The "New Economics" of Clinical Quality Improvement: The Case of Community-Acquired Pneumonia‪.‬

EXECUTIVE SUMMARY Hospitals and health systems have developed substantial infrastructure, at significant expense, to improve care quality and support the collection and distribution of quality metrics. Yet providers often have little understanding of what return, if any, they have earned on the investment because they typically view quality improvement efforts simply as a cost of doing business. After analyzing data from 10,512 patients with community-acquired pneumonia, we found that better performance on two quality measures was associated with shorter length of stay and improved financial performance. For example, a one-day decrease in the time until patients were shifted from intravenous to oral antibiotics was associated with a 0.8-day reduction in length of stay and a nearly 60 percent increase in margins. Providers can adapt the methods we used to derive these findings to identify other quality metrics that simultaneously increase care quality and generate economic value. To derive maximum clinical and financial benefit, however, providers must ensure that clinical quality staff members are adequately supported and skilled to set priorities and to implement effective initiatives.