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Quality is a most ambiguous word. It means different things to different people. It means different things to the same person at different times and in different circumstances. So quality is difficult to define and understand, and difficult to examine and evaluate. It is typically in the eye of the recipient. When it comes to service quality in the health care sector, the examination of quality would explore such areas as the effectiveness of an intervention, the appropriateness of a particular intervention and under what circumstances, and determining whether its benefits exceed its costs. Even this explanation is limited in scope. To consider an additional definition and broaden the understanding about quality, it might be described as that kind of care that is expected to maximize an inclusive measure of patient welfare, after one has taken account of the balance of expected gains and losses that attend the process of care in all its parts.

In 1984, the American Medical Association (AMA) defined high quality of care as care that consistently contributes to the improvement or maintenance of quality and/or duration of life. And in 1990, the Institute of Medicine (IOM) proposed that quality consists of the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current knowledge.

Service quality encompasses three areas: quality assessment, quality improvement, and quality assurance, where quality assessment measures the essential elements of quality of care. Quality improvement consists of a set of techniques for continuous study and improvement in the process of delivering health services and products to meet the needs and expectations of customers of those services and products. To complete this circle, quality assurance embraces the full cycle of activities and systems for maintaining the quality of patient care.

Service quality as a systemwide approach is relatively new. Only in the 1970s did it receive a publicly concerted effort by providers. Most practitioners provided care independently of how others may have accomplished that same procedure. This was particularly true of surgical interventions, and a study in Vermont demonstrated that of 10 surgical procedures performed in 13 hospitals, there was wide variation in resource input, utilization of services, and expenditures. There was also variation and uncertainty about the effectiveness of different levels and specific kinds of aggregate health services.

As the focus on quality became more intense, it was suggested that quality of care and shaping the ways in which it is measured should include concepts of structural, process, and outcome measures of quality. Structural measures considered the characteristics of the system, and included such things as the number, type, size, and location of hospitals, the number and qualifications of providers, and other system amenities. These measures are the most tangible and most easily identified, and often reveal more about access to care than about quality of care received.

Process measures considered the components of the interactions between providers and the patient and focused on the technical quality of care and interpersonal interactions that occurred between the participants. Finally, outcome measures concentrated on the patient's subsequent health status following an intervention. As one might expect from the definition, outcomes are the least tangible and often most difficult to measure. Recall again, quality is most often in the eye of the recipient of care.

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