Relational Climate and Health Care Costs: Evidence From Diabetes Care

Quality of care worries and rising costs have resulted in a widespread interest in enhancing the efficiency of health care delivery. One area of increasing interest is in promoting teamwork as a way of coordinating efforts to reduce costs and improve quality, and identifying the characteristics of the work environment that support teamwork. Relational climate is a measure of the work environment that captures shared employee perceptions of teamwork, conflict resolution, and diversity acceptance. Previous research has found a positive association between relational climate and quality of care, yet its relationship with costs remains unexplored. We examined the influence of primary care relational climate on health care costs incurred by diabetic patients at the U.S. Department of Veterans Affairs between 2008 and 2012. We found that better relational climate is significantly related to lower costs. Clinics with the strongest relational climate saved $334 in outpatient costs per patient compared with facilities with the weakest score in 2010. The total outpatient cost saving if all clinics achieved the top 5% relational climate score was $20 million. Relational climate may contribute to lower costs by enhancing diabetic treatment work processes, especially in outpatient settings.