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To cite this article: Mahmud Hassan , Howard P. Tuckman , Robert H. Patrick , David S. Kountz & Jennifer L. Kohn (2010) Cost
of Hospital-Acquired Infection, Hospital Topics, 88:3, 82-89, DOI: 10.1080/00185868.2010.507124
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Hospital Topics, 88(3):82–89, 2010
Copyright C Taylor & Francis Group, LLC
Abstract. The authors assessed the costs of hospital-acquired Several studies focus on the extent of the cost of
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infections using rigorous econometric methods on publicly HAI suggesting that aggregate costs of infections in
available data, controlling for the interdependency of length
of stay and the incidence of hospital acquired infection, and the United States may vary from $5 billion to $29
estimated the cost shares of different payers. They developed a billion (CDC 2000; Kohn, Corrigan, and Donald-
system of equations involving length of stay, incidence of in- son 1999). These costs vary based on the nature of
fection, and the total hospital care cost to be estimated using
simultaneous equations system. The main data came from the
the infection, ranging from $600 for a urinary tract
State of New Jersey UB 92 for 2004, complimented with data infection to $50,000 for prolonged bloodstream in-
from the Annual Survey of Hospitals by the American Hospital fection (CDC 2000). Typically, such estimates are
Association and the Medicare Cost Report of 2004. The au- derived from patient records and case studies, but
thors estimated that an incidence of hospital acquired infection
increases the hospital care cost of a patient by $10,375 and it the Health Insurance Portability and Accountability
increases the length of stay by 3.30 days, and that a dispropor- Act (HIPAA) of 1996 and other administrative con-
tionately higher portion of the cost is attributable to Medicare. straints restrict the ability of researchers to conduct
They conclude that reliable cost estimates of hospital-acquired
infections can be made using publicly available data. Their es- studies.
timate shows a much larger aggregate cost of $16.6 billion as A need exists for a methodology that can be used
opposed to $5 billion reported by the Centers for Disease Con- to develop cost estimates using a public database,
trol and Prevention but much less than $29 billion as reported
elsewhere in the literature.
one that provides data for a large enough number
of patients to accurately capture the costs given low
Keywords: nosocomial infection (NI), hospital-acquired in- incidence of HAI in the population. In the present
fection (HAI), infection cost study, we used a publicly available large dataset for
the empirical estimates of costs of HAI and estimate
Mahmud Hassan, PhD, is a professor of finance and economics, director of the Pharmaceutical Management MBA Program, and
the director of The Blanche and Irwin Lerner Center for Pharmaceutical Management Studies at Rutgers University, New
Brunswick in New Brunswick, New Jersey. Howard P. Tuckman, PhD, is a professor of finance and economics in the School of
Business at Fordham University in Bronx, New York. Robert H. Patrick, PhD, is an associate professor of finance and economics in
the Rutgers Business School at Rutgers University, New Brunswick in New Brunswick, New Jersey. David S. Kountz, MD, is Senior
Vice President of Medical and Academic Affairs at the Jersey Shore University Medical Center in Neptune, New Jersey. Jennifer L.
Kohn, PhD, is an assistant professor of economics in the economics department at Drew University in Madison, New Jersey.
82
HOSPITAL TOPICS: Research and Perspectives on Healthcare 83
admitted to U.S. hospitals (36 million in 1995 vs. 38 likelihood of getting an infection. They concluded
million in 1975) and length of stay (LOS) has short- that the existing literature may overstate the costs
ened (from 7.9 to 5.3 days) the number of NIs has of HAI because of endogeneity bias. Finally, Her-
increased from 7.2 per 1000 patient days to 9.8, in waldt et al. (2006) conducted a prospective study
part because hospital inpatients are older and sicker of surgical patients using a Cox proportional haz-
now than in the 1970s (Stone, Larson, and Kawar ard regression model to estimate attributable loss
2002). Seminal studies on the incidence and cost of associated with infection and found that NI is sig-
NI in the United States have been well documented nificantly associated with higher costs and that the
(Haley et al. 1985a, 1985b; Haley et al. 1987; Haley relationship is not simple and affected substantially
1991). Despite the time lag since these studies were by numerous patient characteristics.
conducted, the studies that were initially developed
as part of the Study on the Efficacy of Nosocomial METHOD
Infection Control are considered definitive. They The literature on the cost of HAI discussed pre-
find a prevalence of 5.7 infections per 100 admis- vious documents the interdependency of LOS and
sions. A key feature is the extensive and systematic
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ICD-9 codes. Platt et al. (2002) analyzed infection (Greene 1993). The estimation process must con-
post coronary artery bypass surgery and found trol for heterogeneity of patients to avoid biased es-
58% accuracy of the HAI cases using claims data. timates of the parameter standard errors, and hence
Stone et al. (2007) used about 10,000 patients both equations are estimated by controlling for het-
from 24 hospitals to compare the CDC protocol eroscedasticity of the error terms.
