More Evidence on Priceless
We examined both quality and actual medical costs for episodes of care provided by nearly 250,000 U.S. physicians serving commercially insured patients nationwide. Overall, episode costs for a set of major medical procedures varied about 2.5-fold, and for a selected set of common chronic conditions, episode costs varied about 15-fold…there was essentially no correlation between average episode costs and measured quality across markets.
Full piece at the Health Affairs Blog (gated.)
This is evidence that the market isn’t working properly, right? If it was would we would see a direct correlation between quality and cost?
Have to agree, Alex. Subsidies, price controls, and poor competition in vertical markets result in shenanigans like this.
“The overall analysis suggests that changing incentives through payment reforms could help to improve performance, but providers are at different stages of readiness for such reforms and thus will often need support in order to succeed.”
So they identified the broad strokes of reform, but details are still the devil.
Something is way off if there is “essentially no correlation between average episode costs and measured quality across markets.” This disequilibrium and lack of consistency are the result of an inefficient system.