N542 Module 5 assignment: cost-benefit analysis of a nursing intervention, a full sample

Paying to Prevent: A Cost-Benefit Analysis of a Hospital-Acquired Pressure Injury Prevention Bundle

Student Name

Master of Science in Nursing Program, Aspen University

N542: Health Care Finance and Economics

Instructor Name

Month Day, Year

Paying to Prevent: A Cost-Benefit Analysis of a Hospital-Acquired Pressure Injury Prevention Bundle

A hospital-acquired pressure injury is one of the clearest examples of harm that nursing care can prevent, and one of the clearest examples of a cost the hospital absorbs. Since 2008, Medicare has not paid hospitals more when a patient develops a stage 3 or 4 pressure injury during the stay (Padula et al., 2011), so the cost of treating it falls on the hospital. At a composite 260-bed community hospital, the wound care team counted 180 stage 2 or higher hospital-acquired pressure injuries last year among about 6,000 admissions of patients at risk, an incidence of 3%.

The chief nursing officer has asked whether a prevention bundle would pay for itself. This paper answers with a cost-benefit analysis. It defines the method, sets out the bundle and its costs, estimates the benefit from published cost data, tests how sensitive the result is to its assumptions, and explains the difference between avoided cost on paper and savings the hospital will actually see.

The Method

Cost-benefit analysis converts both the costs and the benefits of an intervention into dollars and compares them, either as a net benefit (benefits minus costs) or as a benefit-cost ratio (benefits divided by costs). A ratio above 1 means the benefits exceed the costs. Finkler et al. (2013) note that the method is most useful to managers when every assumption is stated and tested, because the answer depends heavily on estimates of how well the intervention works and what the avoided events really cost. This analysis takes the hospital's perspective over one year and counts only costs and benefits the hospital would incur or avoid; it does not place a dollar value on patients' pain or quality of life, which a societal analysis would include.

The Bundle and Its Costs

The proposed bundle combines five elements supported by prevention guidelines: prophylactic silicone foam sacral dressings for the highest-risk patients, heel suspension boots, pressure-redistribution mattress upgrades, a dedicated wound and ostomy nurse who rounds on every high-risk patient, and education for nursing staff on skin assessment and repositioning. The table shows the annual cost of each element.

Estimating the Benefit

The benefit is the cost of the injuries the bundle prevents. Two estimates are needed: how many injuries it prevents and what each one costs. For the first, this analysis assumes a 40% reduction in incidence, a moderate figure for a multicomponent program that the sensitivity analysis will test. Applied to 180 injuries, that prevents 72 a year. For the cost per injury, the Agency for Healthcare Research and Quality estimated the additional inpatient cost of a hospital-acquired pressure injury at $14,506 (Agency for Healthcare Research and Quality [AHRQ], 2017). National modeling supports the scale of the burden: Padula and Delarmente (2019) put the potential national cost of these injuries to U.S. hospitals above $26.8 billion a year, with about 59% of the cost attributable to the small share of stage 3 and 4 wounds.

Seventy-two injuries at $14,506 each gives a gross benefit of $1,044,432. Subtracting the bundle's cost of $360,300 leaves a net benefit of $684,132, and the benefit-cost ratio is 2.9. On these assumptions, every dollar spent on prevention returns almost three dollars in avoided cost. The finding is consistent with the earlier modeling of Padula et al. (2011), who found prevention cost saving compared with standard care in 99.99% of their simulations, with prevention estimated at $54.66 per patient per day.

Sensitivity Analysis

The result depends most on the effectiveness assumption. The break-even point, where benefits exactly equal costs, is reached when the bundle prevents 24.8 injuries a year, a reduction of only 13.8% from the current 180. Even if the bundle performed at one third of the assumed effect, it would still roughly break even. The cost per injury matters too. If the hospital's injuries skew toward stage 2, which are cheaper to treat than the average in the national estimate, the benefit would be lower; if a few stage 4 injuries were prevented, it would be much higher, because full-thickness wounds drive most of the cost (Padula & Delarmente, 2019).

Avoided Cost Versus Cash Savings

A careful manager must explain one more point. The $14,506 estimate includes the cost of the extra days, staff time, supplies and overhead associated with an injury. Some of those costs, such as dressings, specialty beds and extra days of variable staffing, disappear when the injury is prevented. Others, such as the building, equipment and salaried staff, do not; they are simply spread over other patients. If only about 40% of the avoided cost is truly variable, the cash saving would be about $417,773, and the net cash benefit about $57,473, far smaller than the $684,132 on paper.

The bundle is still worth recommending, for three reasons. First, the freed bed days have value when the hospital is full, because they allow more admissions that bring revenue. Second, pressure injuries count toward Medicare's patient safety measures, and hospitals in the worst-performing quarter on hospital-acquired conditions lose 1% of Medicare inpatient payments, a penalty that would dwarf the bundle's cost for a hospital near the threshold. Third, and most important, each prevented injury is a patient spared pain, infection risk and a longer stay, which is the reason the course asks nurse managers to start from the client's needs.

Recommendation and Monitoring

The analysis supports adopting the bundle for one year on all adult inpatient units, with quarterly monitoring of three figures: stage 2 or higher pressure injuries that develop in the hospital, counted per 1,000 patient days, the share of stage 3 and 4 injuries, and actual spending on bundle supplies. If incidence has not fallen by at least 14% after two quarters, the break-even level, the team should review adherence to each element before deciding whether to continue.

Conclusion

A pressure injury prevention bundle costing $360,300 a year compares favorably with the cost of the 180 injuries the hospital now absorbs. At a 40% reduction the benefit-cost ratio is 2.9, the program breaks even at a reduction of under 14%, and published modeling reaches the same conclusion. The cash saving is smaller than the accounting saving, and a nurse manager should say so, but freed capacity, quality penalties and patient harm all point the same way. Prevention is both the better care and the sound financial decision.

References

Agency for Healthcare Research and Quality. (2017). Estimating the additional hospital inpatient cost and mortality associated with selected hospital-acquired conditions (AHRQ Publication No. 18-0011-EF). https://www.ahrq.gov/hai/pfp/haccost2017-results.html

Finkler, S. A., Jones, C. B., & Kovner, C. T. (2013). Financial management for nurse managers and executives (4th ed.). Elsevier Saunders.

Padula, W. V., & Delarmente, B. A. (2019). The national cost of hospital-acquired pressure injuries in the United States. International Wound Journal, 16(3), 634-640. https://doi.org/10.1111/iwj.13071

Padula, W. V., Mishra, M. K., Makic, M. B. F., & Sullivan, P. W. (2011). Improving the quality of pressure ulcer care with prevention: A cost-effectiveness analysis. Medical Care, 49(4), 385-392. https://doi.org/10.1097/MLR.0b013e31820292b3