for identification of central-line associated blood- The primary data source of our research is the
stream infection (CLA-BSI) with the ICD-9 based State of New Jersey’s Universal Billing (UB-92)
measure, and found both the methods to be similar database, which includes all patients admitted into
in identifying the patients with the CLA-BSI. hospitals in New Jersey in 2004. Because cost-
Xm includes cost of care affecting factors, such outlier patients are reimbursed at different rates by
as presence of surgery, measure of case complexity, some payers including Medicare, we excluded pa-
a measure of teaching intensity, nursing intensity, tients with LOS in excess of 90 days to minimize
and other controls. It also includes payer-specific administrative interventions in LOS management.
binaries, such as Medicare, Medicare Managed care, We also excluded newborns from our dataset. The
Medicaid, Medicaid Managed care, Blue Cross, and UB-92 data set contains most variables used in this
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HMO (commercial payee is the omitted reference study but a few additional variables were added from
category) to control for unobserved variations in other sources including the intern to bed ratio (IN-
plan-specific constraints of care. Following Graves TERN) and the cost to charge ratio for each hos-
et al. (2005), the other control variables Xk and Xn pital in New Jersey. These two variables were ob-
include age, gender, measure of case complexity, use tained from the Medicare Cost report for 2004 and
of procedure, and other controls. the ratio of Medicaid Patient Days to Total Patient
We used a two-step procedure to estimate the pre- Days (MEDICAID), and the share of nursing staff
vious system of equations. Note that binary repre- in the total full time equivalent (FTE) number of
sentation of incidence of infection does not measure employees (NURSESHR) come from the American
severity of infection that can directly affect LOS and Hospital Association’s (AHA) annual survey of hos-
COST. pitals in 2004. The final count of the number of
First, we decomposed observed LOS into two patients used in the analysis is 1,547,702.
parts: (1) PREDLOS preinfection number of days
until a patient develops infection and (2) INFLOS RESULTS
postinfection LOS in the hospital following the on- Descriptive statistics along with the definition of
set of infection. We assumed higher severity of in- the variables used in the study are shown in Table 1.
fection leads to a higher value for INFLOS. The overall rate of infection (INFECT) is estimated
Using Equations 1 and 2, a reduced form LOS to be 6.4% of all admitted patients, which is a bit
equation was estimated using data from infection- on the high side compared to the rate reported in
free patients (INFECT = 0), the estimated equation the literature (i.e., 5.7% [Haley et al. 1985a). Given
shown in Appendix B. The estimated coefficients the higher concentration of larger teaching hospitals
are used to predict the infection-free component in New Jersey, this difference is plausible as docu-
of LOS (PREDLOS) for the INFECT = 1 group. mented by Horan et al. (1986). Cost of hospital
Postinfection components of the LOS (INFLOS) (COST) care for the infected and noninfected pa-
of this group of patients are estimated residually tients is $29,790 and $10,042, respectively, with an
subtracting PREDLOS from their observed LOS. average cost of $11,305. LOS for HAI patients is
Second, we estimated the cost (Equation 3) with estimated to be 6.76 days longer than the infection-
the entire data set substituting LOS and INFECT free patients (a percentage increase of 290%, or
by PREDLOS and INFLOS, respectively, for those 10.00 vs. 3.2 days.) A large majority of infected cases
patients who developed infection (INFECT = 1), are admitted on urgent (URGENT) basis, 86.6%
and holding the LOS of the infection-free patients for infected and 47.8% for the noninfected cases.
(INFECT = 0) at their observed values. Extent of comorbidity (CM) measured as the num-
Every patient is different in terms of clinical char- ber of diagnoses recorded for the infected patients
acteristics, such as diagnosis, severity of illness, and group is 7.36 as compared to 3.8 for the noninfected
health status. We confirmed the presence of het- group. The share of patients with HAI is dispro-
eroscedasticity on both LOS and COST equations portionately higher for Medicare (MCARE (62%))
using the White Test at 1% level of significance compared to the proportion of overall Medicare
HOSPITAL TOPICS: Research and Perspectives on Healthcare 85
patients (33%) in the study. The shares of infected ($3,144 × 3.30). This amount is consistent with
cases for Medicaid Managed Care (MCAREMC), the estimate by Kilgore et al. (2008).
Blue Cross (BC), HMO, and Commercial (COM) In 2004, 99,000 patients developed infection
payers are almost one half of the respective shares while in hospitals, suggesting that the aggregate cost
of patients in those payer groups. Blue Cross had
7.4% of the infected cases in contrast to the share of
14.1% of Blue Cross patients in the study. Several TABLE 2. Estimated Cost Equation
procedures performed are more frequent among the
patients with HAI than among infection-free group Variable Coefficient∗ SE
(e.g., Nasogastric Tube Insertion [NGT] is over 7
Constant −3, 396.4703 43.0926
times higher, 7.20% vs. 0.97%; Endotracheal Suc- PREDLOS 2, 527.9380 13.7028
tion [ES] is over 5 times higher, 6.14% vs. 1.19%). INFLOS 3, 143.8500 28.4694
The most important finding for the cost equation Medicare 229.3492 36.4899
Medicaremc 2, 152.1800 155.2405
in Table 2 is that an increase in INFLOS by 1 day Medicaid −2, 446.7730 65.4892
increases cost of hospital care by $3,144, whereas Medicaidmc −1, 480.9934 71.5476
an increase in infection-free LOS PREDLOS by BC 537.5529 32.2181
1 day increases hospital care cost by $2,528. The HMO 315.2989 27.4830
Female −1, 070.6358 21.5768
cost of an increase in INFLOS is above the cost Surgery 3, 178.3539 33.2139
of an increase in regular LOS PREDLOS by $616 CM 696.4988 9.7624
($3,144 vs. $2,528). This shows that cost of stay in Intern 9, 918.5433 98.9974
Medicaid 2, 657.3968 133.9897
hospital by one additional day once an infection is Nursehr 2, 496.0840 88.3558
acquired as opposed to regular stay increases by 24%
($616/$2,528). Given an average INFLOS of 3.30 Note. Adjusted R 2 = .615. All standard errors were
adjusted for heteroscedasticity.
