Can Private Rooms Save Costs by reducing HAIs?: a Monte-Carlo Simulation Study for Cost-Benefit Analyses of a Public Safety-net Hospital
O'Neill, Liam PhD
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Purpose: Private patient rooms (PPRs) have long been hypothesized to lower the risk of critical hospital-acquired infections (HAIs) including methicillin-sensitive staphylococcus aureus (MSSA), methicillin-resistant staphylococcus aureus (MRSA) and central-line associated bloodstream infections (CLABSIs). Moreover, there has been an increasing interest in “evidence-based design” and how structural elements influence health and financial outcomes. However, evidences have been weak from management and policy perspectives. Extant literature consists either expert opinions or case studies based on a single hospital. This simulation study investigated whether cost-savings from reductions in HAIs justify additional construction and operating costs of hypothetical All-PPR renovation projects. Methods: We conducted probabilistic Monte-Carlo cost-benefit analyses of converting the existing space occupied by bay rooms to PPRs for a large (537-bed) public safety-net hospital, based on known quantities drawn from the Texas Inpatient Public-Use Data File (IP PUDF). Three HAIs (two staphylococcus aureus infections – MSSA and MRSA – and CLABSI acquired during hospitalizations) were considered in this study. Two patient-level statistical models were developed to predict the effect of PPRs on hospital-acquired MSSA/MRSA risk and the effect of MSSA/MRSA on hospital costs, by using logit regression and generalized linear regression models respectively. Medicare payments were used as a proxy measure for hospital hosts. Attributable costs were estimated by taking difference between matched groups. Potential confounders including patient mix, hospital characteristics, nurse staffing, occupancy rates, physical space, procedure classes, and clinical burden were adjusted in both predictive models. We also used our previous CLABSI study to identify and estimate relevant variables (acquisition risk and attributable cost) of CLABSIs. Results: Despite uncertainty in cost estimates and infection risks, our simulation findings indicated that the cost savings from the reduction of HAIs meaningfully offset huge construction costs and operating expenses for the target hospital, ultimately contributing to positive net benefits ($4,122,019; 95% CI was [$772,996, $7,471,043]). The mean value of internal rate of return (IRR) over 5-year analysis period was 8.71% (95% CI= [3.83%, 13.58%]), outperforming the threshold of cost of capital for healthcare facility sector (5.8%). Even after considering randomness of various conditions, the likelihood of renovation project success (as defined by IRR greater than 5.8%) exceeded 87% with 5,000 repeated simulated trials. Conclusions: Our study shows that although All-private room facilities are costly to build and operate, they can result in substantial cost-savings on top of improved safety (fewer adverse events and/or deaths).