Opportunities and challenges for measuring cost, quality, and clinical effectiveness in health care

Empirical studies of health care cost, productivity, and output have focused primarily on intermediate goods and services. Consumers are ultimately interested in final goods such as improved health or health-related quality of life, but health services research continues to address whether health services financing and delivery are structured in ways to maximize production of intermediate goods, regardless of the link between these services and final outcomes. Increasing rates of growth of health care cost and dissatisfaction with the quality of U.S. health care force us to reexamine how productivity and cost are analyzed so that research properly informs policy and practice. The authors examine recent changes in the U.S. health care sector that suggest the need to revise how health services research approaches analyses of cost, production, and output; consider alternative notions of final goods; and review the availability and quality of data necessary to conduct this research.