biostudies-literaturePaddock SMNIA NIH HHSAHRQ HHS1039-1045https://www.ebi.ac.uk/biostudies/studies/S-EPMC5690805biostudies-literatureUnknown55(12)<h4>Background</h4>The belief that there is inefficiency, or the potential to improve patient health at current levels of spending, is driving the push for greater value in health care. Previous studies demonstrate overuse of a narrow set of services, suggesting provider inefficiency, but existing studies neither quantify inefficiency more broadly nor assess its variation across physician organizations (POs).<h4>Data and methods</h4>We used data on quality of care and total cost of care from 129 California POs participating in a statewide value-based pay-for-performance program. We estimated a production function with quality as the output and cost as the input, using a stochastic frontier model, to develop a measure of relative efficiency for each PO. To validate the efficiency measure, wMedical careWhat Role Does Efficiency Play in Understanding the Relationship Between Cost and Quality in Physician Organizations?PMC5690805R21 HS021860R33 AG044252Paddock SMDamberg CLBurgette LAdams JLYanagihara DEscarce JJfalseWhat Role Does Efficiency Play in Understanding the Relationship Between Cost and Quality in Physician Organizations?<h4>Background</h4>The belief that there is inefficiency, or the potential to improve patient health at current levels of spending, is driving the push for greater value in health care. Previous studies demonstrate overuse of a narrow set of services, suggesting provider inefficiency, but existing studies neither quantify inefficiency more broadly nor assess its variation across physician organizations (POs).<h4>Data and methods</h4>We used data on quality of care and total cost of care from 129 California POs participating in a statewide value-based pay-for-performance program. We estimated a production function with quality as the output and cost as the input, using a stochastic frontier model, to develop a measure of relative efficiency for each PO. To validate the efficiency measure, w2017-01-01T00:00:00Z2017 Dec2025-04-04T14:03:18.994Z2019-03-27T00:09:11ZS-EPMC56908052906890510.1097/mlr.000000000000082310.1097/MLR.0000000000000823