Measuring variation in spending and outcomes is a critical component of reforming physician and hospital payment policy. Analysis of area and hospital variations has a storied history1 and is increasingly common in media reports.2 If higher spending does not lead to better outcomes, health care could be delivered far more cost-effectively. But if approaches to measuring costs and outcomes are flawed, reductions in spending might yield worse outcomes.
Huesch MD. Payment Policy Based on Measurement of Health Care Spending and Outcomes. JAMA. 2010;303(23):2405–2406. doi:10.1001/jama.2010.817
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