Economic Evaluation of Healthcare-Associated Infections and Infection-Control and Antimicrobial-Stewardship Interventions

Eli N. Perencevich

Sara E. Cosgrove

INTRODUCTION

The recent U.S. Department of Health and Human Service’s National Action Plan to Prevent Health Care-Associated Infections (HAIs) estimated that HAIs are associated with between $28 and $33 billion dollars in preventable healthcare expenditures per year (1). Current proposed and enacted health reforms, such as accountable care organizations, value-based financial incentives, and public reporting of HAIs, provide significant financial and nonfinancial incentives for hospitals to focus resources on preventing HAIs and other conditions. Despite these incentives, hospital administrators frequently require economic justification for maintaining and expanding infection-control (IC) and antimicrobial-stewardship (AS) programs. This is a particular challenge because healthcare administrators generally view infection control programs as cost centers, as they do not generate revenue for the institution. Thus, hospital epidemiologists, infection preventionists (IPs), and AS programs need the tools to prove the worth of the surveillance and interventions that they perform for their healthcare institution. Additionally, with the increasing focus on bundled interventions to prevent infections, such as central-line-associated blood stream infections (CLA-BSI) and methicillin-resistant Staphylococcus aureus (MRSA) transmission, increasing focus will also be placed on determining which bundles and bundle components are the most effective and cost-effective.

HAIs are a significant risk to patient safety. Unfortunately, this has not opened the door to improving the resources provided to prevent HAIs. Although society would benefit from reduced HAIs, there is currently no direct reimbursement to hospitals for the purpose of IC or AS. This has led to the current situation in which hospitals must make economic decisions about funding IC and AS interventions on an individual-institutional basis. This situation also has impacted the literature such that most studies describe the hospital perspective of the impact of HAIs (90% of studies), with only 3% taking a societal perspective (2,3). As we emphasize here, it is important to complete a business cost analysis from a hospital perspective so as to inform local decisions; however, these analyses are not useful on a public health level. It has become increasingly important to justify the importance of funding IC and AS activities at a broader level through the completion of cost-effectiveness analyses from the societal perspective. For example, hospital-based vaccination programs, such as pneumococcal vaccination at discharge, would not be expected to be cost-effective from a hospital perspective since the vast majority of benefits would manifest in the community setting (4). This problem also can be seen when assessing AS programs, since benefits such as preventing Clostridium difficile infections would often appear outside the hospital setting, and would be difficult to measure (5).

This chapter will detail important concepts in economic analysis, including types of economic analyses and their strengths, the different perspectives of analyses, and placing monetary values in constant dollar terms. Then, it will describe approaches to assess the financial impact of specific HAIs and of control interventions and provide a methodology for developing a cost-effectiveness analysis at a societal level. After completing the necessary review of health economics, it will describe the basic steps needed to complete a business case analysis of a specific IC intervention for an individual institution. While we have attempted to outline important considerations regarding economic measurement of HAIs and related interventions, more detailed texts about design and analysis of economic research are available elsewhere (6,7,8). While most of the provided examples focus on infection prevention activities, similar analyses can be completed when assessing AS interventions and programs (9).

BASIC ECONOMIC CONCEPTS

This section defines important concepts regarding economic analyses, including types of cost analyses, the perspective of the analysis, and discounting and inflating costs.

TYPES OF ECONOMIC ANALYSES

There are four basic types of economic analysis used in healthcare: cost-minimization analysis, cost-effective analysis, cost-utility analysis, and cost-benefit analysis (Table 17.1). Experts have noted that the distinctions between these various forms of analysis are often blurred, yet it is important to consider what is included
and not included in each specific analysis so that informed decisions can be made (6). A review of the IC literature found that of 30 publications reporting to be economic analyses, only 8 were cost-effectiveness or cost-consequences analyses. Of note, in the IC and quality-improvement literature, there is increasing use of the term business case analysis, which is an extension of a simple cost analysis from a hospital or payer prospective that excludes dollar valuation of human life and morbidity (10,11).

