Quality Equals Cost Reductions? Not Sure? Welcome to the Club

It's so simple, right?

Does health care quality lead to reductions in health care costs?  If your answer is "don't know," the Disease Management Care Blog welcomes you to the club.  This brave article in Managed Care Magazine (where the DMCB serves on the Editorial Advisory Board) smartly tackles the issue and summarizes just how little we really know.

Among the DMCB insights:

The definition of "quality" among regulators and policymakers is surprisingly imprecise.  As a result, the notion can be used to advance any ideology.

There is no underestimating the huge "better quality reduces costs" gamble in the Obama Administration's Affordable Care Act.  How astonishing.

If high costs don't correlate with high quality, then why would any quality correlate with any costs?

Specific interventions that simultaneously improve quality and reduce costs do exist.  Examples include 1) fewer medical errors, 2) reduced hospital readmissions, 3) less 'unnecessary' (repeat) testing, 4) reduced (over) treatments and 5) administrative efficiencies.  The DMCB would add generics, flu shots and tobacco cessation. 

Any of the big savings from the specific interventions are translated into profits by providers or insurers.  The consumer never sees lower prices or insurance premiums.

The adage, quoted by CMS Administrators and high profile medical journal editors, that "30% of the system is waste" is based on an expert estimate that appeared in an obscure 2003 report.  There are no formal studies that have actually established this as fact.