Management, cost, and quality of acute inpatient psychiatric services.

A common objective of health services is to provide high quality care at the least cost, yet some services achieve these objectives better than others. Moreover, there are questions about relationships between cost and quality: do higher expenditures usually result in higher quality, or, conversely, is it possible to provide higher quality of care at expenditure levels that may be lower than other institutions? This paper reports on a study of 13 acute inpatient psychiatric units in which a range of quality and direct cost outcomes was found. Some units had higher quality and lower direct costs than the others. Some had higher quality and higher direct cost, some had lower direct costs and lower quality as well, while another group had lower quality and higher direct costs. Differences in costs and quality were found to be related more to management than to patient, staff, environmental, or institutional characteristics of these units. The findings of this study suggest that proactive management that focuses on organizational outcomes, that makes consequences of operation visible, and that promotes mutual coordination will achieve higher quality and efficient performance.