Costs vs quality in different types of primary care settings

JAMA. 1994 Dec 28;272(24):1903-8.


Objective: To determine the relationship between efficiency in use of resources and quality of care provided by physicians serving as the usual source of care for patients in a state Medicaid program.

Design: Retrospective quality-of-care review of 2024 outpatient medical records of 135 providers sampled from system-wide Medicaid claims data in Maryland.

Subjects: Providers in three types of practice settings (hospital outpatient clinic, community health center, and physician's office) were stratified into three case mix-adjusted resource use groups (high, medium, and low). A sample of patients with the diagnoses of diabetes, hypertension, asthma, well-child care, or otitis media were identified from Medicaid claims forms from visits during 1988. Case mix was controlled by the application of the ambulatory care groups, a method that characterizes populations according to their burden of morbidity.

Main outcome measures: Nurses from the local peer review organization audited medical records using explicit criteria for quality of care in several categories: evidence of impaired access, evidence of compromised technical quality, evidence of inappropriate care, outcome of care, and several generic indicators of quality. Well-adult care was assessed for patients with the adult diagnoses.

Results: Although there were some systematic differences by type of facility in some aspects of quality of care (more access problems for patients in hospital clinics and more technical quality problems for patients in office-based practice), there were no consistent differences in quality of care overall for patients in different types of settings and no consistent relationships between cost-efficiency and quality of care. However, patients in medium-cost community health centers had the best or second best scores for most of the 21 comparisons of type of quality assessed.

Conclusions: Quality of care provided for common conditions in primary care is not associated with costs generated by providers. Policies directed toward the choice of low-cost vs high-cost providers will not necessarily lead to a deterioration in the quality of care. States can both improve quality and lower costs by consistent monitoring of programs over time. The finding of generally higher quality of care for patients in medium-cost community health centers deserves further study.

Publication types

  • Comparative Study
  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Adult
  • Child
  • Community Health Centers* / economics
  • Community Health Centers* / standards
  • Diagnosis-Related Groups
  • Health Care Costs*
  • Health Services Accessibility
  • Humans
  • Maryland
  • Medicaid / economics
  • Medicaid / standards
  • Outcome and Process Assessment, Health Care
  • Outpatient Clinics, Hospital* / economics
  • Outpatient Clinics, Hospital* / standards
  • Physicians' Offices* / economics
  • Physicians' Offices* / standards
  • Primary Health Care / economics*
  • Primary Health Care / standards*
  • Quality of Health Care*
  • Retrospective Studies
  • United States