes, and then select the ones that cost the least, but generate results as good as the more expensive ones.

Once we evidence about the quality and cost of competing methods, we've got to determine how to analyze, package, and disseminate such data as useful and understandable information that guides decisions and actions in ways that control costs and lead to better outcomes. For more, see this link about improving care quality with evidence-based practice guidelines and this link about using evidence-based decision systems, both on our Wellness Wiki.

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