DRGs and Outpatient AntibioticsAuthor(s): Paul B. IanniniSource: Infection Control, Vol. 7, No. 5 (May, 1986), pp. 289-290Published by: The University of Chicago Press on behalf of The Society for Healthcare Epidemiologyof AmericaStable URL: http://www.jstor.org/stable/30148517 .

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Cost Contoinrment in nfection Contro The pressures from the DRG and peer review organization (PRO)

programs are taking the patient out of the hospital earlier. For those infected patients who can appropriately leave, administration of

parenteral antibiotics at home is a palatable alternative. Dr. lannini addresses this complex issue for us in this series on Cost Con- tainment in Infection Control.

Edited by Peter A. Gross, MD

DRGs and Outpatient Antibiotics By Paul B. lannini, MD

The advent of a non-cost reimbursement system has served as an impetus for the re-examination of the meth- ods by which infectious processes are treated. This system prospectively sets payment rates for illnesses that require hospitalization. Diagnostic-Related Groups (DRGs) are the basis of this new system. DRGs attempt to link reim- bursement to the broad category of clinical diagnosis by separating diagnoses into nearly 500 groups; each with a defined reimbursement rate. This rate does not substan- tially vary with regard to the length of hospital stay, the number of diagnostic tests performed or the cost of therapy employed.'

Hospitals are focusing attention on reducing expen- ditures for many illnesses and are attempting to dissect those areas where less expensive treatment modalities can be employed. Medicare patients were the initial patients subject to DRGs but some states such as Connecticut and New Jersey have recently enacted legislation so that all patients hospitalized in that state, irrespective of insurer, fall under DRG-linked reimbursement. The fiscal integ- rity of hospitals throughout the country may be seriously jeopardized by this system, and an unwanted by-product may be a reduction in the quality of medical care.

The cost of hospitalization can be divided into fixed and variable cost centers. Fixed costs include hotel type costs (eg, depreciation of building and equipment, main- tenance, housekeeping, laundry and telephone), food, mandated programs (utilization review, medical educa- tion, social services), nursing salaries, patient support services, malpractice insurance and administrative costs. Variable costs are generally those associated with the pur- chase of supplies and medications. Reduction of fixed costs can be achieved only by closing hospital beds or substantially reducing length of stay. Initial approaches to cost containment have been directed at variable cost cen- ters. The largest variable cost in the treatment of infec- tions is the purchase price of antibiotics. However, the true cost of antibiotic therapy is multifactorial and includes not only the purchase price of the antibiotic but also non-drug costs such as those of materials consumed in the preparation and administration of a dose, the cost of labor, screening laboratory tests to monitor for toxicity and the cost of pharmacokinetic monitoring of levels for some agents. These non-drug costs vary from as little as $3.00 to as much as $14.00 per dose. Recognition of considerable non-drug expenses has led to an advocacy of long, half-lived antibiotics some of which, such as cefonacid and ceftriaxone, may be administered once daily.

Cost containment has also been approached through the restriction of antibiotic formularies that allow only a simple first-generation cephalosporin to represent that

From the Division of Infectious Diseases and Microbiology, Danbury Hospital, Danbury, Connecticut.

Address reprint requests to Paul B. lannini, MD, Chief, Infectious Diseases and Microbiology, Danbury Hospital, 24 Hospital Avenue, Danbury, CT 06810.

INFECTION CONTROL 1986/Vol. 7, No. 5 289

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group as a formulary item or restrict the use of more expensive third-generation cephalosporins or ureido- penicillins to cases approved by an infectious disease spe- cialist or a member of the Pharmacy & Therapeutics Committee. This approach can have some beneficial impact on variable expense and is desirable as a mecha- nism for reducing antibiotic costs for patients who have no alternative but to remain in the hospital for therapy.

The most dramatic reductions in costs occur when

patients can be removed from the hospital environment for a portion of their care because of the reduction of both fixed and variable costs with no diminution in reimburse- ment rate.2

Many patients remain in the hospital solely for paren- teral antibiotic therapy and no longer require skilled nursing care or diagnostic testing. Examples of this type of patient are: 1) those with osteomyelitis or septic arthritis who have had a response to initial therapy, 2) patients with viridans streptococcus endocarditis after the first 2 weeks of therapy, and 3) patients with bacteremic pyelonephritis or soft tissue infections who are afebrile after 1 to 3 days of therapy but require parenteral therapy because of bacteremia.

