Since the advent of Medicare in 1966, a major focus of federal policy and legislation has revolved around the purchase of health care. Although initial programmatic content demonstrated some concern for both cost containment and basic quality assurance, by the late 1970's congressional cost control anxiety had reached a fever pitch, culminating in a completely revamped Medicare hospital reimbursement methodology enacted in 1982, combined with a retooled utilization control mechanism in the form of the Peer Review Organization (“PRO”) program.
At the same time, in the private sector, as the cost of health care increased, major corporate purchasers of health care services became increasingly concerned about the “value” of the health care benefits they were making available to their employees. In response to perceived consumer demand, these same corporations eventually, for reasons unrelated to health care, began to incorporate quality improvement into their core manufacturing and service missions.