Helping lab professionals GoMolecular.

Techniques in Cost Avoidance


In this article:

  • Molecular testing often results in timely treatment, reduced 
    length of stay, and less cost per patient
  • Practice cost avoidance with MRSA testing
  • Reduce patient length of stay with enterovirus meningitis testing in the ER
  • See additional references for cost avoidance studies

By Frederick L. Kiechle, M.D., Ph.D.

There are two categories for cost reductions — “hard” cost savings and “soft” cost avoidance. Tangible “hard” cost savings are often achieved by bringing reference lab molecular tests in-house to your clinical laboratory. The more intangible, “soft” cost avoidance concept decreases costs with the introduction of a molecular testing program.

Cost avoidance can result from an action taken in the present designed to decrease costs in the future. It also can occur when a cost is lower then the original expense that would have otherwise been required if the cost avoidance exercise had not been undertaken.1 Since processes consume overhead and overhead costs money, any significant process improvement could represent a significant cost avoidance for an organization.

Molecular testing often results in timely treatment, a reduced the length of stay, and less cost per patient. In this model, the cost of treating a patient with or without the use of a molecular test to identify the potential infectious agent and the resulting treatment is confirmed. The difficulty with this exercise is the absence of hospital financial data to calculate the cost per day in the ICU or step-down unit. Therefore, ranges of hospital costs are usually obtained from literature. 2, 4, 7-9

Let’s explore two examples of pre-admission at Methicillin-resistant Staphylococcus aureus (MRSA) screening and potential Enterovirus meningitis presenting in the emergency department.

Methicillin-Resistant Staphylococcus Aureus (MRSA)

Hospital-acquired, antibiotic resistance may occur in both gram-positive and gram-negative bacteria.2 Since MRSA was first described in 1968, chromagar or other bacterial culture methods have been used to detect MRSA within 24 to 48 hours.3 Patients awaiting these test results would be kept in isolation to avoid transmission. The occurrence of person-to-person MRSA transmission in the first 24 hours may be as high as 5 percent to 15 percent, depending on the distance between the two individuals.

Molecular tests with probes to identify mec A gene, which encodes methicillin resistance, can decrease the turnaround time for detection to between two to four hours and is more sensitive than a culture. Since nasal swab testing for MRSA is not reimbursed for registered hospital patients, the effort to reduce MRSA prevalence in the hospital becomes an exercise in cost avoidance.

Table 1 illustrates the costs associated with a MRSA screening program. This particular program was initiated in five hospitals of the Memorial Healthcare System (South Broward County, Fla.) with a high-risk screening program compared to universal screening.2 The MRSA screening programs were introduced sequentially in 2008 after a point prevalence study was conducted at each institution.

The total cost for all MRSA programs in the five hospitals at MHS was $2,419,900 (Table 1) from staggered start up to March 24, 2010. For the same period the estimated cost avoidance was $8,834,000 (Table 2), using the lowest length of stay (LOS) cost per MRSA-infected patient per day ($14,000) based on 631 MRSA positive for patients for a total LOS savings of $8,834,000. As a result, the total cost savings is $6,414,100 (Table 2). Any astute hospital administrator should recognize the rapid return on investment of this MRSA screening program.

Enterovirus Meningitis in the Emergency Department

Enterovirus forms a genus of RNA virus (picornaviridas) that is small and icosahadral in structure.7 Children and adults with detectable enterovirus in the cerebrospinal fluid (CSF) may be associated with meningitis symptoms including photophobia, stiff neck, acousticophobia, severe headache with vomiting, confusion, difficulty concentrating, seizures and sleepiness.

If a patient presents to the emergency department with common symptoms of meningitis, a molecular test to determine the presence or absence of enterovirus will alter the patient’s LOS in the emergency department. If the patient is positive for enterovirus in the CSF specimen, the patient can be discharged for home care until the viral meningitis resolves (see Table 3). If the patient does not have enterovirus in the CSF, they will need further hospitalization to rule out a bacterial source for the meningitis with culture and sensitivity studies (see Table 3).

