February 7, 2011
By Kelly M. Pyrek
One of the most critical skills an infection preventionist can have is the ability to construct a solid business case for infection prevention and control at his or her healthcare institution, especially in the age of dwindling resources and funding. Although the task may appear to be intimidating, at the core of this endeavor are several simple steps: use a healthcare-associated infection (HAI ) cost calculator tool to estimate the cost of infections in your facility; interpret the results of statistical models; build a customized business case and effectively present it to healthcare administrative leadership; create a compelling proposal to increase resources for infection prevention and control; and finally market these accomplishments and demonstrate value to all stakeholders.
Several years ago, the Association for Professionals in Infection Control and Epidemiology (APIC) issued a white paper, "Dispelling the Myths: The True Cost of Healthcare-Associated Infections," written by Denise Murphy, RN, BSN, MPH, CIC, and Joseph Whiting, MBA, FACHE, that paved the way to a better understanding of the business case process. In the paper they emphasize that "pursuing perfection, setting HAI reduction strategies at the theoretical ideal (zero preventable infections), represents a substantial opportunity for hospital leaders to improve safety, quality and significantly reduce cost." The APIC white paper provides solid instruction on how to calculate the costs of HAIs in your facility and suggests that once you have this data, to use this information to target an area that has significant opportunity for improvement.
A key aspect of making the business case requires data mining and gathering so that a return on investment (ROI) can be demonstrated. Nationally, HAIs) represent 4.5 infections for every 100 hospital admissions and account for an estimated 99,000 deaths in the United States annually. Murphy and Whiting point to a recent study of 1.69 million admissions from 77 hospitals that found patients with an HAI infection reduced overall net inpatient margins by $286 million or $5,018 per infected patient. The study found that the average additional incremental direct cost for patients with an HAI was $8,832. Locally, infection preventionists should know how to seek this kind of data for their state. For example, in 2007, the Pennsylvania Health Care Cost Containment Council reported hospital charges ranging from $35,168 in cases without an HAI, to $191,872 in cases with an HAI, with a difference of 15.3 days in the average length of stay. The PHCCCC notes, "Effective infection prevention and control programs demonstrate a valuable return on investment by releasing hospital resources for alternative uses and beds for new admissions. The Centers for Disease Control and Prevention estimates that the $45 billion annual direct cost of HAIs could be significantly reduced by as much as $31.5 billion with well resourced, quality infection prevention and control programs. Organizations may have inadequate methods to investigate the true cost of HAIs or the cost-effectiveness of infection prevention and control program."
The PHCCCC explains that in order to develop a compelling business case for infection prevention and control programs, infection preventionists and hospital epidemiologists must engage healthcare executives in evaluating the cost of HAIs in their organization and to dispel common misperceptions about the significance of HAIs, reimbursement, and cost savings associated with effective HAI reduction programs.
The council adds further, "An important function of the hospital epidemiologist and the infection preventionist 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 the fallacy that the incidence of HAI in most institutions is insignificant; 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 the misperception that HAIs are an expected outcome of treating an older, sicker patient population with escalating use of invasive procedures."
This may sound like a tall order, and it is, but one expert encourages infection preventionists not to be intimidated. "Sometimes people make it harder than it is," says Connie Steed, RN, MSN, CIC, director of infection prevention and control at Greenville Hospital System University Medical Center in Greenville, S.C. "I do think it’s challenging for infections preventionists to make the business case because many of them don't have the basic knowledge they need to get started, including looking at the impact of HAIs on their healthcare organization. There is a clinical impact that relates to improving outcomes by reducing morbidity and mortality, and there's also an impact related to the cost of infections, and we have been able to prove that implementation of processes can reduce the infection rate and therefore reduce the length of stay. Infection preventionists should be able to show that the cost of an infection prevention program or intervention such as a central line bundle is justified. After all, wouldn't it be nice to be able to show hospital leadership that because they did a good job of implementing a CLABSI bundle, their central line rates were reduced and they saved X number of lives and they saved X amount of dollars? Doing that underscores to facility administrators the value of the infection prevention and control program. If infection preventionists can produce those kinds of results, hospital leadership is more apt to give resources to a team or a department when they are needed."
Steed adds, "There is increased pressure on leadership to reduce infection rates, so now is a really good time to try to increase your resources. But you will need to put some numbers around that to do so. One way to do that is to focus on one specific infection and cost-out what you did or what you want to do to cost-justify it, as well as determine what is the risk of not doing anything at all. It's critical to conduct a gap analysis of your program. Before you can even establish a business case you must assess your program to see what you are doing well and what you are not doing well. Infection preventionists must do an honest and thorough assessment to know where their risks are and build from there."
