Higher quality linked to lower cost 82% of the time, Advisory Board says

Hospitals don't have to compromise quality to reduce costs, confirms an analysis from the Advisory Board.

Looking at quality and cost data for 468 individual hospitals from April 2014 to March 2017, Advisory Board found hospitals delivering high-quality care also delivered that care at a lower cost for 82 percent of diagnoses. If the average hospital was able to deliver care in line with these high-quality hospitals, the Advisory Board estimates it could save $29 million annually.

Most of the savings come not from cutting corners, but from streamlining care and reducing variation, according to the analysis.

"Eliminating this cost gap entirely is not realistic due to underlying clinical, demographic and operational differences between organizations that are difficult to fully control for within study design," said Veena Lanka, MD, senior director of research at Advisory Board, in a press release. "Closing just a quarter of the cost gap for less than 10 percent of the conditions we analyzed could net over $4 million in annual savings for a typical hospital and over $40 million for 10-hospital system — without compromising quality."

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