Budget Impact and Financial Analysis of Outpatient Dalbavancin in an Urban, Non-Teaching, Community Hospital

Abstract

Background

Acute bacterial skin and skin structure infections (ABSSSI), diabetic foot infections (DFI), and osteomyelitis often require extended antimicrobial therapy courses. Dalbavancin’s long half-life allows outpatient or emergency department (ED) management of patients not amenable to oral antimicrobials and/or outpatient infusion.

Objective

To provide a budget-impact analysis and real-world assessment of dalbavancin cost and reimbursement data, and model drug acquisition cost-avoidance compared to daptomycin and oral linezolid in outpatient and ED patients at our institution (New Jersey, USA).

Methods

All patients treated with dalbavancin in the ED or outpatient wound clinic during the one-year study period with available drug-specific reimbursement data were included. Wholesale acquisition costs were compared between dalbavancin, daptomycin, and oral linezolid. We conducted a regression analysis studying profit changes with patient weight, indication, drug-specific reimbursement, and treatment duration. We fitted a linear mixed-effects model and paired t-test to explore relationships between potential profit and various predictors while accounting for random effects of different indications. Paired t-tests were conducted evaluating potential profit and cost avoidance from the hospital and institutional pharmacy perspective associated with dalbavancin across treatment durations and indications.

Results

Eighty-eight individual patient encounters were included in the final analysis. Treatment indications included ABSSSI (48.9%), DFI (33%), diabetic foot osteomyelitis (9%), osteomyelitis (6.8%), and septic arthritis (2.3%). An overall positive reimbursement of approximately US$3500 per patient per encounter was realized. Drug acquisition cost modeling demonstrated variable cost avoidance with dalbavancin compared to daptomycin or oral linezolid based on anticipated treatment duration. Average wholesale acquisition cost difference ranged from a potential loss of US$427.64 to a gain of US$12,557.94 and a loss of US$829.28 to possible gain of US$4370.32 compared to daptomycin and linezolid, respectively, based on treatment duration.

Conclusions

Outpatient dalbavancin utilization presents an opportunity to realize net positive reimbursement and minimize pharmacy drug acquisition costs. Our study suggests that dalbavancin utilization presents significant cost advantages over intravenous daptomycin in both short and long treatment durations and over oral linezolid in long durations.

Key Points

Our study showed that dalbavancin utilization in the outpatient setting of a community medical center resulted in net positive reimbursement.

Our study demonstrated a cost-avoidance opportunity by using dalbavancin in the treatment of infections compared to daptomycin and oral linezolid.

Results support development and implementation of an algorithm delineating potential candidates for treatment with dalbavancin.

Introduction

Acute bacterial skin and skin structure infections (ABSSSI), diabetic foot infections (DFI), diabetic foot osteomyelitis (DFO), and osteomyelitis (OM) are significant causes of morbidity and mortality in the USA, in both inpatient and outpatient settings. Between 2010 and 2020, annual overall ABSSSI incidence ranged from 73.2 to 83.2 per 1000 person-years observed (PYO) with an annual hospitalization rate of 2.1–2.4 per 1000 PYO. Rates of infections with complications increased from 3.5 to 6.3 per 1000 PYO. Incidence in patients with comorbidities were found to be as high as 281.4 per 1000 PYO. The cost per episode to manage these infections average $3,334 ± $20,030 overall and US$36,515 ± US$58,567 for hospitalized individuals [1]. Studies estimate inpatient length of stay can range from 7 to > 30 days for patients diagnosed with complicated infections [2, 3].

Infections secondary to methicillin-resistant Staphylococcus aureus (MRSA) have steadily increased in the USA. Effective treatment of these infections has become more difficult to achieve and empiric monotherapy with typical β-lactams may no longer be sufficient. Traditionally, patients with known or suspected MRSA infections are initiated on vancomycin, daptomycin, or linezolid, and require an extended course of antimicrobial therapy [4]. Patients unable to switch to oral alternatives may necessitate lengthened hospital stays, transfer to secondary care facilities, or arrangement for outpatient parenteral antibiotic therapy (OPAT) with placement of invasive vascular access for extended durations [5]. However, infusion centers and patients alike are often not amenable to intravenous (IV) administrations more than once per day. This often limits treatment options to parenteral daptomycin, dalbavancin, and oral linezolid. Prolonged oral antimicrobial use risks toxicities, poor adherence, and intolerance [6, 7]. The economic implications of managing these increasingly complex infections include higher direct and indirect costs. Deid and colleagues discussed dalbavancin use to consolidate the last 7 days of therapy and expedite hospital discharge [2]. They estimated a length-of-stay (LOS)-related cost avoidance of US$9,600 per patient.

