Costs of Quality Improvement: A Survey of Four Acute Care Hospitals

In the past few decades, improving quality and safety has become an imperative for hospitals in the United States and elsewhere. Yet, little is known about the total costs of these efforts or what proportion of gross revenues is spent on quality- and safety-related activities. A study was conducted to quantify the total costs of building and maintaining the systemwide infrastructure that supports inpatient quality and safety. In 2007, a survey was administered in person to the chief medical officers and associated staff of four urban, nonprofit, acute care teaching hospitals within a health care system in the Northeast. Core inpatient quality improvement (QI) activities were composed of eight categories: information systems, patient safety, collecting and reporting quality metrics for local and national organizations, improving patient flow, staff incentives and education, patient satisfaction, leadership efforts focused on QI, and miscellaneous. Total reported costs for inpatient QI ranged from $2 million to $21 million. Relative costs varied from $200 to $400 per discharge (1%–2% of total operating revenue). Hospitals demonstrated great variability in how they allocated funds between specific activities such as patient safety projects ($10 to $80 per discharge), computerized provider order entry ($20 to $140 per discharge), and collecting and reporting quality metrics for national organizations ($30 to $80 per discharge). Total QI costs are challenging to define and are still small compared with total hospital operating revenue. The demand for resources for inpatient QI is likely to increase as the proposed number of metrics tracked by multiple regulatory and accreditation agencies continues to grow, coordination between agencies remains limited, and public demands for transparency increase.