Healthcare Quality Costs Too Much

In the last post, I mentioned the cost of a denial as $25 and that it is a waste time and money in your medical practice. If we really look at the idea, we should understand that to meet a healthcare quality standard, there is a cost associated.


There are four cost of quality categories to understand:

Appraisal costs: 

• These costs relate to audit and reviews of the processes in place. 
• These can be a waste, e.g., reviewing every encounter every time for every provider, even a simple 99213! Review yes, but every time NO! Identify the patterns of errors, use those as teachable moments, stop reviewing every transaction, and set up a random audit pattern later. 

Prevention costs: 

• These costs associate with training, new equipment, supplies, etc. 
• The goal here is to spend money preventing defects from occurring. These might include spell check, changing from carpet to a non-slip tile floor 

Internal failure costs: 

• These costs are what we did wrong 
• These include the demographic errors in claims submission, discussed in the prior post, wrong prescription, non-documentation of what was done 

External failure costs: 

• These costs are associated with an activity outside of the practice. 
• These might include an insurance company asking for additional information on a claim that we know is unnecessary, wrong supplies sent, back orders on supplies 

This is not to say that any of these costs are bad or good. The point is to have you recognize that there are costs associated with providing quality service to your patients.

The next time you think about cutting costs, don’t just say cut overtime, instead think about areas where there is waste, where you can re-focus the staff efforts, track where errors occur and work to fix them. If we accept the 25% of your workday is wasted premise we can find areas where costs are expended unnecessarily.

It is these costs, changing how things are done that can and will make a difference