Skip Navigation LinksHome > July/August 2010 - Volume 40 - Issue 7/8 > Do We Know How Much the Evidence-Based Intervention Cost?
Journal of Nursing Administration:
doi: 10.1097/NNA.0b013e3181e93760
Departments: Evidence and the Executive

Do We Know How Much the Evidence-Based Intervention Cost?

Newhouse, Robin P. PhD, RN, NEA, BC, CNOR

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Author Information

Author Affiliation: Assistant Dean, for the Doctor of Nursing Practice Program, and Associate Professor, University of Maryland School of Nursing, Baltimore.

Corresponding author: School of Nursing, University of Maryland, 655 West Lombard St, Baltimore, MD 21201 (

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In this department, Dr Newhouse highlights hot topics in nursing outcomes, research, and evidence-based practice relevant to the nurse administrator. The goal is to discuss the practical implications for nurse leaders in diverse healthcare settings. Content includes evidence-based projects and decision making, locating measurement tools for quality improvement and safety projects, using outcome measures to evaluate quality, practice implications of administrative research, and exemplars of projects that demonstrate innovative approaches to organizational problems. In this article, the author discusses the importance of measuring evidence-based practice intervention costs, introduces common approaches to measuring cost, and interviews a healthcare economist, Dr Kevin Frick.

Evidence-based practice (EBP) has become a common goal for healthcare, with increased attention and dedication of resources to promote the use of best evidence to inform nursing practice. There has been exponential growth of EBP-focused journals, publications, conferences, and standards. These trends are timely, practice relevant, and necessary to promote professional nursing practice. The issue is that we have rightfully focused on improving important clinical issues, but have often failed to address the question of-at what cost?

In comparison to other countries, US healthcare costs more1 and is expected to grow at 6.7% annually without major changes in healthcare processes and reimbursement.2 It is not tenable to expect that we can continue to focus on issues of nursing quality, without accompanying the evaluation of improvements in quality with the impact on cost. Figure 1 proposes 9 different alternatives for us to consider in decisions that include both cost and effectiveness of the option (does it work).

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Figure 1
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The best option is located in the lower left corner of Figure 1. Cost is low, and the effectiveness of the option is high. In the case of low cost and high effectiveness, the option will be selected. Alternatively, in the upper right corner of the figure, cost is high, and the effectiveness of the option is low. A high cost but low effectiveness alternative will be rejected. There is also a range of alternatives in which there is high effectiveness and high cost, or low effectiveness and low cost. The issue in these choices is implementing evidence-based recommendations if the cost is prohibitive, or if the effectiveness of the option is in question.

Common approaches to assessing cost usually relate to measuring human (direct and indirect care) and material resources associated with the process or intervention. Consideration of "whose cost" is also important. The usual approach is to evaluate cost at the level of service delivery (ie, clinic or hospital). Cost can also be evaluated from the perspective of the patient, insurer, or public. It is also worthwhile to distinguish between cost and charges. Cost is the actual value for services/products, in contrast to how much was billed (charges). For example, a hospital charge for patient admission would be the insurance company's or the patient's cost.

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Common Cost-Analysis Approaches

There are 4 common approaches to cost analysis: cost-minimization, cost-effectiveness, cost-utility, and cost-benefit analysis.4Table 1 includes a description of each approach and a question that could be answered through each analysis. Each will be briefly described, and examples provided.

Table 1
Table 1
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Cost Minimization

In a cost-minimization analysis, net costs are compared when effects of an intervention are similar.4 For example, a cost-minimization analysis was conducted to identify the pressure ulcer prevention strategy that was the least resource-intensive from the hospital direct cost perspective. Technical (ie,mattress or dressings) compared with human (time) prevention strategies have a lower cost.5

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A cost-effectiveness analysis compares health benefits to cost.4 For example, when assessing the cost-effectiveness of silver-coated (vs uncoated) endotracheal tube in preventing ventilator-associated pneumonia, the relative risk of ventilator-associated pneumonia was reduced from 35.9% to 24%, resulting in a savings of $9,630 to $16,356 (95% confidence interval) per case.6

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Cost Utility

A cost-utility analysis compares an intervention effect using a utility-based measure such as dollars spent per quality-adjusted life-year.4 For example, in the cost-utility analysis of a walking program for older adults, the cost utility was acceptable ($15,104/quality-adjusted life-year gained).7

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Cost Benefit

A cost-benefit analysis compares cost to benefit.4 For example, when evaluating the cost benefit of a "search and destroy policy" for methicillin-resistant Staphylococcus aureus including screening, isolation, decontamination, and treatment, the costs (screening/quarantine) were compared with benefit (cost avoided in isolation, treatment decontamination, and length of stay). In the ICU, the benefits (avoided cost of isolation, treatment, and length of stay) were 16,058 euros, and the cost (screening and quarantine), 13,772 euros.8

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Expert Opinion by Economist, Dr Kevin Frick

Dr Kevin Frick, an economist, often lectures to national audiences and publishes papers related to economic methods to help health providers develop better skills in economic evaluation.9 He is a team member on multiple studies that test nursing interventions so that an economic analysis of the cost of the intervention can be assessed. In a recent example, his team conducted a cost comparison of a Hospital at Home model in which older patients with chronic care conditions were treated in the home instead of the hospital.10 Dr Frick comments on the importance of economic evaluation for nurses.

