Skip to main content

The Relationship Between Cost and Quality

By January 28, 2013Commentary

If you spend more for something, it is likely better quality, right?  And poorer quality should cost less, doesn’t it?  We all know from our daily experience that this relationship does not necessarily hold.  Health care is extremely complex and it makes sense that trying to figure out the cost/quality relationship for health care goods and services is not easy.  It is made harder by the element of time, since these services or goods, singly or in combination, can have long-lasting effects.  Research compiled in the Annals of Internal Medicine attempts to ascertain whether there is any consistent relationship between these two attributes.   (Annals Article)   The authors first note that there are methodological issues relating to inconsistent measures used for both quality and cost across studies.   The completeness and accuracy of data sources can also be an issue.  And doing the analysis on a geographic, provider unit or patient unit of measurement can also be confounding.  These researchers found 61 studies that they deemed relevant and included in their meta-review.

The studies used quality measures which could be fit into one of the five categories established by AHRQ–structure, process, outcome, patient experience or access, or a composite of these.  Cost was accounting cost, charges by providers, expenditures by payers or something like a care intensity index.  Health care status was addressed by a variety of methods.  After attempting to categorize the studies across these factors, the researchers decided whether they showed a positive or mixed positive relationship, an inconclusive one or a negative or mixed negative one.  Positive meant that higher quality was associated with higher cost, negative meant that higher quality was associated with lower cost.  Twenty-one studies had a positive association, 18 a negative one and 22 showed no difference, or mixed results across measures.  Most of the studies had a modest magnitude of effect, if there was one at all.  Analyses at a hospital level were more likely to show a positive effect and those on an area level, a negative one.  So the overall conclusion is that there is inconclusive evidence of either the direction or magnitude of any relationship between cost and quality.  Sounds about right, since there are almost certainly some low cost providers who render very good care and some who render poor care; and there are just as certainly some high-cost providers with good quality results and some with poor quality.

Leave a comment