The Relationship between the Cost and Quality of Hospital Care: A Review of the Literature

Fleming, Steven T.

doi:10.1177/107755879004700405

Cited by 18 publications

(10 citation statements)

References 7 publications

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“…5,21 Fewer studies have examined the empirical relationship between costs and quality of care. [22][23][24][25][26][27][28] These studies shed light on whether higher costs are, on average, associated with better quality of care and whether hospitals' efforts to reduce costs may have adverse effects on quality. In each of these studies, the measures of quality and costs are averaged across patients within each hospital, which precludes consideration of the relationship between costs and quality for specific hospitals.…”

Section: The Correlation Between Outcomes and Costsmentioning

confidence: 99%

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Street

Gutacker

Bojke

et al. 2014

Health Services and Delivery Research

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BackgroundIt is important that NHS resources are used to their full extent, but efforts to reduce costs may have an adverse effect on patient outcomes. Our research is designed to provide a better understanding of the inter-relationship between costs and health outcomes among NHS providers (hospitals) for common surgical procedures.ObjectivesIn England, patient-reported outcomes measures (PROMs) are collected from patients undergoing one of four elective procedures: unilateral hip replacement, unilateral knee replacement, groin hernia repair and varicose vein surgery. We identify variation in patient-reported outcomes (PROs) across hospitals, assess the relationship between the cost and outcomes among NHS hospitals for these procedures, and determine the extent to which variations in outcomes and costs are due to differences in hospital performance.Data sourcesWe link Hospital Episode Statistics (HES) data with reference cost data and PROM data for patients having the four treatments between April 2009 and March 2010.MethodsThe first part of the empirical analysis focuses on variation in different dimensions of self-reported health status. We argue that each of the EuroQol-5D questionnaire (EQ-5D; European Quality of Life-5 Dimensions) dimensions should be assessed separately. Our graphical summary of the differential impact that hospitals have on PROs indicates the probability of reporting a given health outcome and shows how these probabilities vary across EQ–5D dimensions and hospitals. The second part of the empirical analysis focuses on the performance of hospitals and the inter-relationship between PROs and resource use.ResultsWe find that poorer post-treatment health status is associated with lower initial health status, higher weighted Charlson score, more diagnoses and lower socioeconomic status. We find significantly unexplained variation among hospitals in outcomes for patients undergoing hip replacement, knee replacement or varicose vein surgery, but not for hernia patients. For all four treatments we find significant unexplained variation in resource use among hospitals, whether measured by cost of treatment or length of stay. This suggests that hospitals can improve their utilisation of resources.LimitationsOur analyses are based on the HES. If data are missing from the medical record, or extracted and coded inaccurately, HES will contain errors. Hospitals should minimise these errors. Our study suffers from a large number of missing data, mainly because some hospitals were better than others at administering the baseline survey.ConclusionsThere is no general evidence that hospitals with lower resource use have worse health outcomes. There is a significant positive correlation for varicose veins, but this is sensitive to the choice of resource use and PRO measures. For hip and knee replacement the correlation is either insignificant or negative (depending on the resource use and PRO measures), implying that promoting health outcomes and controlling costs are not contradictory objectives. Indeed, we are able to identify hospitals with better than expected outcomes where resource use is below average. Future research should address how to handle missing data, evaluate hospital performance within the broader health economy, communicate PROMs to prospective patients, evaluate the impact of PROMs on patient choice and provider behaviour and evaluate PROMs for people with chronic conditions.FundingThe National Institute for Health Research Health Service and Delivery Research programme.

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Section: The Correlation Between Outcomes and Costsmentioning

confidence: 99%

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Street

Gutacker

Bojke

et al. 2014

Health Services and Delivery Research

View full text Add to dashboard Cite

show abstract

“…Quality was measured as perceptions by patients, community residents and hospital employees responding to surveys. Empirical studies on the relationship between cost and quality are inconclusive (Fleming, 1990). The lack of consistency in defining which costs and what aspect of quality is being examined contributes to the lack of conclusive results in the empirical literature (Scott and Flood, 1984).…”

Section: Quality Programsmentioning

confidence: 99%

“…Much effort is being directed toward quality programs in health care (see Table 1), yet opportunities abound in areas such as quality improvement programs. There is still no consensus on the relationship between quality and costs/profits based on empirical research (Fleming, 1990). While more prescriptive articles are necessary on quality implementation and integration with strategy, initial efforts are needed in empirical research for theory development.…”

Section: Quality Programsmentioning

confidence: 99%

The operations management role in hospital strategic planning

Butler

Leong

Everett

1996

J of Ops Management

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Although there is a wealth of research on operations management and strategic planning in hospitals, there has been little if any research on the integration of these two issues. Hospital administrators are being pressured to improve the quality of services and to curb costs -two primary themes within the field of operations management. This leads us to wonder to what extent operations are considered within the strategic planning process and what impact it may have. By surveying the literature, we identify a pattern in hospital management research, and identify articles which address the operations capabilities of quality, flexibility, delivery and cost control. These articles can serve as a springboard for research in hospital operations strategy, an area that is largely neglected in the literature. We also provide examples of how hospitals are addressing operations capabilities, and conclude with implications for hospital administrators and a research agenda for re searchers.issues of hospitals (Smith-Daniels et al., 1988;Pierskalla and Wilson, 1989;Siferd and Benton, 1992), operational issues have yet to be linked to the broader issues of business strategy. Most of the operations oriented articles focus narrowly on issues of hospital and health care operations such as cost containment, capacity planning or personnel scheduling. We argue, however, that operations encompass a much broader range of decisions than those currently found in the literature, and are a significant factor in health care strategic planning and management.Research on operations strategy in the service sector is relatively new (McLaughlin et al., 1991;Roth and van der Velde, 1991), and it has yet to greatly influence hospital strategic planning. In one notable exception, Roth (1993) discussed her re-0272-6963/96/$15.00

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“…Alternatively, this result may reflect inadequate controls for patient acuity using standard severity adjustments. Fleming [27] found that cost and quality increased together in low cost hospitals but there was a negative costquality relationship for mid to high cost hospitals.…”

Section: Introductionmentioning

confidence: 99%

Is more better? An analysis of hospital outcomes and efficiency with a DEA model of output congestion

Clément

Valdmanis²,

Bazzoli

et al. 2007

Health Care Manage Sci

103

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This paper applies a new methodology to the study of hospital efficiency and quality of care. Using a data set of hospitals from several states, we jointly evaluate desirable hospital patient care output (e.g., patient stays) and the simultaneous undesirable output (e.g., risk-adjusted patient mortality) that occurs. With a DEA based approach under two different sets of assumptions, we are able to include multiple quality indicators as outputs. The results show that lower technical efficiency is associated with poorer risk-adjusted quality outcomes in the study hospitals. They are consistent with other studies linking poor quality outcomes to higher cost.

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The Relationship between the Cost and Quality of Hospital Care: A Review of the Literature

Cited by 18 publications

References 7 publications

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data

The operations management role in hospital strategic planning

Is more better? An analysis of hospital outcomes and efficiency with a DEA model of output congestion

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