What suggestions do you have for nurses who are implementing EBP interventions?

Nurses who are implementing EBP interventions will need to incorporate economic analysis in their decision and evaluation plan. In today's healthcare environment, the cost of evidence-based interventions to healthcare organizations, patients, providers, and insurance companies has to be considered. The approach to the economic assessment will vary, depending on the purpose of the analysis and perspective. Decision makers will need to weigh alternatives and answer questions about the expected change in cost if the evidence-based recommendation is implemented, as well as the change in the quality of patient care expected. After the change is implemented, they will need to follow through to capture the actual costs incurred to evaluate if projections were accurate for both the cost and quality impact. Teams charged with these decisions are realizing that a diversity of skills is needed, and economic expertise is essential to quantify the impact of decisions.

How important is it to include an economic analysis when determining the feasibility of implementing EBP recommendations?

The value of including the economic analysis both during the decision to implement a recommendation and during the evaluation will be important. Sooner or later, someone is going to ask: "How much will it cost?" Without the estimates of cost and effectiveness, it will be difficult to make the case that resources should be allocated to a change or convince multidisciplinary teams that a change is necessary.

The importance of economic analysis also extends beyond the organizational perspective to regions, states, and global location. As the science of comparative effectiveness spreads, studies will include an assessment of the cost-effectiveness of alternatives. Cost has not been a primary outcome so far. In addition, the question of who pays or is responsible for the cost has to be considered. The question of the cost to the public or societal perspective is becoming more important.

What is the most common economic analysis that nurses use to estimate costs?

The most common economic analysis that nurses conduct is a simple description of the cost, without a comparison to effectiveness, utility, or benefit. Nursing administrators often conduct a return on investment to make a business case for a change in practice or decision to purchase equipment or start a program. This is a different question than assessing cost in relationship to gains in quality. A return on investment usually focuses on the economic returns only. What we find in the literature most often is the assessment of new programs, equipment, or disease management.

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Nurses engaged in EBP must begin to incorporate economic metrics and evaluate the cost impact of recommendations implemented. Four common methods include cost-minimization, cost-effectiveness cost-utility, and cost-benefit analysis. An interview with economist, Dr Frick, reinforces the urgency and importance of measuring cost and the economic tone of the day that sets the expectation for nurses to know the cost of EBP interventions for organizations, patients, providers, and society.

Nursing practice has refocused in the right direction by fostering the use of best evidence to inform practice. We have embraced the evaluation of EBP outcomes in terms of clinical improvements and quality. It is now time to move forward in expressing the value we bring to patients in terms both quality and cost.

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1. The Commonwealth Fund Commission on a High Performance Health System. Why not the best? results from the national scorecard on U.S. health system performance, 2008. July 2008. Available at Accessed April 8, 2010.

2. The Commonwealth Fund Commission on a High Performance Health System. The path to a high performance U.S. health system. A 2020 vision and the policies to pave the way. 2009. Available at∼/media/Files/Publications/Fund%20Report/2009/Feb/The%20Path%20to%20a%20High%20Performance%20US%20Health%20System/1238_Commission_Path_Exec_Summ_21909.pdf. Accessed April 8, 2010.

3. Marshall D, Demers C, O'Brien B, Guyatt G. Economic evaluation. In: DiCenso A, Guyatt G, Cilisk D, eds. Evidence-Based Nursing: A Guide to Clinical Practice. St Louis, MO: Elsevier Mosby; 2005:298-317.

4. Schulman K, Seils D. Chapter 12: clinical economics. Interactive Textbook on Clinical Symptom Research. Available at Accessed April 8, 2010.

5. Schuurman JP, Schoonhoven L, Defloor T, van Engelshoven I, van Ramshorst B, Buskens E. Economic evaluation of pressure ulcer care: a cost minimization analysis of preventive strategies. Nurs Econ. 2009;27(6):390-400, 415.

6. Shorr AF, Zilberberg MD, Kollef M. Cost-effectiveness analysis of a silver-coated endotracheal tube to reduce the incidence of ventilator-associated pneumonia. Infect Control Hosp Epidemiol. 2009;30(8):759-763.

7. Chen IJ, Chou CL, Yu S, Cheng SP. Health services utilization and cost utility analysis of a walking program for residential community elderly. Nurs Econ. 2008;26(4):263-269.

8. Simoens S, Ophals E, Schuermans A. Search and destroy policy for methicillin-resistant Staphylococcus aureus: cost-benefit analysis. J Adv Nurs. 2009;65(9):1853-1859.

9. Frick KD. Microcosting quantity data collection methods. Med Care. 2009;47(7 suppl 1):S76-S81.

10. Frick KD, Burton LC, Clark R, et al. Substitutive Hospital at Home for older persons: effects on costs. Am J Manag Care. 2009;15(1):49-56.

© 2010 Lippincott Williams & Wilkins, Inc.