Time is right to make 'business case' for IC
January 1, 2008 5 minutes read
Time is right to make 'business case' for IC
Decreasing LOS may be a good approach
All the planets appear to be lining up to make a persuasive "business case" for infection control. In addition to slated federal reimbursement cutbacks, awareness and activism from consumers, patients and legislators have increased exponentially. The unprecedented level of activity and concern about health care-associated infections should have administrators and hospital boards eager to listen and support infection control efforts to solve the problem.
"I think the administrators and hospital boards are very aware of all that," says Eli N. Perencevich, MD, MS, an associate professor of epidemiology and preventive medicine at the University of Maryland School of Medicine in Baltimore, "Now is a unique time. The more we work with them now, the better off we will be in the long run."
Still, infection control professionals may wonder why it's necessary to make the business case for infection prevention, to convince administrators they will save money by funding efforts that ultimately save lives. Moreover, when such business cases are made the findings are often framed in terms of "cost savings" to the facility; as if it wouldn't have been worth it if they had to pay to prevent infections.
Perencevich addresses this issue in a recently published paper, which has been issued as a guideline by the Society for Healthcare Epidemiology of America. (SHEA)1 "Because U.S. national health expenditures were estimated to be $2.08 trillion in 2006, or 16% of the gross domestic product, there is no inherent reason that infection control interventions must save society money," he wrote. "Ideally, society should be willing to spend money to prevent either a myocardial infarction or a surgical-site infection."
ICPs and health care epidemiologists often fall into this mindset when they present their research, he notes. "They only say it is cost-effective if it is cost-saving," Perencevich tells Hospital Infection Control. "We feel like this is because they believe it is only effective if it is cost-saving. If you believe it and you talk that way, then we will never get people to realize that they actually can pay money to prevent [infections]. We are willing to spend $40,000 on a kidney transplant but not willing to spend $10 to prevent that person from getting an infection."
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 health care institutions to make economic decisions about funding infection control activities, he notes in the paper. Therefore, demonstrating value to administrators is an increasingly important function of ICPs and hospital epidemiologist because health care executives are faced with many demands and shrinking budgets, he concedes.
Show attributable costs
While making the business case, it's important not to overstate the benefit by simply saying preventing infection "Y" will save the hospital "X" dollars. From the hospital's financial perspective, a certain percentage of these costs currently are reimbursed by third-party payers, Perencevich reminds. Therefore, the emphasis in a business-case analysis should be on the attributable costs and attributable complications. An attributable cost or complication is one that would not have occurred during a hospital stay that is identical to the one being analyzed except for the complication or infection of interest, he points out in the guideline.
"If you are going to make a business case for say, eliminating catheter-related bloodstream infections (CR-BSI) [by saying] it will save the hospital such-and-such amount of money, [remember] the only money that it will save is directly related to the CR-BSI that you prevent," he says. "You should look at attributable costs, which are only a portion of the whole hospitals costs. We should be careful about only looking at the costs associated with the actual infection."
Another business case approach that may be easier to prove is focusing on fixed costs instead on cost savings. Researchers have shown that one of the best ways to justify an infection prevention program is to show increased hospital profits via reductions in lengths of stay.2 For example, say an ICP could show that an effort to reduce surgical site infections decreased overall length of stay in the hospital by 234 days. If the mean length of stay in the hospital is four days, then 59 new patients could be admitted, he notes.
"I think it's easier to convince hospital administration if you can show what you are doing will decrease length of stay — that the [hospital] can admit more patients to those same beds," he says. "It's basically increasing the utilization of the fixed costs as a way to show a benefit. A lot of people don't have access to cost accounting systems to determine the cost of infections, but everyone has length of stay [data]."
Communicating with administration and finding out the best way to justify your program is the key, he says. "They are on your side," Perencevich says. "You realize there aren't infinite dollars for anything let alone infection control. But given a fixed amount of dollars you want to spend them the best way you can. You want to work with them to develop the best practices and strategies for your unique institution to decrease infection and improve quality."
Nine key steps
The SHEA guideline on making a business case for infection prevention lists the following nine key steps:
Step 1: Frame the problem and develop a hypothesis about potential solutions.
Step 2: Meet with key administrators.
Step 3: Determine the annual cost.
Step 4: Determine what costs can be avoided through reduced infection rates.
Step 5: Determine the costs associated with the infection of interest at your hospital.
Step 6: Calculate the financial impact.
Step 7: Include the additional financial or health benefits.
Step 8: Make the case for your business case.
Step 9: Prospectively collect cost and outcome data once the program is in effect.
References
- Perencevich, EN, Stone PW, Wright SB, et al. SHEA guideline. Raising Standards While Watching the Bottom Line: Making a Business Case for Infection Control. Infect Control Hosp Epidemiol 2007; 28:1,121-1,133.
- Ward WJ Jr., Spragens L, Smithson K. Building the business case for clinical quality. Healthc Financ Manage 2006; 60:92-98.
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