Why is there a quality chasm?

Health Affairs

Volumn 21, Issue 4, 2002, Pages 13-25

  Newhouse, Joseph P ^a,b  

^a HARVARD SCHOOL OF PUBLIC HEALTH   (United States)

^b HARVARD MEDICAL SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CONSUMER; ECONOMICS; FEE; HEALTH CARE COST; HEALTH CARE DELIVERY; HEALTH CARE QUALITY; HEALTH SERVICES RESEARCH; HUMAN; MEDICAL TECHNOLOGY; ORGANIZATION AND MANAGEMENT; STANDARD; UNITED STATES;

BIOMEDICAL TECHNOLOGY; CONSUMER SATISFACTION; DELIVERY OF HEALTH CARE; EFFICIENCY, ORGANIZATIONAL; FEES AND CHARGES; HEALTH CARE COSTS; HEALTH SERVICES RESEARCH; HUMANS; QUALITY OF HEALTH CARE; UNITED STATES;

EID: 1542294242     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.21.4.13     Document Type: Article

References (14)

1. Agency problems between shareholders and management may lead management to spend potential profits as perquisites. M. Jensen and W. Meckling, "The Theory of the Firm: Managerial Incentives, Agency Costs, and Ownership Structure," Journal of Financial Economics 3, no. 4 (1976): 305-360.
2. Recently effort has gone into understanding productivity differences at the firm level. M. Baily and R. Solow, "International Productivity Comparisons Built from the Firm Level," Journal of Economic Perspectives 15, no. 3 (2001): 151-172. Economists also look at efficiencies in the context of an antitrust case involving a merger, where claimed efficiencies are often the rationale.
3. Institute of Medicine, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academy Press, 2001).
4. Ibid., and L.T. Kohn, J.M. Corrigan, and M.S. Donaldson, eds., To Err Is Human; Building a Safer Health System (Washington: National Academy Press, 2000).
5. For skeptical comments on the applicability of this approach to assessing variation in efficiency across health care providers, see J. Newhouse, "Frontier Estimation: How Useful a Tool for Health Economics?" Journal of Health Economics 13, no. 3 (1994): 317-322.
6. Center for Evaluative Clinical Sciences, Dartmouth Medical School, The Quality of Medical Care in the United States: A Report on the Medicare Program, The Dartmouth Atlas of Health Care 1999 (Chicago: AHA Press, 1999).
7. See K. McPherson et al., "Small-Area Variations in the Use of Common Surgical Services: An International Comparison of New England, England, and Norway," New England Journal of Medicine 307, no. 21 (1982): 1310-1314.
8. P. Held and M. Pauly, "Competition and Efficiency in the End Stage Renal Disease Program," Journal of Health Economics 2, no. 2 (1983): 95-118.
9. T. Hofer et al., "The Unreliability of Individual Physician 'Report Cards' for Assessing the Cost and Quality of Care of a Chronic Disease," Journal of the American Medical Association 281, no. 24 (1999): 2098-2105.
10. R. Miller and H. Luft, "Managed Care Plan Performance since 1980," Journal of the American Medical Association 271, no. 19 (1994): 1512-1519, and R. Miller and H. Luft, "Does Managed Care Lead to Better or Worse Quality of Care?" Health Affairs (Sep/Oct 1997): 7-25.
11. R. Miller and H. Luft, "Managed Care Plan Performance since 1980," Journal of the American Medical Association 271, no. 19 (1994): 1512-1519, and R. Miller and H. Luft, "Does Managed Care Lead to Better or Worse Quality of Care?" Health Affairs (Sep/Oct 1997): 7-25.
12. Group- and staff-model HMOs may have a small market share because consumers fear that the very incentives that reward them for minimizing cost for a given quality also reward them for underservice. From a societal point of view, such arrangements also offer the greatest incentives for adverse selection.
13. M. Rosenthal and J. Newhouse, "Managed Care and Efficient Rationing," Journal of Health Care Finance (forthcoming).
14. U.E. Reinhardt, "Health Manpower Forecasting: The Case of Physician Supply," in Health Services Research, ed. E. Ginzberg (Cambridge, Mass.: Harvard University Press, 1991.