Can improving quality decrease hospital costs?

PURPOSE To determine whether the concept of 'cost of quality' and the techniques used for its study in the industrial sector are also applicable to hospitals. DATA SOURCES We undertook a systematic review of the literature published since 1992 (five electronic databases and a manual search) using keywords relating to quality of health care and costs. STUDY SELECTION We selected all articles relating cost and quality, providing indicators for quality failure, determining the cost of failure, and itemizing the cost of quality. Twelve articles met these criteria (USA, nine; UK, one; Australia, one; France, one); six referred to total quality management, three to hidden costs, and three to adverse events. DATA ABSTRACTION For each article, we recorded the test hypothesis, the focus of the study and the main results on costs and quality. RESULTS OF DATA SYNTHESIS Preventing failure by applying total quality management to a variety of projects (managed care project, setting-up a standard procedure . . .) led to financial savings; quality was maintained, even enhanced. Better communication and co-ordination reduced hidden costs and also increased quality. Adverse events prolonged hospital stays by 1.74-4 days and increased costs. CONCLUSION Very few detailed articles related cost and quality and, although they all noted a positive impact of an emphasis on quality, they nevertheless had their shortcomings. Study periods were too short, the indirect aspects of costs and savings were not taken into account, economic reference values were omitted. We conclude that more precise and strict methods for quantifying costs are needed.