Introducing quality into cost effectiveness.

Abstract

The objective of this study is to explore the problems which can arise when quality issues are introduced without proper analysis of the nature and objectives of health care. The principles of economics are used to explain why the primary output of health care should be perceived in terms of health gained (or maintained). Cost Effectiveness Analysis (CEA) is concerned with achieving a given output at lowest cost. The problems of measuring and valuing health gains, as well as problems arising when a quality dimension is introduced, are discussed with reference to the Quality Adjusted Life Year (QALY) as a measure of health gain. Quality of service provision is normally achieved at an increased cost per QALY. This need not make high quality services inefficient provided care is taken in use of terms and Cost Benefit Analysis (CBA) is used to highlight the value placed on consumer satisfaction.