The cost of products can greatly exceed price
August 1, 1998 3 minutes read
The cost of products can greatly exceed price
By Liza G. Ovington, PhD, CWS
President
Ovington & Associates
Fort Lauderdale, FL
Prospective payment is just beginning for many home care agencies and skilled nursing facilities, and the specter of per patient caps on service and supplies may frighten some into cutting prices rather than costs. Wound management could suffer from such decisions, so this month we will focus on the cost-effectiveness of advanced wound care products.
First, let's define some terms. The term "advanced wound care products" refers to all types of semi-occlusive dressings that create or maintain a physiologically moist wound environment (e.g., films, foams, hydrogels, hydrocolloids, etc.). "Price" means what it costs you to acquire the product by the unit, the box, or the case. On the other hand, "cost" refers to both the price of the product and the price of the various resources consumed in using it. Examples of such resources include but are not limited to:
· ancillary supplies (cleansers, tapes, gloves, pain medications, etc.);
· labor costs associated with caregiver time expenditure (windshield time, dressing change time, etc.);
· costs associated with length of stay in the health care setting;
· the cost to the patient in terms of lost workdays.
Cost-effectiveness means cost relative to the desired outcome or cost per unit of effectiveness. Finally, the desired outcome may be any number of endpoints, such as wound healing, pain relief, debridement, increased quality of life/ability to function, or reduced frequency of infection.
An illustration of a cost-effectiveness comparison between two types of products follows.
A 1994 Scandinavian study by Ohlsson et al. compared the use of saline-moistened gauze to a hydrocolloid as a dressing for venous ulcers (both under compression wraps) in 30 patients. At the end of the treatment period, the gauze-treated ulcers had decreased in area by 19%. The hydrocolloid-treated ulcers had decreased in area by 51%. The mean costs associated with using the gauze were $536 per patient, whereas those associated with using the hydrocolloid were $203 per patient. Based on costs alone, the hydrocolloid was more than 2.6 times less expensive to use than the saline-moistened gauze, even though gauze is much less expensive per unit than hydrocolloid.
Now take this same case and consider cost-effectiveness, or the cost per unit of effectiveness to see an even greater benefit. In this case, the unit of effectiveness was measured as a percentage reduction in wound area. So for gauze, it cost $536 to achieve a 19% reduction in area, or $28.42 for each 1% decrease. For the hydrocolloid it cost $203 to achieve a 51% reduction in area, or $3.97 for each 1% decrease. In terms of cost-effectiveness, the hydrocolloid was over seven times less expensive to use than saline-moistened gauze!
So if your facility decides the way to cut costs is to use cheaper dressing materials, be sure to consider the longer-term effects of using products that may be less efficient. A 1996 Korean study compared the use of gauze to hydrocolloid in the treatment of hospital pressure ulcers, and found that caregivers spent 20 minutes per day changing or checking the hydrocolloid dressing, and over 10 times that amount of time changing the gauze dressings. The benefits of advanced wound dressings have been widely documented and include decreased healing time for the patient, decreased risk of infection, reduced pain, reduced scarring, and overall reduced cost of care
Conclusion: Now more than ever, it is important to select products based on how cost-effective they are rather than what their price tag reads. Many studies have documented that it can be less expensive to use a higher-priced product than a lower-priced one if it achieves the desired outcome in a shorter time frame, with less clinician time and with fewer complications.
Recommended reading
Phillips TJ. "Cost Effectiveness in Wound Care." In: Krasner D, Kane D. Chronic Wound Care. 2nd ed. Wayne, PA: Health Management Publications; 1997, pp. 369-372.
Bolton LL, van Rijswijk L, Shaffer FA. Quality wound care equals cost-effective wound care: a clinical model. Adv Wound Care 1997; 4:33-38.
Ohlsson, et al. A cost effectiveness study of leg ulcer treatment in primary care. Scand Prim Health Care 1994; 2:295-299.
Kim YC, et al. Efficacy of hydrocolloid occlusive dressing technique in decubitus ulcer treatment: a comparative study. Yonsei Med J 1996; 3:181-185.
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