TABLE 17.1 Differential Evaluations of Outcomes Among Economic Analyses

Analysis Type	Valuation of Outcomes	Formulation of Final Reported Outcome
Cost-minimization (CMA)	None	Dollars saved
Cost-effectiveness (CEA)	Natural units (e.g., infections prevented, life-years saved)	Cost per infection prevented or cost per life-year saved
Cost-utility (CUA)	Healthy years (QALYs)	Cost per QALY saved
Cost-benefit (CBA)	Monetary units	Net benefit (or loss) indollars
Business case	Monetary units	Net benefit (or loss) indollars

A detailed discussion of performing a business case analysis appears later in this chapter.

Cost-Minimization Analysis

In cost-minimization analysis, the effectiveness of two interventions or products are assumed to be the same (equal efficacy and side effects), and the analysis is aimed at determining which can be delivered least expensively (12). An example of a cost-minimization analysis in IC is the choice between two brands of nonlatex gloves. In this example, most would just choose the less expensive brand. Note that this type of analysis does not apply to the choice between a brand of latex and a brand of nonlatex gloves, because these can be associated with different levels of healthcare worker (HCW) satisfaction and also allergic side effects.

Cost-Effectiveness Analysis

In contrast to cost-minimization, cost-effectiveness analysis compares interventions or products that have different costs and different effectiveness. If a specific new intervention costs more and is less effective or alternatively costs less and is more effective than an existing intervention, the choice is easy. However, if a new intervention delivers more at increased cost, which occurs frequently in the setting of rapid technologic intervention, the choice often is difficult. In cost-effectiveness analysis, the benefits of an intervention are measured in the most natural unit of comparison, such as lives saved or infections prevented (6). Programs then are compared in terms of dollars per life-year gained or dollars per infection prevented.

Cost-Utility Analysis

Cost-utility analysis is very similar to cost-effectiveness analysis except that benefits of a specific intervention are adjusted by health preference scores or are utility weighted (6). Thus, programs are compared in terms of quality-adjusted life-years (QALYs) gained. The rationale of this approach is that it allows the incorporation of health-related quality of life (HRQOL) factors, such as disability or side effects associated with the condition being treated or the treatment side effects. For instance, a year spent in an intensive care unit (ICU) discharge would be valued differently from a year spent completely healthy. One estimate is that a year after discharge from an ICU for respiratory failure is associated with an HRQOL of 0.68, such that for every predicted year of life expectancy, QALYs are increased by only 0.68 (13). A good example of a cost-utility analysis (and a cost-effectiveness analysis) in the IC literature is one that studied the use of vancomycin as perioperative prophylaxis during coronary-artery bypass graft surgery (14).

Cost-Benefit Analysis

Cost-benefit analysis is a different form of economic evaluation in that all aspects of the analysis, including the consequences of the intervention, are valued in monetary or dollar terms. If an intervention’s benefits measured in dollars exceed its costs, then it is considered worthwhile (7). The major impediment to the use of cost-benefit analysis in healthcare is the requirement to value human life or health benefits in monetary units, such as a human life-year equaling $200,000. Of note, most economic analyses of IC interventions that claim to be cost-benefit analyses are mislabeled because they do not include a dollar value for the important outcomes of interest (e.g., they do not place a dollar value on a human life or quality of life, and do not include dollars saved from saving a life or improving quality of life in the analysis).

Which Type of Analysis Is Preferred?

Cost-effectiveness analysis and the closely related cost-utility analysis have emerged as the preferred methods for economic evaluation in healthcare (7,11). Importantly, it is recommended to compare new interventions to a reference case whenever possible, using standard units such as cost per lives saved or QALYs saved (7). If an agency wanted to choose between funding a hand-hygiene promotion initiative and a cancer-screening program, it would be difficult to compare cost per infection prevented with cost per cancer detected. However, if the comparison was cost per life-years saved or cost per QALY saved with each program, an informed decision could be reached.

What Is Considered Cost-Effective?

