Why Is There A Quality Chasm?

Abstract

Medical care seems to obtain less value from the resources it uses than other industries do, a phenomenon not limited to the United States. I explore several reasons for this, including consumers' ignorance, the rate of technological change, the widespread use of administered pricing, the difficulty of appraising a given provider's quality, and the role of the public sector with objectives other than efficiency. Although these causes suggest that the performance of medical care may always lag behind that of other industries, greater use of information technology and improved financial incentives will help to reduce the size of the quality chasm.