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PERSPECTIVE
Developing a business case for quality will require a deliberate approach, with all economic parties at the table.
WORKING MARKETS naturally reward quality. In health care, mostly because of price-insensitivity and imperfect information, rewarding quality is more frequently unnatural. Molly Joel Coye makes the compelling argument that the absence of rewards for quality has slowed its adoption as an operating strategy. Her focus is just right: Those who directly treat the chronically ill and create the most value should get the most reward. But there is reason to be cautious. New ideas in health care have a tendency to oversimplify and overpromise. Whether it be managed care, continuous quality improvement, or defined contribution, proponents seem to subscribe to the "domino theory" of health policy: that is, if only this one new idea could be applied appropriately, the great stack of complicated issues in health care would fall into place, one by one. In fact, we need to begin applying a different theory, originally enunciated by someone with considerable experience in policy change: Abraham Lincoln. He said, "If I had eight hours to chop down a tree, I'd spend the first six sharpening the axe." Here I take a first step in sharpening the "business case for quality" axe, by examining the following questions: Whose business case are we talking about; what do we mean by rewards; and who is going to pay?
* Business case for whom? Quality improvements in health care have different financial implications for the parties involved, which in turn differ by payment methodology. Using Mark Chassin and colleagues' definitions, in a fee-for-service environment employers and plans have a positive business case when overuse is reduced, but providers have a negative one.1 When underuse improves, providers increase revenues, but payers increase...