Medical Groups Can Reduce Costs by Investing in Improved Quality of Care for Patients with Diabetes

If doctors are rewarded for cost savings, does quality suffer as a result? This study shows the two are not mutually exclusive.

A major feature of many new contracts between providers and payers is shared savings programs, in which providers can earn a percentage of the savings if the cost of the care they provide is lower than the projected cost. Unless providers are also held accountable for meeting quality benchmarks, some observers fear that these programs could erode quality of care by rewarding only cost savings.

These researchers estimated the effects on Medicare expenditures of improving the quality of care for patients with diabetes. Analyzing 234 practices that provided care for 133,703 diabetic patients, they found a net savings of $51 per patient with diabetes per year for every 1-percentage-point increase in a score of the quality of care. Cholesterol testing for all versus none of a practice’s patients with diabetes, for example, was associated with a dramatic drop in avoidable hospitalizations.