To determine the relationship between cost and quality in European hospitals.

Juran’s cost–quality curve served as a theoretical framework, linked to basic efficiency concepts. Based on systematic database searches, citation searches and cross-referencing, we identify 1093 empirical studies. After exclusion of studies from outside Europe (699), non-hospital settings (10 studies), lack of a cost parameter (194) or a quality parameter (27 studies), 22 studies (28 analyses) were assessed for direction of association and methodological heterogeneity.

There was evidence of positive, negative, two-directional and no association between cost and quality. We examined whether diagnosis, procedure, type of quality measure and specification of the econometric model could explain the inconsistent evidence, but no clear explanation is identified. Despite the significant policy relevance, evidence on the relationship between costs and quality is limited. The literature is characterized by substantial methodological heterogeneity and lack of explicit definitions of the chosen cost and quality parameters, the econometric model and the underlying hypothesis for the cost–quality relationship.

It has been more than 60 years since Juran introduced the idea of failure costs, which implied that the marginal costs of quality could be non-constant. It seems imperative to acknowledge this idea in future studies.