ABSTRACT
This chapter discusses the relationship between the costs and quality of health care and provides an overview of the associated economic issues and cost drivers. These issues are illustrated with two case studies which emphasize the cost savings associated with improved quality. Historically, the relationship between health care costs and quality has been debated. Some argue that higher costs are related directly to higher levels of quality in that more expensive care leads to better outcomes for the patient engaging in health care services. Many others also have echoed this viewpoint that higher quality can be achieved only via additional costly quality assurance programs. For example, Mango stated: “In my opinion, there are no known quality control procedures that do not impact workload or costs.” Therefore, it is useful to review briefly the relationship between costs and service delivery as a function of the types of reimbursement methodology used.