Steed points to business case guru Denise Murphy's work when she was at Barnes Jewish Hospital in St. Louis: "In conducting a gap analysis on their infection control program, she looked at their infection rates, the knowledge of their infection preventionists, the levels of their expertise, the experience they had with data, etc. She identified the opportunities for their program, which included training and process improvement, and that there needed to be more resources given to infection prevention. That is a much more challenging business case to make but it can be done. The challenge for new infection preventionists when evaluating their program is that it's hard for them to do that when they are still learning what their program should include. They may not know what an infection prevention and control program should contain, and how do they know if their program is good or bad? Again, it requires analysis and assessment to see where you stand."
To calculate the economic value of reducing and eliminating HAIs in the hospital, Murphy and Whiting outline the following methodology:
1. Select one of the following options for the population to be analyzed:
a. Option 1 – select a number such as 10 patients who acquired a CLABSI
b. Option 2 – select a class of HAIs for the last year (include any case where a payor was billed for any service related to an HAI; do not include a case if the primary cause of admission was for an infection; do include readmissions for HAI)
2. Identify the actual or estimated reimbursement for each case
3. Identify the total costs associated with the case, based upon activity-based cost accounting, if available
4. Identify the costs attributable to the HAI
5. Calculate the gross margin for the case by subtracting the expenses from the reimbursement
6. Compare the gross margin for the case to the gross margin of similar cases without an HAI, matched for age, principal diagnosis and admission severity
Variations on this methodology do exist. In a guideline issued by the Society for Healthcare Epidemiology of America (SHEA), Eli Perencevich, MD, MS, and colleagues outline a methodology that assists hospital epidemiologists in justifying and expanding their programs. They describe the basic steps needed to complete a business-case analysis for an individual institution, detail important basic economic concepts, including types of economic analyses and their strengths, and describe approaches used to assess the financial impact of infection prevention, surveillance, and control interventions, and approaches used to measure the attributable costs of specific HAIs.
Perencevich, et al. (2007) outline the following steps in creating a business-case analysis:
1. Frame the problem and develop a hypothesis about potential solutions
2. Meet with key administrators
3. Determine the annual cost
4. Determine what costs can be avoided through reduced infection rates
5. Determine the costs associated with the infection of interest at your hospital
6. Calculate the financial impact
7. Include the additional financial or health benefits
8. Make the case for your business case
9. Prospectively collect cost and outcome data once the program is in effect
One of the most critical skills an infection preventionist can have is the ability to construct a solid business case for infection prevention and control at his or her healthcare institution, especially in the age of dwindling resources and funding. Although the task may appear to be intimidating, at the core of this endeavor are several simple steps: use a healthcare-associated infection (HAI ) cost calculator tool to estimate the cost of infections in your facility; interpret the results of statistical models; build a customized business case and effectively present it to healthcare administrative leadership; create a compelling proposal to increase resources for infection prevention and control; and finally market these accomplishments and demonstrate value to all stakeholders.
Several years ago, the Association for Professionals in Infection Control and Epidemiology (APIC) issued a white paper, "Dispelling the Myths: The True Cost of Healthcare-Associated Infections," written by Denise Murphy, RN, BSN, MPH, CIC, and Joseph Whiting, MBA, FACHE, that paved the way to a better understanding of the business case process. In the paper they emphasize that "pursuing perfection, setting HAI reduction strategies at the theoretical ideal (zero preventable infections), represents a substantial opportunity for hospital leaders to improve safety, quality and significantly reduce cost." The APIC white paper provides solid instruction on how to calculate the costs of HAIs in your facility and suggests that once you have this data, to use this information to target an area that has significant opportunity for improvement.
A key aspect of making the business case requires data mining and gathering so that a return on investment (ROI) can be demonstrated. Nationally, HAIs) represent 4.5 infections for every 100 hospital admissions and account for an estimated 99,000 deaths in the United States annually. Murphy and Whiting point to a recent study of 1.69 million admissions from 77 hospitals that found patients with an HAI infection reduced overall net inpatient margins by $286 million or $5,018 per infected patient. The study found that the average additional incremental direct cost for patients with an HAI was $8,832. Locally, infection preventionists should know how to seek this kind of data for their state. For example, in 2007, the Pennsylvania Health Care Cost Containment Council reported hospital charges ranging from $35,168 in cases without an HAI, to $191,872 in cases with an HAI, with a difference of 15.3 days in the average length of stay. The PHCCCC notes, "Effective infection prevention and control programs demonstrate a valuable return on investment by releasing hospital resources for alternative uses and beds for new admissions. The Centers for Disease Control and Prevention estimates that the $45 billion annual direct cost of HAIs could be significantly reduced by as much as $31.5 billion with well resourced, quality infection prevention and control programs. Organizations may have inadequate methods to investigate the true cost of HAIs or the cost-effectiveness of infection prevention and control program."
