The Business Case for Infection Prevention

A presentation for infection preventionists based on the cover story of the February 2011 issue of Infection Control Today

The Business Case for Infection Prevention

Key Steps in Making the Business Case
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 Market these accomplishments and demonstrate value to all stakeholders

The Business Case for Infection Prevention

Understanding the Process
It is essential to understand how to calculate the costs of healthcareassociated infections (HAIs) in your facility. APICs white paper, Dispelling the Myths: The True Cost of HealthcareAssociated Infections, by Denise Murphy, RN, BSN, MPH, CIC, and Joseph Whiting, MBA, FACHE, paved the way to a better understanding of the business case process. In the paper, Murphy and Whiting 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 Business Case for Infection Prevention

Demonstrating Return on Investment (ROI)
Return on Investment (ROI) is an analytical look backward (regression analysis) to define the cost of HAIs. Murphy and Whiting point to a recent study of 1.69 million admissions from 77 hospitals that found patients with an HAI 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. Infection preventionists should know how to seek this kind of data for their state. 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 PHC4 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 (CDC) 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.

The Business Case for Infection Prevention

Engaging Healthcare Stakeholders

The PH4C 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 Business Case for Infection Prevention

Defining Value at the Executive Level
From a fiscal perspective, healthcare institution executive, are interested in cutting costs and getting the maximum value from 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. 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 HAIs 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.

The Business Case for Infection Prevention

The Myths of HAI Costs
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 The misperception that HAIs are an expected outcome of treating an older, sicker patient population with escalating use of invasive procedures.

The Business Case for Infection Prevention

Advice From an Expert
Connie Steed, RN, MSN, CIC, director of infection prevention and control at Greenville Hospital System University Medical Center in Greenville, S.C., encourages infection preventionists not to be intimidated: "Sometimes people make it harder than it is. 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.

The Business Case for Infection Prevention

Cost Justification
Connie Steed acknowledges there is increased pressure on leadership to reduce infection rates, so now is a good time to try to increase 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."

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Single Instance

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What is the best and worst case scenario

The Business Case for Infection Prevention

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: Option 1 select a number such as 10 patients who acquired a CLABSI Option 2 select a class of HAIs for the last year (include any case where a payer 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

Denise Murphy, RN, MPH, CIC

Joseph K. Whiting, MBA, FACHE

The Business Case for Infection Prevention

Cost Justification for Program Expansion
The Society for Healthcare Epidemiology of America (SHEA) with Eli Perencevich, MD, MS, and colleagues outline a methodology that assists hospital epidemiologists in justifying and expanding their programs:
Eli N. Perencevich MD, MS

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

The Business Case for Infection Prevention

Learn the Language of Healthcare Finance
Connie Steed says it is imperative that infection preventionists speak the language of finance professionals and healthcare administrators. " People have asked me how I was able to secure so many FTEs for my infection prevention program, and I tell them it's more than just information, it's also all about how you communicate that information to your hospital leadership and how you approach key decisionmakers to get the resources and people that you need. That is a critical skill for infection preventionists; some do it well, while others have difficulties with that. Many infection preventionists don't know what return on investment is, or what attributable costs are -- the costs associated with infections -- or other terms used in healthcare economics. You must understand these terms so that when you speak with your hospital leadership, you are knowledgeable. One of the things Denise Murphy said in her paper, 'Dispelling the Myths,' is that you must have a financial expert on your side. Clearly I am not a financial expert but I have someone within my healthcare organization who is; you put that finance expert's knowledge into the ring along with my knowledge about infection prevention into the ring, and you come up with a very solid presentation. Also consider the strategy of having this finance expert present the information with you."

The Business Case for Infection Prevention

Learn the Language of Healthcare Finance
Murphy and Whiting emphasize: "The business case for pursuing perfection and eliminating HAIs is designed to identify the reasons for action and the expected benefits. The business case for quality can be defined as 'an analysis aimed at determining the economic liabilities of preventable errors to ensure that an investment in quality will bring the greatest value.' The evidence is compelling that taking action to invest in prevention can have a profound positive impact on the organizations bottom line, patients safety and satisfaction, and reputation. Whenever possible, meaningful measurements should be expressed in operational terms. The importance of forming a partnership with the finance department at the outset in the development of the business case, in which the infection prevention and control specialist and a finance partner work together to quantify the economic impact of HAIs to the organization, is key. In this case, the focus is on demonstrating that operating margins can be improved as a result of targeted actions to reduce HAIs to zero."

Denise Murphy, RN, MPH, CIC

Joseph K. Whiting, MBA, FACHE

The Business Case for Infection Prevention

References: Demonstrating Return on Investment for Infection Prevention and Control. Pa Patient Saf Advis. 2010 Sep;7(3):102-7. Murphy D and Whiting J. Dispelling the Myths: The True Cost of Healthcare-Associated Infections. APIC white paper. 2007. Perencevich EN, Stone PW, Wright SB, Carmeli Y, Fisman DN and Cosgrove SE. Raising Standards While Watching the Bottom Line: Making a Business Case for Infection Control. Infect Control Hosp Epidemiol 2007; 28:1121-1133.