days (Table 1), the incremental cost of hospital care ∗
p = 0.01.
services due to the incidence of infection is $10,375
86 Vol. 88, no. 3 2010
of infection was $1.03 billion ($10,375 × 99,000) in New Jersey and it is clear that the State of New
in New Jersey. Total cost of hospital care in New Jersey could save substantial sums if the incidence
Jersey in 2004 was $17.49 billion. Hence, 5.89% of HAI were reduced.
(1.03/17.49) of hospital care cost is attributable to Third, the largest share of HAI cost is attributable
HAI. Because 62.04% (see Table 1) of the patients to Medicare (62%), followed by HMOs (13%), and
with infection are Medicare enrollees, the Medicare’s Blue Cross (7%). Given the proportions of patients
share of the cost is $0.64 billion ($1.03 × 0.6204), for Medicare, HMO, and Blue Cross as 33%, 29%,
accordingly, $0.04 billion ($1.03 × 0.0408) for and 14%, respectively of the total patients base,
Medicaid, $0.08 billion ($1.03 × 0.0738) for Blue Medicare accrues a disproportionately higher share
Cross, $0.14 billion ($1.03 × 0.1338) for HMOs, of the cost, suggesting that Medicare should be do-
and $0.03 billion ($1.03 × 0.0259) for Commer- ing more to examine ways to reduce HAI since it
cial patients. Similarly, the shares of the costs for stands to save substantial dollars as a result. It may
Medicare Managed Care and the Medicaid Man- also be true that if the Obama administration is suc-
aged Care are $0.016 billion and $0.011 billion, cessful in implementing a new universal healthcare
respectively. The remaining 8% of the patients with program, HAI is likely to raise the cost of hospital
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HAI include self-pay, indigents, and other payers. stay for members of the new program. The public
Average cost of hospital care in Northeast region programs appear to have the greatest stake in HAI
of the United States is about 20% higher than the cost reduction.
national average in 2004 (Healthcare Cost and Uti- Fourth, our estimate of $16.6 billion as the cost
lization Database 2004). As such, the costs of hos- of NI in the United States is much larger than the
pital care for a national level extrapolation using estimates of $4.5 billion by Nguyen (2007) and $5
the data from New Jersey should be adjusted ac- billion reported by the CDC (2007); they are less
cordingly. Using this adjustment, we estimated the than $17–29 billion reported by Kohn et al. (1999).
cost of an episode of HAI in the United States to Finally, our model demonstrates that billing data
be $8,300 ($10,375 × 0.80). Using the CDC esti- such as UB 92 can be used to estimate the cost of
mated number of patients having HAI in the United HAI with reasonable accuracy. We hope that future
States to be 2 million, we estimated the total cost of researchers use our analyses to refine and improve
infection in the country at $16.6 billion ($8,300 × the understanding of HAI and its causes and con-
2 million) in 2004 (CDC 2000). Even though this sequences.
amount is about three times as high as reported by
the CDC in 2000 ($5 billion), it is much less than ACKNOWLEDGEMENTS
$17–29 billion as reported by Kohn et al. (1999). The authors thank the Department of Health and
Senior Services, State of New Jersey, for providing
DISCUSSION AND CONCLUSION us the UB 92 data for 2004. The authors also thank
The combination of a very large database with the American Hospital Association for providing a
rigorous econometric estimation techniques leads to set of hospital specific data for the research. The
several important findings that we expect may likely authors have no conflicts of interest or any financial
trigger further research. First, our estimate of the interest, relationship, and affiliation with the subject
cost of additional LOS in hospitals for patients who matter or materials of this research.
acquire infection during inpatient stay indicates that
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88 Vol. 88, no. 3 2010
Appendix A. List of the ICD Codes Used to Appendix A. List of the ICD Codes Used to
Define the Infection Binary Define the Infection Binary
(Appendix A continued)
Appendix B. Reduced Form LOS Equation:
Infection-Free Cases
Note.
Article Sources:
1. Needleman, B. et al., (2002)
2. Platt, K. et al., (2002)
3. Rubin, R. et al. (1999)
All codes from source articles cited to International Clas-
sification of Diseases, 9th Revision, Clinical Modifica-
tion.
All descriptions are most specific from source articles.