The PHCCCC explains that in order to develop a compelling business case for infection prevention and control programs, infection preventionists and hospital epidemiologists must engage healthcare executives in evaluating the cost of HAIs in their organization and to dispel common misperceptions about the significance of HAIs, reimbursement, and cost savings associated with effective HAI reduction programs.
The council adds further, "An important function of the hospital epidemiologist and the infection preventionist 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 the fallacy that the incidence of HAI in most institutions is insignificant; 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 the misperception that HAIs are an expected outcome of treating an older, sicker patient population with escalating use of invasive procedures."
This may sound like a tall order, and it is, but one expert encourages infection preventionists not to be intimidated. "Sometimes people make it harder than it is," says Connie Steed, RN, MSN, CIC, director of infection prevention and control at Greenville Hospital System University Medical Center in Greenville, S.C. "I do think it’s challenging for infections preventionists to make the business case because many of them don't have the basic knowledge they need to get started, including looking at the impact of HAIs on their healthcare organization. There is a clinical impact that relates to improving outcomes by reducing morbidity and mortality, and there's also an impact related to the cost of infections, and we have been able to prove that implementation of processes can reduce the infection rate and therefore reduce the length of stay. Infection preventionists should be able to show that the cost of an infection prevention program or intervention such as a central line bundle is justified. After all, wouldn't it be nice to be able to show hospital leadership that because they did a good job of implementing a CLABSI bundle, their central line rates were reduced and they saved X number of lives and they saved X amount of dollars? Doing that underscores to facility administrators the value of the infection prevention and control program. If infection preventionists can produce those kinds of results, hospital leadership is more apt to give resources to a team or a department when they are needed."
Steed adds, "There is increased pressure on leadership to reduce infection rates, so now is a really good time to try to increase your resources. But you will need to put some numbers around that to do so. One way to do that is to focus on one specific infection and cost-out what you did or what you want to do to cost-justify it, as well as determine what is the risk of not doing anything at all. It's critical to conduct a gap analysis of your program. Before you can even establish a business case you must assess your program to see what you are doing well and what you are not doing well. Infection preventionists must do an honest and thorough assessment to know where their risks are and build from there."
Steed points to business case guru Denise Murphy's work when she was at Barnes Jewish Hospital in St. Louis: "In conducting a gap analysis on their infection control program, she looked at their infection rates, the knowledge of their infection preventionists, the levels of their expertise, the experience they had with data, etc. She identified the opportunities for their program, which included training and process improvement, and that there needed to be more resources given to infection prevention. That is a much more challenging business case to make but it can be done. The challenge for new infection preventionists when evaluating their program is that it's hard for them to do that when they are still learning what their program should include. They may not know what an infection prevention and control program should contain, and how do they know if their program is good or bad? Again, it requires analysis and assessment to see where you stand."
To calculate the economic value of reducing and eliminating HAIs in the hospital, Murphy and Whiting outline the following methodology:
1. Select one of the following options for the population to be analyzed:
a. Option 1 – select a number such as 10 patients who acquired a CLABSI
b. Option 2 – select a class of HAIs for the last year (include any case where a payor was billed for any service related to an HAI; do not include a case if the primary cause of admission was for an infection; do include readmissions for HAI)
2. Identify the actual or estimated reimbursement for each case
3. Identify the total costs associated with the case, based upon activity-based cost accounting, if available
4. Identify the costs attributable to the HAI
5. Calculate the gross margin for the case by subtracting the expenses from the reimbursement
6. Compare the gross margin for the case to the gross margin of similar cases without an HAI, matched for age, principal diagnosis and admission severity
Variations on this methodology do exist. In a guideline issued by the Society for Healthcare Epidemiology of America (SHEA), Eli Perencevich, MD, MS, and colleagues outline a methodology that assists hospital epidemiologists in justifying and expanding their programs. They describe the basic steps needed to complete a business-case analysis for an individual institution, detail important basic economic concepts, including types of economic analyses and their strengths, and describe approaches used to assess the financial impact of infection prevention, surveillance, and control interventions, and approaches used to measure the attributable costs of specific HAIs.
Perencevich, et al. (2007) outline the following steps in creating a business-case analysis:
1. Frame the problem and develop a hypothesis about potential solutions
2. Meet with key administrators
3. Determine the annual cost
4. Determine what costs can be avoided through reduced infection rates
5. Determine the costs associated with the infection of interest at your hospital
6. Calculate the financial impact
7. Include the additional financial or health benefits
8. Make the case for your business case
9. Prospectively collect cost and outcome data once the program is in effect
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