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VHA National Center for Patient Safety

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Business Case for Patient Safety


Three clinicians disscussing an issue in a hospital unit.NCPS is helping Patient Safety Managers (PSMs) make a business case for patient safety by developing benefit cost and cost effectiveness measures for patient safety initiatives, as well as teaching PSMs how to perform these and other calculations. In addition, NCPS wants to establish and promote sensitivity to the impact safety has on the resources available to care for our patients. 

Benefit Cost Analysis

Benefit cost analysis compares the amount of savings gained through an investment in patient safety and is reflected as a ratio: The numerator is the benefit or avoided cost; the denominator the expense associated with the intervention. A ratio greater than one indicates a net positive return from the investment.

  • Suppose an investment in hand alcohol gels cost $2,000; further, this investment resulted in a decrease in nosocomial infections that would have cost $10,000 in extra hospital admissions. The benefit cost ratio would be five: 10,000 divided by 2,000.


Benefit or Avoided Cost


Cost of Intervention


Cost Effectiveness

Cost effectiveness measures the cost per avoided adverse event. The numerator is the expense of the intervention; the denominator the anticipated number of avoided adverse events.

  • If there were a falls intervention program that cost $40,000 per year to implement, and avoided four fractured hips during that time period, the cost effectiveness measure would be $10,000 per avoided hip fracture.


Cost of Intervention


Anticipated Avoided Events


Increasing Importance

The financial aspects of patient safety programs are becoming increasingly important because this critical element of health care is receiving an increased investment of resources. This investment may take the form of employing new dedicated patient safety staff members, the procurement of new infrastructure or equipment, or funding for training, or new root cause analysis investigations. Along with providing training on how best to use financial tools to quantify the impact of proposed actions, NCPS is helping PSMs measure the cost of past adverse events and close calls. This includes preparing them for questions to be asked by management or decision-makers, such as:

  • Can you demonstrate that this is cost-beneficial or at least cost-neutral?
  • How much will interventions and proposed actions cost in total?
  • How will we know that we have made a difference in patient safety?

While the goal of patient safety is to prevent harm to patients, it is important to make sure that the resources used are expended as efficiently as possible. By so doing, the biggest benefit can be realized by our patients.