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Understanding HAI Burden, Demonstrating ROI Essential to Making a Business Case


By Kelly M. Pyrek

Estimates of healthcare-acquired infection in the U.S. underscore the need for a renewed focus on sustainable HAI prevention, but resources are required to uphold the viability of these programs. It is therefore necessary for infection preventionists to establish a business case for their programs and present it to their healthcare institution leadership. Murphy and Whiting (2007) define a business case as " A business case addresses at a high level the business need that the project seeks to resolve. It may include the reasons for the project, the expected business benefits, the options considered (with reasons for rejecting or carrying forward each option), and the expected costs of the project, a gap analysis and the expected risks. The option of doing nothing should be included with the costs and risks of inactivity included along with the differences (costs, risks, outcomes etc) between doing nothing and the proposed project."

In a presentation Kerkering (undated) explains that there are three reasons for making the business case for infection prevention:
- Altruism: the desire to prevent suffering and death is a necessary and laudable goal but it does not pay the bills
- Realism: Life’s circumstances do not allow you to work for free
- Pragmatism: You need the resources to carry out an effective infection control program

Kerkering emphasizes, however, that the No. 1 reason for making the business case is needing to respond to market forces in healthcare, specifically the decision by the Centers for Medicare and Medicaid Services ( CMS) not reimburse hospitals for potentially preventable events. He notes that infection prevention has now not only become necessary for the survival of the patient, but also for the survival of the facility. This is underscored by Perencevich, et al. (2007) who note, "While society would benefit from a reduced incidence of nosocomial infections, there is currently no direct reimbursement to hospitals for the purpose of infection control, which forces healthcare institutions to make economic decisions about funding infection control activities. Demonstrating value to administrators is an increasingly important function of the hospital epidemiologist because healthcare executives are faced with many demands and shrinking budgets.”

And as Leatherman, et al. (2003) explain, a business case “exists if the entity that invests in the intervention realizes a financial return on its investment in a reasonable time frame.” The reasonable return can occur through profit, reduction in losses, or cost avoidance."

As Keckering notes, the premise for the business case is as follows:
- Infection control programs are not revenue producers
- Infection control programs cost money
- The basis of an infection control business plan is to demonstrate cost efficiency; that is, an infection control program will save more money than it costs to fund the program.

In a 2010 advisory, the Pennsylvania Patient Safety Authority explained, "An important function of the hospital epidemiologist and the infec-tion preventionist (IP) is to demonstrate the value of infection prevention and control programs to healthcare executives. The most important aspect of a business case for prevention is reduction of harm and loss of life. But from a financial health perspective, boards, executives, and healthcare managers are interested in cutting costs and getting maximum value for expenditures. They may not see the benefit of new infection prevention and control programs if the return on investment is not realized within a certain time frame. An infection control business case analysis of the excess cost of HAIs and of the excessive length of stay can help gain needed resources and physician support. Practical methods are needed to engage healthcare executives in evaluating the true cost of HAIs in their organizations. Hospital leaders’ awareness that HAIs impact their patients may not always lead to understanding the extent of the financial burden of HAIs or the cost-effectiveness of infection prevention and control programs. Organizations may have inadequate methods to investigate the true cost of HAI in their institutions. Executives and clinicians in hospitals with HAI rates at or below nationally published rates may become complacent, accepting that a certain degree of patient harm from infections is an unavoidable price of caring for older, sicker patients. Common misconceptions about HAIs need to be dispelled. These misperceptions include (1) the fallacy that the incidence of HAI in most institutions is insignificant; (2) the erroneous belief that additional cost of HAIs is largely offset by reimbursement, making cost savings associated with reduction of HAIs not worth the investment, and (3) the misperception that HAIs are an expected outcome of treating an older, sicker patient population with escalating use of invasive procedures.

Economic Burden of HAIs
As the Pennsylvania Patient Safety Authority (2010) summarizes, "HAIs consume resources, prolong patients’ hospital stays, and are only partially reimbursed at best." As an example, an economic analysis of central line-associated bloodstream infections (CLABSIs) at Allegheny General Hospital in Pennsylvania from 2002 to 2005 examined hospital revenues and expenses in 54 cases of patients with CLABSIs in two intensive care units (ICUs). The average payment for a case complicated by CLABSI was $64,894, and the average expense was $91,733 with a gross margin of minus $26,839 per case and a total operating loss of nearly $1.5 million from the 54 cases. In addition to revenue loss, there are hidden costs and lost financial opportunities associated with HAIs. For example, when patients are brought back to the operating room (OR) for an incision and drainage of a postsurgical site infection, both the surgical suite and the OR team are tied up, and new cases cannot be scheduled. Primary procedures are often reimbursed at a higher rate than follow-up procedures. The 2007 Pennsylvania Health Care Cost Containment Council (PHC4) report on HAIs in Pennsylvania hospitals shows that the average charge for care grew from $35,168, with an average length of stay of 4.4 days, for cases without an HAI to $191,872 for those cases with an HAI, with an average length of stay of 19.7 days. PHC4 reported that in almost all cases, hospitals do not receive full reimbursement of charges; on average, in 2006 and 2007, hospitals statewide were paid approximately 27 percent of established charges.

The right data can be hard to come by, but researchers are addressing this. Scott (2009) outlines the misconceptions regarding the financial significance of HAIs in a report on the direct medical costs of care related to secondary infection diagnosis, increased length of stay and expensive HAI outbreaks. The report also describes additional cost components, which reflect the socioeconomic consequences of HAIs such as indirect and intangible costs of HAIs related to diminished quality of life such as permanent disability or lost wages.