The completion of parenteral antibiotic therapy can be achieved in these patients at far less expense outside the hospital. Using long half-life antibiotics, ambulatory patients can return to an outpatient antibiotic clinic once daily for therapy, or they can be treated through a pro- gram that administers therapy in the home.

The cost reduction achieved is best illustrated by the example of a patient with staphylococcal osteomyelitis. The optimal therapy of this infection is generally agreed to consist of 42 days of parenteral antibiotic therapy. Analysis of the cost to treat such a patient at Danbury Hospital using minimal resources is in excess of $10,000. Minimal resources for the purpose of this example would be two blood cultures, a bone biopsy with culture, roent- genogram of the infected bone and often a bone scan, a weekly complete blood count, erythrocyte sedimentation rate and the least expensive anti-staphylococcal therapy available.

The DRG reimbursement rate for osteomyelitis is approximately $5,435. The large loss of revenue in such a case cannot be avoided unless a significant portion of the therapy is outside the hospital. We now routinely dis- charge patients in this category after less than 2 weeks of inpatient care and complete the antibiotic therapy through our outpatient antibiotic clinic. The average cost using this modality is less than the DRG reimbursement

rate and clinical outcome has been very satisfactory.:3 Sev- eral other published studies of outpatient antibiotic therapy have noted savings of approximately $1,600 to $3,600 per patient when 2 weeks or more of outpatient therapy is employed.2-6

Antibiotic therapy may also be administered in the patient's home by either a hospital-based home care pro- gram or through a commercial vendor. This type of ser- vice is best reserved for those patients who require anti- biotic dosing more than once a day or who are homebound. Hickman or Broviac catheters may be more appropriate in this situation to avoid missed doses second- ary to IV catheter failure. In my experience, the charges of commercial vendors are not substantially different from inpatient hospital charges, and only serve to change the environment of therapy. Many commercial vendors will only accept patients with the best insurance coverages.

Reimbursement for outpatient antibiotic therapy covers a wide range. Many Health Maintenance Organi- zations offer total coverage as does Connecticut Blue Cross and Blue Shield while the major commercial insur- ers cover 80% of cost, after a patient-paid deductible. Medicare does not cover this service.

Benefits other than cost reduction have also been real- ized, in that patients in this program frequently return to work during therapy and avoid lost income. Others find relief from pressures by the return to the home environ- ment. Patient and physician acceptance has been over- whelmingly positive.

The goal of cost reduction for antibiotic therapy is best achieved by the institution of several programs to reduce the cost of inpatient therapy and to reduce overall cost by early discharge to home therapy. The physician, however, must remain vigilant to assure that the antibiotics available to treat patients are the most effective and least toxic, and that only those patients who are at no risk be eligible for outpatient therapy. Zeal for cost containment must never overshadow the requirement for the best possible therapy.

REFERENCES 1. Iglehart JK: The new era of prospective payment for hospitals. N EnglJ Med

1982; 307:1288-1292. 2. Poretz DM, Eron LJ, Goldenberg RJ, et al: Intravenous antibiotic therapy in an

outpatient setting.JAMA 1982; 248:336-339. 3. Kunkel MJ, Iannini PB: Cefonacid in a once-daily regimen for treatment of

osteomyelitis in an ambulatory setting. Rev Infect Dis 1984; 6(suppl 4):S 865-S 869.

4. Stiver HG, et al: Intravenous antibiotic therapy at home. Ann Intern Med 1978; 89(I):690-693.

5. Antoniskis A, et al: Feasibility of outpatient self-administration of parenteral antibiotic. WestJ Med 1978; 128:203-206.

6. Rehm SJ, Weinstein AJ: Home intravenous antibiotic therapy: A team approach. Ann Intern Med 1983; 388-392.

290 Cost Containment in Infection Control/Jannini

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