Costly Private Rooms Save Hospitals Lots of Money

November 5, 2015 Updated: November 9, 2015

The high cost of building additional single-patient rooms would be more than offset by the financial benefits of keeping patients safe from hospital-acquired infections like MRSA, a new study suggests.

Hospital-acquired infections are the most common complication of hospital care in the United States and lead to extended hospital stays, ultimately increasing cost and risk of mortality.

Recent health care reforms link Medicare reimbursements of hospital care to the performance of hospitals, including infection rates, and as a result,  hospitals are vigilant to reduce incidents of acquired infections like MRSA (methicillin-resistant Staphylococcus aureus), Pseudomonas, and Candida, the three most common—and most difficult to cure—infectious diseases in medical facilities.

“We showed that although single-patient rooms are more costly to build and operate, they can result in substantial savings compared with open-bay rooms—all of this by avoiding costs associated with hospital-acquired infections,” says Hessam Sadatsafavi, a postdoctoral researcher at Cornell University.

For the new study, published in the Journal of Critical Care, researchers compared costs of constructing single rooms or converting multi-patient rooms to private rooms, including subsequent annual operational costs, and then looked at the “internal rate of return” to assess the financial feasibility of the investment in private rooms.

For investors, the internal rate of return must be acceptable—10 percent, for example—to consider a capital project feasible. The researchers discovered that building new private rooms or private-room conversions made economic sense, as the internal rate of return—over a five-year analysis period—was 56.18 percent, considerably higher than any liberal estimates of rate of return acceptable by health care organizations.

While creating and operating larger private rooms from multi-patient rooms are expensive, Sadatsafavi says, “You have to spend additional money to treat the patients that acquired infection, as it would increase their hospital stay, and to contain the sickness—powerful cleaning supplies, support services. Single-patient ICU rooms reduce the cross-transmission rate and avoid extra medical costs to contain infection, and our research showed that these savings offsets capital costs.”

Researchers used a “probabilistic approach” to model unknown factors that affect clinical outcomes (infection risks and ICU occupancy rate) and financial outcomes, such as the cost of infections, construction, and operating expenses. The probabilistic approach allows for quantifying investment risks and understanding the probability of achieving investment goals. It also provided a transparent framework that hospitals can use to evaluate the tradeoff between costs and benefits of private ICU rooms.

Other researchers from Cornell and from Hormozgan (Iran) University of Medical Sciences and the University of British Columbia are coauthors of the work.

This article was originally published by Cornell UniversityRepublished via under Creative Commons License 4.0.