Examines the interrelationship and tradeoff between quality assurance and cost control in ambulatory care. The author highlights the policy questions that must be addressed in deciding how to improve health and what levels of resource commitment are needed. Issues discussed: (1) the marginal benefit to health produced by additional investments in ambulatory care; (2) changes in the structural characteristics of the medical care system to improve quality; (3) the need for improved physician performance; and (4) the cost of quality assurance activities and how it can be kept in bounds by physicians who know the major problems in the delivery of care in the environments in which they practice. Physicians are urged to be prepared to participate in these larger policy issues so that the direction taken by quality assurance and cost control activities will benefit from their expertise.
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