Is a Patient’s Life Worth $30 per Day?: The Costs of Monitoring and Not Monitoring Patients

By Michael Wong, JD

This is the question that I asked myself when I recently interviewed Dr. Frank Overdyk for a clinical education podcast, “Preventing Avoidable Deaths.”

Frank Overdyk, MD is an anesthesiologist practicing in Charleston, SC.  He organized two conferences on opioid-induced respiratory depression for the Anesthesia Patient Safety Foundation. Dr. Overdyk also is a member of the advisory board for the Physician-Patient Alliance for Health & Safety.

During the podcast, Dr. Overdyk said that the costs of monitoring patients was between $20 to #30 dollars per day:

there are estimates that the daily cost of continuous monitoring of a patient for example with a pulse oximetry is on the order of 20 or 30 dollars a day. This does not include the cost implications of staff workflow and some of these other softer costs – indirect costs.

Dr. Overdyk was citing calculations by George Blike, MD, who is Chief Quality and Value Officer at Dartmouth Hitchcock Medical Center. These calculations showed that the average costs for surveillance monitoring is $85 in the first year and then $22 in subsequent years:

Dr. Bilke’s numbers stem from research which he undertook with his colleagues at Dartmouth, “Impact of pulse oximetry surveillance on rescue events and intensive care unit transfers: a before-and-after concurrence study.” This research was prompted by preventable deaths in hospitalized patients, which may be due to unrecognized deterioration.

The Dartmouth researchers implemented a patient surveillance system based on pulse oximetry with nursing notification of violation of alarm limits via wireless pager. After collecting data for 11 months before and 10 months after implementation of the system, they concluded:

Patient surveillance monitoring results in a reduced need for rescues and intensive care unit transfers.

If you – or a loved one, a friend or neighbor – is in hospital, do you think that $22 per day is a reasonable amount to ensure that you do not die?

Being a lawyer, I also asked myself – what are the costs of not monitoring a patient? What I found was that it costs a lot to defend against preventable adverse events and death:

• According to the Institute of Medicine, each preventable adverse event costs about $8,750. This excludes potential litigation costs, which when included substantially increase the costs of not avoiding adverse events.
• In “Malpractice Litigation and Medical Costs,” researchers calculated that malpractice litigation accounts for roughly 2-10% of medical expenditures.
• According to the American Hospital Association, total expenditures for the 5,724 registered hospitals in 2011 were $773,546,800,000 or an average of $135,140,950 per hospital. This means that each hospital is spending from $2.7 million to $13.5 million on malpractice litigation.
• These figures are supported by estimates from the American Medical Association that calculated that it costs $110,000 per case defending claims.

At Dartmouth, pulse oximetry was used. However, there has been research showing that other types of monitoring has also resulted in an increase in patient safety:

• At St. Joseph’s/Candler Health System, they monitored patients with capnography, which measures a patient’s adequacy of ventilation. They found out that over a 5-year period of implementing their patient safety initiative, they prevented at least 471 adverse events and had a return on investment of $1.87 million and an internal rate of return of 81%.
• At Brigham and Women’s Hospital, Eyal Zimlichman, M.D., MSc., and his colleagues used a continuous electronic monitoring system that tracked heart rate, respiratory rate, and patient motion. They found that continuous patient monitoring on a medical-surgical unit was “associated with a significant decrease in total length of stay in the hospital and in intensive care unit days for transferred patients, as well as lower code blue rates.” Moreover, they found that implementation of this continuous electronic monitoring system was “associated with a highly positive return on investment.”

The costs of monitoring are low and the costs of not monitoring patients are high. It costs $22 per day to monitor a patient. However, if an adverse event or death occurs, the Institute of Medicine has calculated that each preventable adverse event costs about $8,750 and the American Medical Association calculates that it costs $110,000 per case defending such claims.

So, why aren’t all hospitals monitoring their patients? In the podcast, Dr. Overdyk clinicians may be reluctant to change:

There’s a reluctance to change things – medicine is a very difficult industry to get change. We are a long way away from being a higher reliability industry, where we have a very high quality. Our quality is not reliable and there’s a great variation. So, we are reluctant to change.

… I think that as we go into our clinical day every day, we need to make a commitment to take care good care of all our patients, not just most of them. And if you do so, you will recognize that the extra effort required to keep them safe may come at a small expense to you – you may have to respond to a few false positive alarms during a shift or you may have to spend little time educating a patient what you do to keep them safe with a monitor or with the pain expectations or how they can help in that care – but not having to sit and explain to a patient’s family, why they died a preventable death or have a lifelong brain injury is well worth that investment.

Michael Wong, JD is Founder and Executive Director of the Physician-Patient Alliance for Health & Safety.