Value-Based Cost Management for Health Care: Linking Costs to Quality and Delivery.

Castaneda-Mendez K. New York, NY 10010, Quality Resources,1996, hardcover, 189 pp, $32.95.

As a result of the changing health care environment, there has been an increased focus on quality and how all health care services are delivered. This book offers a three-dimensional framework connecting quality, delivery, and costs through a value-based cost management system. The book is divided into nine chapters, each with supporting references, and includes a glossary that defines important terms identified within the text.

The first chapter uses a story illustration to address the most pressing issues in health care today. The issues are represented as a set of nine questions that senior or top management should be able to answer concerning quality within a health care organization. The senior management perspective is used by the author to provide a conceptual framework and to reinforce the importance of a quality focus by top management within an organization. The focus is clearly on delivering high-quality health care services that allow an organization to gain a competitive advantage within a particular market.

Chapter 2 examines the new philosophies needed in health care management for the 21st century. The new philosophies focus on the idea that future business and organizational success will depend on empowering, educating, and providing resources to employees so that they have an opportunity to obtain increased levels of patient satisfaction. Data on patient satisfaction are needed for continuous customer delivery focus.

Chapter 3 examines the concept that everything that is performed in health care is a process. As such, continuous patient satisfaction requires asking such important questions as "What are the current quality, delivery, and cost levels within the organization?" and "How can these levels be improved?" The belief is that processes of quality, delivery, and cost vary within an organization and can lead to potential longterm patient satisfaction problems.

The next three chapters describe activity-based costing, value-added analysis, and the cost of quality. These chapters focus on the concept that accurate estimates of costs are critical for the successful reduction of variation in quality and for health care delivery to be cost effective. Value-added analysis helps identify which activities add value to the patient, the employee, and the health care organization. Chapter 6 examines the costs associated with poor quality and delivery to patients and employees. The final chapters are dedicated to illustrating concepts and tools that can be used to reduce the costs associated with high-quality health care delivery.

The book provides a well-structured analysis of the costs associated with the measurement of quality. The author emphasizes the importance of using procedures to collect, interpret, and understand data. Once these procedures are understood, the reader has the ability to understand process variation, has an increased problem-solving capability, and will be equipped with improved mechanisms to manage cycle time.

The book is written primarily for members of senior management health care organizations. The book begins with a scenario that is used to attract the interest of an individual charged with addressing the concepts of quality from a top-down management perspective. Rehabilitation is briefly addressed in the text, and the book is not targeted toward the practicing physical therapist. No patient care issues relating to the physical therapist are covered. Directors of rehabilitation or directors of centers for quality in large health care institutions, those seeking positions in senior management, or students in master's degree programs in business administration will find the book to be beneficial in understanding the important concepts of quality as an institution-wide process. Individuals charge with top-down strategic planning or with leading a quality change effort involving several departments within a helath care organization may also find the text benefical.

Mark A Brimer, PhD, PT
Holmes Regional Medical Center
Satellite Beach, Fla