Surgical complications reduce patients' quality of life and survival. As exhibit 11.2 shows, surgical complications also increase hospital length of stay, readmission rates, and costs. Such complications can significantly reduce profitability, especially in bundled payment, capitated, or other value-based payment environments. health gain (measured by the Oxford Hip Score) is 1.4, and the demand elasticities for readmission and mortality rates are -0.02 and -0.004 . Poor quality leads to market share losses, and this effect is likely to become larger as insurers increasingly use cost and quality data to try to steer patients to efficient, effective, safe providers (Avalere Health 2017). Discussion Questions Is there other evidence that providers profit from improving quality? What is Medicare currently doing to measure quality? Safety? Efficiency? What are private health plans currently doing to measure quality? Safety? Efficiency? What are Medicaid plans currently doing to measure quality? Safety? Efficiency? How large are the potential effects on hospital profits of Medicare's value-based payments? How large are the potential effects on physician profits of Medicare's value-based payments? How will value-based payments from private insurers affect profits? How could better quality not cost more? What is inefficiency in healthcare? How common is it