Health Care Quality

Substantial variations found in spending by U.S. hospitals on quality improvement activities

American hospitals vary greatly in the amount of money they spend on improving the quality of care they provide, with some placing a lot more emphasis on quality improvement efforts than others. Given the high cost of such efforts, we can expect hospital managers to insist on evidence that quality improvement expenditures produce tangible benefits, notes Stephen S. Shortell, Ph.D., of the University of California, Berkeley.

In a study supported by the Agency for Healthcare Research and Quality (HS08523), lead author David Dranove, Ph.D., Dr. Shortell, and their colleagues calculated expenditures for continuous quality improvement (CQI) programs at 16 large nonprofit hospitals in the United States. This was part of a larger study in which these researchers correlated CQI expenditures with outcomes of patients with total hip replacement or coronary artery bypass graft (CABG) surgery.

The researchers found that expenses for CQI—including education programs, data collection, personnel, CQI meetings, outside consultants, and allocated overhead costs—ranged from roughly $300,000 to over $4.5 million annually. On average, hospitals spent $56 on quality improvement activities for each patient admitted for CABG surgery or total hip replacement. About three-fourths of this amount was for direct costs, and one-fourth was for meeting costs. Neither total costs nor meeting costs are correlated with condition-specific costs.

The eight hospitals with mature CQI programs had higher expenditures than hospitals that did not have a CQI program or had only minimal CQI training ($67 versus $47 per admission). The sample was too small to demonstrate meaningful differences in patient outcomes associated with quality improvement expenditures. Research with a larger sample could explore the relationship between expenditures on CQI initiatives and their benefits. This study provided benchmark estimates of those benefits.

See "The cost of efforts to improve quality," by Dr. Dranove, Katherine S.E. Reynolds, R.N., Robin R. Gillies, Ph.D., and others, in the October 1999 Medical Care 37(10), pp. 1084-1087.

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