It’s pretty hard to fix a problem if you can’t define it.

Take healthcare efficiency for example.

Some years ago, a national conference was convened to reach agreement on what efficiency means in healthcare. The gathering was co-sponsored by the Agency for Healthcare Research and Quality (AHRQ) and the Employer Health Care Alliance (The Alliance).*

Their conclusions:

“We have no definition of ‘true’ efficiency.”


“It is challenging to improve efficiency without a consensus on what constitutes efficiency, how to measure it, and what actions must be taken to improve it.”

“Efficiency is a relative term…defined differently by purchasers, payers, plans, consumers and providers, all of whom have a different perspective on what constitutes quality and appropriate cost.”

The conference presenters even said that some types of healthcare efficiency — technical, productive and social — may be considered “contradictory to the values of healthcare practitioners,” who see their job as “prioritizing the needs of the individual over those of society.”

Medicare defines efficiency as “the interaction between the resources used to deliver care and the quality of care that is delivered.” In other words, are patients getting what taxpayers are paying for? Hospitals are rewarded for making sure their patients don’t cost Medicare excessive amounts, especially after discharge.

Rather than parsing the meaning of a word, perhaps we should consider the traditional definitions of the words “efficiency” and “effectiveness.”


The ability to accomplish a job with a minimum expenditure of time and effort

Ratio of work done to the energy supplied to it, usually expressed as a percentage

The degree to which something is success in producing a desired result, i.e. ‘the effectiveness of the treatment’

We should be able to agree that the first purpose of healthcare is to restore and maintain good health. If that’s the case, then many of the hundreds of measurements currently used to determine “efficiency” actually should be measuring “effectiveness.”

From a dictionary standpoint, effectiveness describes the quality of care. Efficiency describes the way that care is delivered, in other words, all the support systems which ensure the patient gets that care in the fastest, most cost effective manner possible.

Now, the reason we have dictionaries is so that we don’t have to convene a conference every time someone wants to debate what the meaning of “is” is. Yet we seem to be making a complex industry more complicated by speaking different healthcare languages. Shouldn’t the goal be to provide effective healthcare as efficiently as possible.

Automated operational management is all about getting the right patient and resources to the right place at the right time. Its impact on quality stems from its ability to make sure “effective” care is given in a timely fashion. Without timely access to care, the quality of care quickly declines.

On the surface, tying cost to outcomes makes sense. As taxpayers, we all want to know we’re getting the best care our dollars can buy. The problem is that it obscures the attack points for improving both efficiency and effectiveness.

If the whole healthcare cost spiral boils down to semantics, maybe we should convene another national conference to better discuss the distinction – efficiency in terms of care delivery and effectiveness in terms of the outcomes? Otherwise, how can we meaningfully address either?

What’s your opinion?

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*“Efficiency in Health Care: What Does it Mean? How is it measured? How can it be Used for Value-Based Purchasing?” Report of conference highlights prepared by AcademyHealth

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