This paper examines the complex relationship between cost and quality in the U.S. health care system. It begins by defining quality and identifying the many cost drivers in health care, distinguishing those related to quality from those that are not. The paper then analyzes two key agencies — the FDA and the American Nurses Association — and their respective roles in shaping health care quality and cost. It further evaluates major initiatives, including health system benchmarking, electronic medical records, and the Affordable Care Act, assessing their potential to simultaneously improve quality and reduce costs. The paper concludes by considering implications for the nursing profession.
The relationship between cost and quality in health care is not constant, but in general, higher costs are associated with the most modern equipment and drugs. However, to fully understand the connection between cost and quality, the term "quality" must first be defined, and the relevant cost drivers must be understood. There are many cost drivers in health care that are not related to quality — profits, administrative expenses, superfluous regulatory burden, information asymmetry, lack of competition, and more. Among the cost drivers that are related to quality are paying higher wages to acquire and retain the best staff, investment in equipment, facilities and supplies, information technology investments, innovation, and regulations that serve to improve quality.
Thus, while there is some correlation between cost and quality, it is not necessarily a strong correlation, and furthermore there may be instances where higher costs have nothing at all to do with quality (Fenton et al., 2012). Likewise, there can be quality improvements that have no effect — or even a negative effect — on the cost of health care.
There are a few different agencies that play a role in health care quality. The FDA is a public agency that impacts health care quality through its role as a regulator of drugs and medical devices. The FDA is responsible for the programs by which pharmaceuticals and medical devices are tested and authorized for sale in the U.S., and it has significant enforcement power. The purpose of the FDA is to ensure that drugs are screened for safety and efficacy prior to being introduced into the market, and that post-approval follow-ups confirm drugs are being used only for approved purposes. This system arose because consumers do not have the knowledge to evaluate drugs independently, and are therefore highly susceptible to fraudulent claims and other deceptive practices that existed prior to the FDA's creation (FDA, 2014).
In addition to governing quality, the FDA also influences cost. It allows monopolies on newly approved products, which increases costs, but has streamlined pathways for generic drug approvals once patents expire, which lowers costs. For better or worse, the FDA has a significant influence over the cost of health care in addition to the regulatory role it plays in quality.
A private agency that plays a role in health care quality is the American Nurses Association (ANA). The ANA is a professional organization run by nurses to reflect the interests of nurses on a number of levels. One of its mandates is to "ensure that an adequate supply of highly-skilled and well-educated nurses is available" for the nation's health care system (ANA, 2015). By fostering high standards of performance in the nursing profession, the ANA helps to ensure that the quality of health care in America remains high. The organization is essential in ensuring that nurses have a major role to play, and that the nation's nurses are capable of fulfilling that role. Unlike the FDA, the ANA does not directly affect the cost aspect of health care and is primarily focused on the issue of quality.
"Benchmarking, EMRs, and system-wide reform initiatives"
"Future nursing roles amid health care reform"
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