percent of its GDP on health care, which was almost 52 percent higher than the OECD mean of 7.3 percent (Schieber and Poullier, 1988).

Past efforts to control rising expenditures have taken many forms, such as price controls and Medicare’s PPS. Their effect on the quality of care is generally unknown. Most evidence to date suggests that the fears about potential impacts of Medicare PPS on quality (Lohr et al., 1985) have not been borne out (ProPAC, 1988, 1989; Kahn et al., 1989), but some signs about excessively shortened hospital stays are disturbing (Fitzgerald et al., 1987, 1988).

The interest in quality of care must be viewed in a larger social and economic context. On the one hand are the staggering reality of a federal budget deficit created during the 1980s (now conservatively estimated at over $135 billion), a growing desire to protect the 35 million persons who are uninsured for health care (most of whom are not elderly), and much discontent about numerous other components of the social fabric (housing and the homeless, education and literacy, and the pervasiveness of illegal drugs). On the other hand are the increasing need for care by a growing elderly population and the concomitant pressure to broaden the benefits within the Medicare program, as seen most recently in the debates about the Medicare Catastrophic Coverage Act of 1988 and about expanded coverage for long term care.

Germane to any discussion of health policy are the twin issues of geographic and financial access to services. Persons in need of care are forced on occasion to forgo treatment because they live in areas that are underserved by medical practitioners or otherwise face limited access to health care institutions and technologies; this is particularly evident in rural areas and inner cities. Gaps in coverage, restrictions on the use of needed services, inconsistencies in the application of reimbursement policies, and cost-sharing can all be obstacles to the receipt of appropriate levels of care.

Changes in the settings of care, such as the shift of some types of surgery to the ambulatory setting and the growth of home care, produce uncertainty about quality and continuity of care. These changes complicate quality assurance efforts because needed data systems may be lacking for these nontraditional settings. Ensuring high quality in the diagnosis and treatment of mental health problems, conditions recognized as important health issues for the elderly, is difficult because they, too, often fall outside the usual practice domains (Brook et al., 1982).