Romero7  has demonstrated the cost range for hospitalization related to EV testing/care of infection was $4,476 to $4,921 with an average LOS of three to four days. We used $4,476 for the calculations in Table 3, which illustrates the cost avoidance calculations for 20 patients with or without enterovirus detection by molecular methods.

Other Examples

References 8 and Reference 9 illustrate two different approaches to the calculation of cost avoidance. In this case, surgical intensive care unit patients with hyperglycemia are treated with an insulin drip with a target range of 80 to 110 mg/dl compared to conventional insulin therapy, which is initiated when the blood glucose is greater than 200 mg/dl. The cost avoidance for the intensive insulin therapy program compared to conventional was 2,638 Euros (9) or $1,580 (8) per patient. These two studies illustrate how valuable hospital financial data becomes in establishing the costs for specific ICU services.

Table 1

Costs Associated with MRSA Screening in High-Risk Patients (2008 through March 2010)

 Activity  Associated Cost
 Lab Costs plus point prevalence studies
 at each of five hospital sites
 Pharmacy developmental regimens  $28,795
 Infectious control contact precautions  $1,896,200
 Total  $2,419,900


Table 2

Estimated Cost Avoidance

  Activity  Cost
 Cost of MRSA infection compared to no
 infection (3,4)
 Estimated 23% - 30% of MRSA positive
 patients that will have MRSA infections with
 their colonizing strain (5,6)
 Total LOS Cost  $8,834,000
 Total MRSA screening costs  -$2,419,900
 Total cost savings  $6,414,100
LOS = Length of Stay

Table 3

Enterovirus Cost Avoidance Analysis for Two Patients from September 2008 to May 2009

 Population  EV Positive  EV Negative
 Total Patients  20  20
 Total LOS days  26  68
 Are LOS days 1 patient  1.3  3.4
 Literature-based cost based
 on admission due to EV 
 $116,376  $304,368

Estimated savings from cost avoidance:
$187,992 for 20 EV positive patients
($304,368 - $116,376 = $187,992)


1.    Lamoureux M. Cost reduction and avoidance. 2008.
2.    Rao A, Faden B, Hacker K. Molecular detection and surveillance of healthcare-associated infections. IN: Molecular Diagnostics: Techniques and Applications for the Clinical Laboratory. (Eds: Grody WW. Nakamura RM. Strom CM. Kiechle FL).  Academic Press, Inc. Boston, MA. 2010: pp 327-346.
3.    Zitterkopf NL. The advantages of molecular diagnostics in the surveillance of healthcare-associated infections. Lab Med 2008; 39: 623-625.
4.    Elixhauser A, Steiner C. Infections with methicillin-resistant Staphylococcus aureus (MRSA) in U.S. hospitals, 1993-2005. HCUP Statistical Brief #35, 2007. Agency for Healthcare Research and Quality, Rockville, MD.
5.    Huang SS, Platt R. Risk of methicillin-resistant staphylococcus aureus infection after previous infection or colonization. Clin Inf Dis, 2003; 36: 281-285.
6.    Datta R, Huang SS. Risk of infection and death due to methicillin-resistant Staphylococcus aureus in long-term carriers. Clin Inf Dis. 2008; 47:176-1781.
7.    Romero, JR. Reverse-transcription polymerase chain reaction detection of the enteroviruses. Overview and clinical utility in pediatric entroviral infections. Arch Pathol Lab Med 1999; 123: 1161-1169.
8.    Krinsley JS. Jones Rl. Cost analysis of intensive glycemic control in critically ill adult patients. Chest 2006; 129:644-650.
9.    Van den Berghe G, Wauters PJ, Kesteloot K; Hilleman DE. Analysis of healthcare resource utilization with intensive insulin therapy in critically ill patients. Crit Care Med 2006; 34: 612-616.