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The Cost of Efforts to Improve Quality

David Dranove, Katherine S. E. Reynolds, Robin R. Gillies, Stephen S. Shortell, Alfred W. Rademaker and Cheng-Fang Huang
Medical Care
Vol. 37, No. 10 (Oct., 1999), pp. 1084-1087
Stable URL: http://www.jstor.org/stable/3766919
Page Count: 4
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The Cost of Efforts to Improve Quality
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Abstract

Background. Virtually all hospitals in the United States report that they engage in efforts to improve quality, such as continuous quality improvement (CQI). Little is known about the costs of these efforts and whether they are associated with improved outcomes or lower patient-care costs. Objectives. The principal objective of this study was to provide benchmark data on the costs of efforts to improve quality. The authors also attempted to determine if quality improvement expenditures are correlated with outcomes and/or condition-specific hospital costs. Methods. Detailed information on the cost of quality improvement was obtained from hospitals participating in a broad study of CQI activities. These data were correlated with patient outcomes and condition-specific costs. The subjects were medium to large hospitals throughout the United States. Senior managers provided budgetary information on direct costs of quality improvement, and details about meetings associated with quality improvement. They also provided summary medical bills for all patients undergoing total hip replacement and coronary artery bypass graft surgery. The billing information was combined with data provided by the Health Care Finance Administration to estimate condition-specific costs. Patients were directly surveyed to obtain information about satisfaction and outcomes. Results. There is a wide range of expenditures on quality improvement activities. Meeting costs are a substantial percentage of total costs. Neither total costs nor meeting costs are correlated with condition-specific costs. Discussion. Hospital managers can be expected to insist on evidence that quality improvement expenditures produce tangible benefits. This article provides benchmark estimates of those benefits and a methodology for further research.

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