Quality Care Cost Analysis

Quality Care Cost Analysis

In the contemporary medical world, much emphasis is on the need for providing quality care. However, this has not been that easy given the demands that such an action comes with its institutionalization. A common worry among many people is whether quality healthcare indeed lowers the healthcare cost. An association between the two is not clear given the mixed findings across studies that have sought to find out the relationship of the two. In essence, this analysis purposes to establish the connection between the quality and cost of healthcare. Moreover, a comparison of the public and private agencies that address issues that relate to cost and quality of healthcare is another key highlight of this discussion. A look at the current and projected initiatives targeting to improve quality and cost also form part of this paper. Lastly, implications of the relationship between cost and quality healthcare to nurses and evidence-based practice also form part of this subject. With such analysis, an understanding of the relationship between health care cost and quality is inevitable.

Primarily, the association between quality and health care cost remains unclear given the lack of consensus in the findings of studies focusing on this issue. Such is the case given that scholars have established mixed results on this account. Central to the mixed results is the different measures of quality (structural, process, outcome) and cost as well as the type of analysis used (geographical versus hospital analyses). As such, this has been difficult to ascertain the relationship. However, worth noting are the existent findings of the association between the two aspects of healthcare. To begin with, according to Hussey, Wertheimer, and Mehrotra, (2013) high-quality care comes with low financial implication given that the patients have a low incidence of readmission linked to complications of ineffective management. As such, the high-quality care is indicative of low health care cost. The other type of association between the two elements depicts that institutionalization of high-quality care is only possible in the presence of high cost. A case in point is the observation by Hussey, Wertheimer, and Mehrotra, (2013) that hospitals offering high-quality care have patient pay a high bill for the services provided. However, such an observation is not accurate given the existence of certain states with high spending on health care, and yet the quality of care is not at its best (Hussey, Wertheimer, & Mehrotra, 2013). Evidently, from these instances, it is beyond doubt that the relationship between the cost and quality of healthcare is and weak and unclear.

Secondly, a differentiation of the roles and activities played by both the public and private agencies addressing cost and quality of care is also of the essence. The Agency for Healthcare Research and Quality, AHRQ (public) and Institute for Healthcare Improvement (private) are examples of agencies that have devoted their efforts to this cause in the USA. As such, they are befitting to illustrate the distinctness of roles and activities of both the public and private agencies. AHRQ’s role is to generate evidence-based findings that will make health care safer, higher quality, more accessible, affordable, and equitable. Another role is to work within the U.S. Department of Health and Human Services and others partners to ensure that evidence is comprehended and utilized.  Notable activities of the AHRQ include but not limited to research, quality improvement activities, and public reporting (Agency for Healthcare Research and Quality, 2014). On the contrary, Institute for Healthcare Improvement (IHI), a private agency, plays the role of improving the health care systems, their quality and value. Its activities revolve around five priority areas, namely, improvement capability, person- and family-centered care, patient safety, quality, cost, and value activities as well as Triple Aim for Populations (Institute for Healthcare Improvement, 2017). Clearly, with such an illustration of the roles and activities of both public (AHRQ) and private (IHI) agencies, it is undeniable that they are synergistic to one another despite their distinctness in their operations.

Current and projected initiatives focusing on improving quality while controlling the cost as well as their unintended consequences are also worth noting when analyzing this issue. The Hospital Value-Based Purchasing Program is an example of a current initiative targeting to improve quality and cost control. In this program, hospitals with high-quality services receive incentives while poorly performing hospitals receive little or no payments. The initiative breeds an unintended consequence of excluding chronic patients from the pay-for-performance scheme(Chen, Chung, Lin, & Lai, 2010). A case in point of a projected program targeting improvement of quality and cost control is the bundled payments for all payers. An initiative of this kind will align the bundled payments across the public and private payers. Consequently, the bundled payment reforms will facilitate the co-ordination of care, minimization of variation in health care spending and provision of transparency and accountability. Such outcomes are reminiscent to Arkansas Health Care Payment Improvement Initiative, which pilots the success of bundled payment reforms (Calsyn & Lee, 2012). The only real unintended consequence is the unhealthy competition of providers for patients with profitable bundles.

Lastly, the implications for nurses and evidence-based practice are also important for the understanding of this matter. Nurses have a role to play in the improvement of quality and cost control. An accomplishment of this task is possible through nurses making innovations that spearhead quality and cost control (Sherman, & Mary Bishop, 2012). Another implication is that nurses need to rely on the evidence-based practice that epitomizes quality and cost control. Clearly, with such steps, it is beyond doubt that high quality and affordable cost will become part of healthcare.

In closure, indeed the relationship between quality and cost of healthcare remain unclear given the lack of consensus in studies that have focused on this subject. However, the two have a weak association as per the existent evidence. That said, the nurses has an active role in ensuring that they contribute to this agenda by coming up with innovations that stand for quality improvement and cost control. Failure to do so, however, will prolong the harsh effects poor quality through increased healthcare spending.


Agency for Healthcare Research and Quality,. (2014). Summary | Agency for Healthcare Research & QualityAhrq.gov. Retrieved 13 January 2017, from https://www.ahrq.gov/research/findings/final-reports/qualityindicators/sum.html

Calsyn, M. & Lee, E. (2012). Alternatives to Fee-for-Service Payments in Health Care – Center for American ProgressAmericanprogress.org. Retrieved 13 January 2017, from https://www.americanprogress.org/issues/healthcare/reports/2012/09/18/38320/alternatives-to-fee-for-service-payments-in-health-care/

Chen, T., Chung, K., Lin, I., & Lai, M. (2010). The Unintended Consequence of Diabetes Mellitus Pay-for-Performance (P4P) Program in Taiwan: Are Patients with More Comorbidities or More Severe Conditions Likely to Be Excluded from the P4P Program?.Health Services Research, 46(1p1), 47-60. http://dx.doi.org/10.1111/j.1475-6773.2010.01182.x

Hussey, P. S., Wertheimer, S., & Mehrotra, A. (2013). The association between health care quality and cost: a systematic review. Annals of internal medicine158(1), 27-34.

Institute for Healthcare Improvement,. (2017). About IHIIhi.org. Retrieved 13 January 2017, from http://www.ihi.org/about/Pages/default.aspx

Sherman, R., & Mary Bishop, D. N. P. (2012). The business of caring: What every nurse should know about cutting costs. American Nurse Today17(11), 1-3.



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