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Health Aff (Millwood). 2009 May-Jun;28(3):897-906. doi: 10.1377/hlthaff.28.3.897.

Measuring efficiency: the association of hospital costs and quality of care.

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  • 1Harvard School of Public Health, in Boston, Massachusetts, USA. ajha@hsph.harvard.edu


Providers with lower costs may be more efficient and, therefore, provide better care than those with higher costs. However, the relationship between risk-adjusted costs (often described as efficiency) and quality is not well understood. We examined the relationship between hospitals' risk-adjusted costs and their structural characteristics, nursing levels, quality of care, and outcomes. U.S. hospitals with low risk-adjusted costs were more likely to be for-profit, treat more Medicare patients, and employ fewer nurses. They provided modestly worse care for acute myocardial infarction and congestive heart failure but had comparable rates of risk-adjusted mortality. We found no evidence that low-cost providers provide better care.

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