A standard threshold for calling a program cost-effective is for the intervention to cost less than $50,000/QALY saved; however, some suggest the threshold has increased to $100,000/QALY
saved (15). The World Health Organization recommends that a threshold for calling an intervention cost-effective be three times the country’s gross domestic product per capita, so this threshold is $119,849 in the United States (16). Frequently, but incorrectly, researchers will state only that an IC intervention is cost-effective or cost-beneficial, if it is cost saving from a hospital perspective. Most healthcare interventions are not cost saving. A review of all cost-effectiveness analyses published between 1976 and 2002 found only 130/1,433 (9%) cost-effectiveness ratios actually saved costs, meaning that they saved lives and money at the same time (17).

PERSPECTIVE

The economic impact of HAIs and interventions can be assessed from the perspective of society, the hospital, a third-party payer (e.g., a health maintenance organization or the Centers for Medicare and Medicaid Services [CMS]), a government agency (e.g., the Veterans Health Administration [VHA]), or the patient. Studies that examine one perspective can underestimate the full economic effect of an infection or intervention; thus, it is important to recognize the perspective of a study to appropriately interpret its results and to design a study from the perspective of interest (Table 17.2). For instance, outpatient physician visits to treat a surgical site infection (SSI) would be important to include in an analysis for the CMS, but would not be included in a typical acute care hospital cost analysis.

The societal perspective is one that incorporates all costs and all health outcomes, regardless of who incurs the costs and who obtains the benefit (7). Typically, except in instances when a specific organization is funding the analysis, the investigator should choose the societal perspective, which is the broadest and most useful when comparing disparate medical interventions. The U.S. Panel on Cost-Effectiveness in Health and Medicine states that even when a particular analysis is requested from a nonsocietal perspective, a complete societal perspective analysis also should be completed (7). Importantly, a societal perspective analysis will inform broader comparisons of programs and could lead to more equitable distribution of resources to improve public health. It is possible that an analysis from the societal perspective would suggest a different strategy than a more limited perspective (7).

TABLE 17.2 Examples of Costs and Outcomes Included Under Several Potential Analysis Perspectives for Health Care-Associated Infection Prevention Interventions

Type of Resource	Societal Perspective	Payer Prospective	Hospital Prospective
HOSPITALIZATION COSTS
Antibiotics	X	X	X
Excess length of stay	X	X	X
Intensive care stay	X	X	X
INTERVENTION COSTS
Test costs	X		X
Gown and glove	X		X
Nurse and physician time	X		X
Isolation room	X		X
OUTPATIENT EXPENSES
Physician visits	X	X
Antibiotics	X	X
Home-health visits	X	X
Rehabilitation center stay	X	X
PATIENT EXPENSES AND OUTCOMES
Mortality	X
Morbidity	X
Infections	X
Lost wages	X
Travel expenses	X

For example, an economic analysis done from a hospital perspective would not include patient morbidity (e.g., reduced functional mobility) and outpatient drug costs (Table 17.2). Thus, a hospital might decide not to fund an SSI prevention program, because it will cost more in implementation and equipment costs than it could recoup through reduced SSI costs, such as in shortening length of stay or decreasing antimicrobial costs. However, an insurance company that must pay for additional outpatient physician visits, medications, and home-health visits attributable to the preventable SSIs might want to fund the same SSI prevention program. Of course, neither the hospital nor the insurance company perspective includes patient morbidity, mortality, and other important factors, such as the opportunity cost of lost wages. A societal perspective would include all such factors. It might be that a proper cost-effectiveness analysis of the SSI prevention program showing large cost savings and lives saved from a societal perspective would inform CMS or VHA to fund the program to the entire society’s benefit. It is likely that the continued lack of societal perspective cost-effectiveness analyses of IC interventions has facilitated the current underfunding of IC programs and the continued incidence of preventable HAIs.

PLACING MONETARY VALUES IN CONSTANT DOLLAR TERMS

Adjustment for Inflation

When data on costs used in economic analyses come from different years, they should be brought into current year values. For instance, if you wanted to include the cost of an MRSA bacteremia in a business case analysis for your hospital and you had only an estimate of the cost from 2006, you would need to inflate that amount to current year dollars. The typical method for handling these adjustments is to inflate the dollar amounts using a standard price index (e.g., the Medical Component of the Consumer Price Index) (7,18).

