In what way can performance improvement influence healthcare costs?

Performance improvement is a critical aspect in the healthcare field that can significantly influence costs through various mechanisms. The correct answer highlights that performance improvement can lead to reduced costs by optimizing processes and outcomes.

This occurs because when healthcare organizations focus on improving performance, they often streamline operations, reduce waste, and enhance the quality of care provided. For instance, by implementing process improvements, healthcare facilities can minimize unnecessary tests, decrease patient wait times, and improve patient flow, all of which contribute to more efficient resource usage. This efficiency ultimately leads to cost savings.

Moreover, better outcomes, such as fewer complications or readmissions, not only provide benefits to patient health but also reduce the financial burden associated with longer hospital stays or additional treatments. Therefore, improved quality and efficiency can directly correlate with lower costs, supporting the idea that performance improvement initiatives are a valuable investment for healthcare organizations aiming to provide better care while managing their finances effectively.