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Cost and Quality Analysis

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Tiffany GrattonGrand Canyon University College of NursingEthics, Policy, and Finance in the Health Care SystemNUR 508Kris BoivinDecember 18, 2013Cost and Quality AnalysisQuality and Cost Both cost containment and quality improvement are critical topics related to healthcare. Unfortunately, the relationship between the two remains controversial and poorly understood. On one hand it is argued that increasing quality would cause an increase in cost and vice versa decreased quality if cost is reduced. On the other hand it is argued that if quality of care is improved then cost reduction would be seen in areas such as hospital readmission, complications, and decreased emergency room visits. According to Hussey and colleagues (2013) the reality is some types of health care costs are associated with high quality and others with poor quality.

There has been several cost-quality association studies conducted and majority of these studies showed no evidence that areas with higher cost had better quality or outcomes while others came to different conclusions. This topic remains highly debated despite the studies conducted due to several factors including differences in the way quality and cost are measured, level of analysis, and statistical methods used to evaluate cost and quality. Whether or not cuts in health care cost will have a negative effect on health care quality or quality improvements will help to reduce spending remains unclear and according to Hussey and colleagues (2013) there is no literature that proves either side. The fact is there is a direct relationship between health care cost and quality that can move in two different directions having both negative and positive effects on health care. The focus should be shifted to identifying utilizing the positive aspects of cost reduction and quality improvement and eliminating the negative. Public vs. Private Agencies

The Common Wealth Fund (CWF) is a private foundation with a mission “to promote a high-performing health care system for society’s most vulnerable. The major role of the foundation is to promote better health care access, quality, and efficiency for people with low income, the elderly, the uninsured, children, and minority Americans (Commonwealth Fund, 2013). One of CWF’s many program initiatives to address quality of health care while controlling cost is the program of Payment and System Reform. Through development and analysis of options, this program addresses how health care is paid for. With a goal of curbing spending growth, it focuses on incentives to improve the effectiveness and efficiency of care delivery. Program activities include examining reform options that align incentives with high quality health care, assessing the potential impact alternative payment reform options, and studying how payment reform could stimulate new models of health care delivery (Commonwealth Fund, 2013).

The Department of Health and Human Services (HHS) is the United States government’s principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. Their mission is to help provide the building blocks that Americans need to live healthy, successful lives. The HHS provides access to quality health care, help individuals find jobs, as well activities that promote health related to infectious disease and disease diagnosis. The HHS has set in place a strategic plan and priorities that includes several goals aimed at improving health care for all. Goal #1 of the strategic plan for 2010-2015 is to strengthen health care. In an attempt to strengthen health care the HHS aims its initiatives at promoting high quality, safe, and effective health care by identifying and addressing health disparities and expanding insurance coverage. According to the HHS website, one of the problems causing inefficiency and rising cost is the methods of the payment systems and the fact that they reward for input rather than form improved outcomes. They also feel more attention needs to be paid to disease prevention and containment of administrative cost. HHS encourages a system that rewards for better outcomes over one that rewards volume of service (HHS, 2011).

Hussey, P. S., Wertheimer, S., & Mehrotra, A. (2013). The Association Between Health Care Quality and Cost. Annals Of Internal Medicine, 158(1), 27-34. The Commonwealth Fund. (2013). Mission, Goals, and Strategy retrieved from http://www.commonwealthfund.org/~/media/Files/Annual%20Report/2013/Mission_goals_2012.pdf United States Department of Health and Human Services. (2011). Strategic Plan and Priorities. Retrieved from

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