Cal-OSHA cost-saving report stirs controversy
April 1, 1999 5 minutes read
Cal-OSHA cost-saving report stirs controversy
ICP challenges figures reported to other states
A report projecting that the health care industry in California will save more than $100 million annually under a new law requiring needle safety devices is "severely flawed" and underestimates the cost of the transition, according to an infection control professional who reviewed the report for state hospital officials.
Health care facilities in California are in the process of evaluating and implementing needle-safety devices in accordance with a law passed last year that amended the state’s version of the Occupational Safety and Health Administration (OSHA) bloodborne pathogen standard. The state’s Cal-OSHA program conducted a cost/benefit analysis as part of the regulatory process to enforce the law. Extrapolating data from surveys, studies, manufacturers, and other sources, the report estimated an annual net savings to the health care industry of $105.5 million by switching to needle-safety devices. The net savings figure is based on an average of the low estimate ($40 million) and the high ($170 million).
Cal-OSHA numbers cited in other states
While cost factors are a recurrent topic of controversy in needle-safety discussions, the Cal-OSHA findings took on national significance because the projected savings in California are being cited by health care workers and union officials trying to pass similar laws in other states. (See related story, p. 45.) Marguerite Jackson, RN, PhD, CIC, FAAN, administrative director of the medical center epidemiology unit at the University of California in San Diego, reviewed the report for the California Healthcare Association and shared her comments to Cal-OSHA with Hospital Infection Control.
"[The Cal-OSHA report] makes it look like there is a net savings even with the purchase of these high-cost devices," Jackson states in the comments. "This is neither accurate nor true. In fact, the additional costs of the devices are new costs that must come from somewhere. This type of information only serves to promote the manufacturer’s high costs with little incentive for them to drive down these per-unit costs. After all, if the public can be sold on high-cost devices save money,’ then why would the manufacturers reduce the costs?"
The Cal-OSHA report bases the projections in part on "significant savings that could be realized annually from eliminating 96,000 needlestick injuries, which is an underestimate of the over 200,000 needlesticks [in California] that have been estimated by others in the health care industry. Whenever an employee is stuck by a contaminated sharp, the average total cost of immediate diagnosis and treatment to a health care worker for sharps injuries is between $2,234 and $3,832, which includes prophylaxis."
How large a role do antivirals play?
In her letter, Jackson reminded Cal-OSHA that the cost estimate per needlestick used in the report clearly includes antivirals for possible HIV exposure.
"Please note that the vast majority of injuries are not accompanied by an HIV exposure risk," she states in the letter. "Even if treatment with antivirals is initiated, it is usually discontinued as soon as source information is available. Even for those cases where source information is not available, the clinician and the injured worker, on a case-by-case basis, determine whether or not antiviral treatment is indicated. . . . Without the HIV treatment costs, the costs are for the clinic visit and for serologic testing. These costs are rarely in excess of $500 total."
In addition, most of those are "fixed" costs for personnel time and overhead, which would not be eliminated if there were fewer injuries. "The potential savings are only those of the costs attributable to the injuries (variable not fixed) and do not include the fixed costs of having personnel available to evaluate injured workers, keeping the lights on, and other administrative/ overhead costs that exist whether or not injures occur," Jackson noted.
Jackson also reminded Cal-OSHA that because most of the safety features are engaged after use, the "during use" injuries will not be prevented by the safety device. The proportion of these injuries varies by device type, but unless the needle is totally eliminated (as with needleless IV port connectors), then some injuries will continue to occur regardless of how many safety devices are used, she stated.
"We will take her concerns into account, but reasonable minds can differ on what the cost picture is," says Len Welsh, special counsel for Cal-OSHA in San Francisco. "We’ve done the best we can do with the information available. It is not an exact science."
In the report, Cal-OSHA estimated that it will cost the California health care industry an additional $104 million annually to make the transition from unprotected sharps devices to needlestick prevention devices. Additional record-keeping costs of approximately $70 million per year were estimated to meet the requirement that health care facilities keep a sharps injury log. Those costs, however, are expected to fall as the number of needlesticks decline, the agency reports. Offsetting the costs are benefits such as decreases in needlesticks, lost-time incidents, infections, and subsequent mortality with HIV, hepatitis, and other bloodborne pathogens.
Other benefits include reducing the costs of needlestick evaluation, medical consultation, prophylaxis, and long-term treatment. Additional cost savings also could result from reduced losses in productivity, catastrophic claims, and liability due to bloodborne disease.
"The one thing that was made very clear in the testimony at the hearing is the difficulty at arriving at a fair cost estimate, especially when you look only at dollars," says Welsh.
Cal-OSHA hearings have included testimony from both HIV-infected workers and those who agonized through months of follow-up testing, he adds.
"[They] had gone through a year or so of wondering whether or not they were going to seroconvert," he says. "This is one of the costs.’ We haven’t put this in our cost analysis, but this is clearly a cost that must be considered by anybody rational."
In addition to stress, diminished morale and impaired work quality are among the "hidden costs" of needlesticks, many of which are never even reported, he says.
"If you go on the numbers that are actually reported, you are going to have extremely artificially low [cost] estimates," he says.
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