Discounting

It is widely accepted that in economic analyses, all future costs and future health consequences should be stated in terms of their present value (6,7). The process of converting both future dollars and health outcomes to their present value is called discounting. The U.S. Panel on Cost-Effectiveness in Health and Medicine recommends using a discount rate of both 5% and 3% (7). For example, if you assume that you will save $10,000 in preventing an MRSA infection next year by decolonizing a patient with intranasal MRSA colonization this year, using a 3% discount rate, the discounted savings would be $10,000/(1 + 0.03)ⁿ, or $9,709, where n is the number of years in the future the benefit is accrued.

MEASURING THE ECONOMIC IMPACT OF AN HAI OR INFECTION-CONTROL INTERVENTION

Measuring the economic impact of an HAI or an intervention to reduce HAIs is important for two reasons. First, these data can be valuable at the local institutional level. Obtaining data regarding the incidence and attributable cost of an HAI allows an individual institution to understand the financial burden of the HAI, and assessing the impact of an intervention is critical in determining whether it has been successful and whether extensions of the interventions should be planned. Second, results regarding costs associated with infection and cost savings associated with interventions provide raw data for use in cost-effectiveness, cost-utility, and cost-benefit analyses. This section describes the design and analysis of studies that quantify the impact of HAIs and measure the outcomes of IC interventions.

MEASURING THE ATTRIBUTABLE COST OF HAIs

Many studies that aim to define the attributable cost of HAIs have been published. Generally, these studies involve a set of patients who develop the infection of interest and a reference group who do not develop the infection. Outcomes such as attributable mortality, length of hospitalization, and costs are compared for the two groups. These studies are by definition cohort studies because the outcomes of interest (e.g., morbidity, mortality, and cost) occur after the exposure of interest (i.e., HAI). Examples of these studies include examinations of the mortality and costs associated with CLA-BSI or MRSA-SSIs (19,20). A particularly nice example of analytic methods available to estimate the costs attributable to HAIs was recently published by Roberts et al. (21).

DEFINING COSTS

Of critical importance is deciding which “costs” to measure. Potential approaches to evaluating the economic burden of HAIs within an institution include measurement of hospital costs, hospital charges, resources used, and actual reimbursed charges (22). Hospital costs include daily operating costs (sometimes called fixed costs) that do not vary based on patient volume and the cost of drugs, tests, and other patient care-related activities (sometimes called variable costs), which depend on the number of patients admitted or their length of hospitalization (23). A hospital must ensure that all of its costs are reimbursed; therefore, it assigns fees to hospital resources that are seen on a patient’s bill as charges. Insurance companies, Medicare, and Medicaid will not pay the amount on the bill because they receive discounts; therefore, the charge on the bill for all patients is greater than the actual hospital costs so as to cover these “losses” (24). Hospital costs can be a useful outcome measure for an individual hospital because they best reflect the actual economic burden of the hospital. However, while some institutions, such as the VHA (25), have implemented complex cost accounting systems that track resources used and assign costs, in most institutions costs are more difficult to retrieve (26).

In contrast, hospital charges are less reflective of actual cost, but usually are easy to retrieve from administrative databases and are consistent from patient to patient in most settings. Because hospital charges typically overestimate actual cost by 25% to 67%, adjustment using cost-to-charge ratios can be performed (26,27). Both hospital and departmental cost-to-charge ratios are determined annually based on data submitted to the CMS. Hospital cost-to-charge ratios may be a more accurate measure of costs for a cohort of patients in multiple diagnosis-related groups (DRG) while departmental cost-to-charge ratios may be more accurate for a cohort of patients in the same DRG (26,28,29).

Direct measurement of resource utilization through the use of micro-costing assesses specifically what services or procedures are used by a patient. However, for comparative purposes, use of resources must be translated into monetary value by multiplying the number of tests by their cost or charge. It is important to note that physician professional fees and costs to the patient in the form of lost work are not captured when assessing only hospital costs or charges. In addition, economic measures of health care are not necessarily set by a market-based pricing system. The costs of care for a specific patient are artificial and arbitrary computations that may vary between sites and at different time periods.

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