Cover: The Association Between Health Care Quality and Cost

The Association Between Health Care Quality and Cost

A Systematic Review

Published In: Annals of Internal Medicine, v. 158, no. 1, Jan. 2013, p. 27-34

Posted on on January 01, 2013

by Peter S. Hussey, Samuel Wertheimer, Ateev Mehrotra

Research Question

  1. What is the relationship between health care quality and costs?

BACKGROUND: Although there is broad policy consensus that both cost containment and quality improvement are critical, the association between costs and quality is poorly understood. PURPOSE: To systematically review evidence of the association between health care quality and cost. DATA SOURCES: Electronic literature search of PubMed, EconLit, and EMBASE databases for U.S.-based studies published between 1990 and 2012. STUDY SELECTION: Title, abstract, and full-text review to identify relevant studies. DATA EXTRACTION: Two reviewers independently abstracted data with differences reconciled by consensus. Studies were categorized by level of analysis, type of quality measure, type of cost measure, and method of addressing confounders. DATA SYNTHESIS: Of 61 included studies, 21 (34%) reported a positive or mixed-positive association (higher cost associated with higher quality); 18 (30%) reported a negative or mixed-negative association; and 22 (36%) reported no difference, an imprecise or indeterminate association, or a mixed association. The associations were of low to moderate clinical significance in many studies. Of 9 studies using instrumental variables analysis to address confounding by unobserved patient health status, 7 (78%) reported a positive association, but other characteristics of these studies may have affected their findings. LIMITATIONS: Studies used widely heterogeneous methods and measures. The review is limited by the quality of underlying studies. CONCLUSION: Evidence of the direction of association between health care cost and quality is inconsistent. Most studies have found that the association between cost and quality is small to moderate, regardless of whether the direction is positive or negative. Future studies should focus on what types of spending are most effective in improving quality and what types of spending represent waste.

Key Findings

Of 61 studies reviewed, 21 found that higher cost was associated with higher quality.

  • Eighteen found that higher cost was associated with lower quality or that the relationship was mixed.
  • Twenty-two found no significant association or an indeterminate association between cost and quality.

In many studies, the associations had only low to moderate clinical significance.

The designs of the studies reviewed were generally too simple to capture the complexity of the cost-quality relationship.


  • Future research should focus on what types of spending are most effective in improving quality and what types of spending represent waste.

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