Price vs. cost in wound care: Why the difference matters
This article is the first in a series where we’ll explore the topic of wound care economics as it relates to patient outcomes and financial outcomes. We start by defining the difference between the price of a product and the cost of a product. Read on to learn more about this distinction and how it helps you select the right wound healing therapies for your patients.
With healthcare budgets under scrutiny and reimbursement regulations top of mind, clinicians need to understand the economics of wound care in order to validate their product requests and recommendations.
A growing shortage of nurses and an increasing aging population means there’s also a growing number of patients with hard-to-heal wounds, often due to diseases such as obesity, diabetes and venous insufficiency.¹ More wounds translate to more money spent managing them. Some studies estimate as much as $96.8 billion is currently spent on acute and chronic wound treatments.²
It’s important to have a solid skin health plan, standardized protocols and evidence-based practices that help you choose wound care products that meet your needs.
$96.8 billion
U.S. total spend on wound treatments2
8.2 million
Medicare beneficiaries with a wound or related infection2
Deciding on therapies based on economics
In every wound care setting, there’s a push-pull relationship between product needs and budget constraints. Choices have to be made about what to spend money on. Sometimes, it’s an easy decision and other times the complex variables involved make it more difficult. Looking at those choices through the filter of healthcare economics can help.
Although there are various ways to discuss this economic tension, we talked to experts specifically about the idea of the price of a product as opposed to its overall cost.
Factors to consider
Price is defined as the literal budget line-item for any individual skin health product, but as we learned from talking to wound care experts, “cost” takes much more into consideration. “I’d say the main consideration for me would be outcomes,” says Andy Wheeler, director of Therapy Specialty Services at VNA Health Group in New Jersey, and a Medline consultant.
Medline’s Vice President of Health Economics Margaret Halstead agrees about patient outcomes. She points out, “The most expensive therapy is the one that doesn’t work.”
Evaluating the cost of a product based on patient outcomes has its challenges, because there are any number of outcomes you might assess. In fact, researchers remind us that there is no international agreement on which outcome measures to use.¹ Our research shows that two of the most common options are time to healing and percentage of wound reduction. Whichever method you choose, be sure to take into account your patient’s specific disease and the therapy used.
Our research shows these are 2 of the most common ways to measure wound outcomes
- Time to healing
- Percentage of wound reduction
After you’ve decided which outcome measurement to track and assess product cost, it’s important to monitor how the product itself is used.
Clinicians we spoke with agree that these four aspects are key to determining overall cost of a product:
- Frequency of application
- Staffing time per patient
- Ease of application and removal
- Patient satisfaction
Case study 1: Cost savings with an advanced burn and wound care dressing
“Positive outcomes usually produce money-saving in the long run,” says Andy Wheeler, director of Therapy Specialty Services at VNA Health Group in New Jersey, and a Medline consultant. Working with home health care, Wheeler explains, “Sometimes this is abstract for people to remember, but in home care, you’re incentivized, because a better outcome is directly a cost-savings with an episode of care.” For Wheeler, the best example of positive outcomes as it relates to cost versus price, came when the VNA Group learned of PluroGel. “It was a very new concept for the industry in general,” he says. Although he says the price was “relatively high compared to other products,” Wheeler explains, “We quickly found that it was extremely useful and very efficient. If you’re looking over time, a lot was happening and improving in the wound, so we could justify maybe spending a little more than we were used to because the results were there, so it quickly made sense to spend the money upfront and have the patient benefit.”
“The other thing about the product,” Wheeler continues, “was that some of the more traditional topical products were prescription only, and there’s a huge cost burden on the patients, so we were able to take some of that cost burden away from the patient. Everyone benefited because the wound got better.”
“The good thing about a product that works quickly is that there’s not a lot of ‘prove-it’ work for the staff,” Wheeler notes. “So it was pretty easy adoption.”
Case study 2: Improved clinical and financial outcomes with an innovative moisture barrier
In a study on the costs associated with the management of moisture-associated skin damage (MASD), Dr. Kevin Y. Woo, PhD, RN, FAPWCA, assistant professor at Queen’s University School of Nursing and a Medline consultant, compared various types of therapies, including Marathon® Liquid Skin Protectant.4 The results exemplify how the price of a product is very different than the cost.
“Because one unit of application of Marathon is more expensive than one unit of application for a traditional barrier, we factored in all the costs we should be considering,” Dr. Woo explains. These costs included product price, labor cost and frequency of application required.
The study reveals that Marathon represents an average savings of 73.5% compared to traditional methods for managing MASD. One of the big differences was that multiple applications were needed with barrier creams and foam dressings, whereas Marathon could stay on as long as three days.
Patient outcomes also showed savings. “We’ve seen faster healing and better outcomes with Marathon,” Dr. Woo says, “so, of course, it translates into shorter duration of treatment versus the traditional barrier.”
Another aspect not even captured in the cost savings was product waste. Dr. Woo explains: “If you go into a patient’s room, you often see multiple tubes of products lying around because one nurse applies something and the following day, the next nurse brings in another barrier cream. Once it’s in the patient’s environment, you can’t take it back, so you end up with multiple products wasted. That cost adds up.” On the other hand, Dr. Woo notes, “With single-use Marathon, you carry in one tube each time.”
Advocating for the right products
Now that you’ve learned why it’s important to distinguish between product price and cost, here are three tips to help you advocate for the right wound care products that consider overall cost and meet your clinical needs:
1 | Standardize products. “Adherence to a care plan makes it easier,” Halstead stresses. Knowing the right product to use at the right time on the right patient saves labor costs and avoids wasted product.
2 | Collect data. Rigorously and consistently collect wound care data that can support your recommendations. As Wheeler notes, “Eventually someone will come knocking and say you need to explain why you spent so much on this product or, ‘OK, we spent X amount, but what were the outcomes?’” By keeping that data, you’ll more easily be able to answer those questions.
3 | Educate people. “A good decision is based on knowledge, not numbers,” Halstead notes. That’s why education is so important to encourage clinical adoption. As Wheeler adds, “If there’s not adoption by the end user, we’re just not going to be able to push the usage of it, despite it being a useful and effective product.” He encourages wound care professionals to take advantage of the education offered by product partners. “Any time a vendor can assist with education, explaining the science behind the products or giving people a better understanding about how to use them, it helps in our mission to be cost-effective and helps you weigh the cost versus price.”
Key takeaway
Wound care economics includes many measures. One of the most important ones is the distinction between price of a product and overall cost. The overall cost takes into account factors such as application time and wound healing outcomes. It’s important to know how to advocate for the products that consider price and cost and meet your clinical needs and patient outcome expectations. Read the next wound care economics article in the series.
References:
- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2697592/
- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6389759/
- International consensus. Making the case for cost-effective wound management. Wounds International 2013. Available to download from www.woundsinternational.com
- Woo, Kevin Y. “Health economic benefits of cyanoacrylate skin protectants in the management of superficial skin
lesions.” International wound journal vol. 11,4 (2014): 431-7. doi:10.1111/iwj.12237