The Centers for Disease Control and Prevention (CDC) reports that the cost of HAIs per patient (based on the 2007 consumer price index) ranges from approximately $20,000 to $25,000. Diagnosis-related group (DRG) based reimbursement is not increased when a patient develops an HAI, as there are no specific DRG codes available for HAIs. Hospitalized patients may be covered by Medicare and Medicaid, which in most cases reimburse fixed amounts based on diagnosis. The hospital then has to absorb the additional costs associated with HAIs, while the HAIs simultaneously prevent the hospital from taking new admissions with reimbursable conditions.  The Centers for Medicare and Medicaid Services (CMS) regulations, effective in 2008, now refuse reimbursement to hospitals for the excess costs of certain types of infections (as outlined in the HHS Action Plan to Prevent Healthcare-Associated Infections). As the Pennsylvania Patient Safety Authority notes, "The current legal and regulatory landscape has changed in a large part due to the success of hospitals across the country with HAI prevention programs. HAIs that were previously thought of as defensible are now considered to be preventable adverse events. IPs will play a larger role in protecting their hospitals against liability in the future."

A recent study in JAMA Internal Medicine has helped to better define HAI costs that infection preventionists can use in their proposals. The   study by Eyal Zimlichman, MD, MSc, of Brigham and Women's Hospital and the Harvard Medical School, Boston, and colleagues, estimates that total annual costs for five major HAIs were $9.8 billion, with surgical site infections contributing the most to overall costs. Researchers reviewed published medical literature for the years 1986 through April 2013. For HAI incidence estimates, researchers used the CDC's National Healthcare Safety Network (NHSN).

"As one of the most common sources of preventable harm, HAIs represent a major threat to patient safety," the authors note. "The purpose of this study was to generate estimates of the costs associated with the most significant and targetable HAIs."

According to the results, on a per-case basis, central line-associated bloodstream infections were found to be the most costly HAIs at $45,814, followed by ventilator-associated pneumonia at $40,144, surgical site infections at $20,785, Clostridium difficile infection at $11,285 and catheter-associated urinary tract infections at $896.

"While quality improvement initiatives have decreased HAI incidence and costs, much more remains to be done," Zimlichman, et al.  write. "As hospitals realize savings from prevention of these complications under payment reforms, they may be more likely to invest in such strate-gies."

How to Make an Effective Business Case
Perencevich, et al. (2007) and Murphy and Whiting (2007) say that a business case exists if the intervention realizes a financial return on investment through hospital profit, loss reduction, or cost avoidance in a reasonable time frame. Comparing the cost of an infection prevention and control program or intervention to the benefits—lowering rates of HAI and preventing harm and death—is the best method for justifying the investment in prevention efforts.

The Pennsylvania Patient Safety Authority (2010) emphasizes that "Possibly the greatest opportunity to demonstrate a positive return on investment in infection prevention and control is by decreasing patients’ hospital length of stay and releasing those beds to new patients, consequently increasing volume, revenue, and reimbursement. This opportunity reinforces the evidence that financial investments in infection prevention and control programs offer good value and that resources to implement best practice strategies at the bedside should be made available. In assessing the extent to which HAIs are preventable, CDC estimates that effective infection control programs could prevent up to 70 percent of infections. This can translate into potential savings nationwide of up to $31.5 billion of the $45 billion expenditures attributed to HAIs."

Making the business case for the continued viability of an infection prevention program is one of the most common strategies. The compo-nents of a high-quality infection prevention and control program, according to the Pennsylvania Patient Safety Authority (2010), include sufficient staff with time to conduct risk-adjusted surveillance; staff education; isolation and outbreak management; report review and development; employee health activities; tasks intended to meet regulatory requirements, including public reporting tasks; clinical implementation of evidence-based best practices; and process improvement activities. Program-resource needs include trained IPs, clerical support, at least a part-time epidemiologist, physician champion and clinical nurse liaison hours, supplies, data mining support, and education. The average cost for staffing that includes two IPs, one member of clerical support staff, and a part-time medical director is estimated at $300,000. According to the Pennsylvania Patient Safety Authority (2010), this cost could be financed by avoiding fewer than nine surgical-site infections (SSI), based on the CDC 2009 direct cost estimates of $34,670 per SSI. Another study of 28 U.S. hospitals estimated that the hospitals’ financial loss due to HAIs was 4.3 times greater than the amount the hospitals invested in prevention in 2005.

The Pennsylvania Patient Safety Authority (2010) explains that examples of cost savings associated with a well-resourced, quality infection control program include the expertise of an IP to eliminate supply waste through the appropriate selection of products and expensive technology, avoidance of regulatory citations and fines for lack of progress in decreasing infection rates, and enhancement of the organization’s image by minimizing the threat of outbreaks, resistant pathogens, employee injuries from bloodborne pathogens, HAI disclosures, sentinel events, and malpractice claims. Many infection prevention practices can improve quality without much of a financial investment. These include nurse-driven catheter removal protocols, proper equipment disinfection, hand hygiene, process and outcome measurement, and accountability standards for compliance.

Key to making an effective business case is understanding the point of view of your institution's leadership. As the Pennsylvania Patient Safety Authority (2010) explains, hospital administrators see infection prevention and control programs as cost centers because the costs cannot be passed onto anyone else. C-suite leadership is focused on slim profit margins, evidenced by a survey of senior hospital executives across the United States found that, despite current severe financial constraints, hospitals of all sizes are employing sophisticated budget strategies in a commitment to reduce infection rates. Surveyed hospital executives anticipate that focus on patient safety is a key component of an organization’s strategy to enhance its reputation in select specialties. Infection prevention and control was identified as one of the top five categories with the highest budget growth potential; however, the report also found that just one-third of respondents are willing to increase spending to reduce errors and infection rates. (L.E.K. Consulting, 2010)

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