Long-acting lipoglycopeptide antibiotics, such as dalbavancin, have transformed management of Gram-positive infections. Dalbavancin possesses activity against a broad range of Gram-positive pathogens, including MRSA, and is currently approved by the US Food and Drug Administration (FDA) for management of ABSSSI caused by susceptible pathogens. Management of non-FDA-approved indications, such as OM, require clinician reliance on data from observational and/or smaller studies. However, data increasingly suggest efficacy and utility in off-label infections, including OM [2, 3, 8]. Dunne and colleagues estimate dalbavancin plasma and bone concentrations to be above the Staphylococcus aureus minimum inhibitory concentration (MIC₉₀) at 8 weeks after two doses of 1500 mg given one week apart [9]. This ensures extended durations of therapeutic levels against this pathogen and limits treatment failure and resistance emergence. Clinical evidence from smaller studies demonstrate successful OM treatment with dalbavancin. In one study, 97% of patients achieved treatment success with dalbavancin compared to 88% receiving standard of care (SOC) [7].

Outpatient management of complex infections can be further exacerbated by difficulties inserting or maintaining long-term vascular access, potentially erratic absorption of oral antimicrobials, social concerns including unreliable follow-up, and patients’ financial constraints [3]. Such populations often require admission primarily directed at parenteral antimicrobial therapy. Long-acting lipoglycopeptide antimicrobials allow for outpatient management of patients with complicated infections. Dalbavancin is generally infused intravenously over 30 minutes as a single-dose or a two-dose regimen given one week apart. Such dosing regimens are beneficial in management of patients with significant socioeconomic barriers or those who prefer outpatient treatment [4, 10]. Some clinicians consider active intravenous drug users (IVDU) to be poor candidates for OPAT, but appropriate candidates for treatment with dalbavancin [11]. Indigent and underinsured patients may also be suitable for outpatient dalbavancin.

These lipoglycopeptides, similar to novel agents in the Gram-negative space, are often seen as cost-prohibitive to many facilities, which limits their formulary inclusion. Literature analyzing cost comparison of dalbavancin to other drugs strictly in the outpatient and ED setting is limited. Additionally, publications illustrating net outpatient drug-specific reimbursement are scarce. Potential cost-saving and/or cost-avoidance data aid in formulary decision making, and are relevant to hospital pharmacies, affiliated clinics, antimicrobial stewardship programs, and hospital administrators. The objective of our financial, budget-impact analysis was to evaluate net reimbursement of outpatient and ED patients receiving dalbavancin at our institution and compare modelled drug acquisition costs between IV dalbavancin, IV daptomycin, and oral linezolid.

Methods

Our facility is an urban, non-teaching, disproportionate share community medical center with approximately 75,000 ED visits annually. Our affiliated outpatient wound care center (WCC) is a high-volume clinic that manages complex conditions, including ABSSSI and OM. During the study period, dalbavancin therapy was prescribed in both the ED and WCC. As this study focused on the financial landscape, we assumed comparable efficacy between dalbavancin, daptomycin, and oral linezolid for the prescribed durations (as has previously been published) [3]. Our Institutional Review Board (IRB) approved this study and granted a waiver of informed consent. All financial and reimbursement data have been rounded per institutional requirements.

Part 1

This study evaluated all patients treated with dalbavancin in the ED and outpatient setting in our facility during a one year-period. Patient demographics, baseline characteristics, treatment indication, and medication doses were obtained from the electronic medical record (EMR). The hospital’s financial system was then queried to identify billing, insurance, and drug-specific payment information. Patients for whom drug-specific reimbursement information was unavailable were excluded from the analyses. Patients with non-traditional insurance, including charity care, self-pay, and non-health insurance were excluded, as they may have been eligible for receipt of various patient assistance programs. Wholesale acquisition cost (WAC) was applied in calculations to allow for a more conservative savings estimate, and more generalizable outcome values with relevance to US hospitals. A budget impact analysis, including regression analysis with a linear mixed-effects model, was conducted to evaluate study results and outcomes. Our first objective was to study how the potential profit changes with the other variables of the dataset. We obtained boxplots to study and summarize the variability in potential profit by indication (see Fig. 1). We conducted a regression analysis to study the changes in potential profit with weight, indication, drug-specific reimbursement, and treatment duration (shortest or longest anticipated treatment duration in days). We fitted a linear mixed-effects model and paired t-test to explore the relationship between potential profit (WAC) and various predictors while accounting for the random effects of different indications. The model includes the following fixed effects: weight, dose received, reimbursement, and duration of treatment. Additionally, descriptive statistics, including measures of central tendency and dispersion, were used to assess study results. Monetary values are presented in 2018 US dollars (US$).

Fig. 1.

Boxplot of potential profit across different medical indications. Each box represents the distribution of potential profit for a specific indication (e.g., ABSSSI, DFI, DFI/OM, OM, SA), with jittered points showing individual data observations. The legend indicates the categorical color and shape mapping for each indication. Variability and central tendencies are visualized, highlighting differences in profit potential among the indications. ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis, WAC wholesale acquisition cost

Part 2

In the outpatient setting, once-daily infusions of daptomycin or highly bioavailable oral (PO) linezolid are commonly used agents for managing complex ABSSSI, DFI, and OM caused by Gram-positive microorganisms. Although generic versions of these agents are available, a potential saving was hypothesized through dalbavancin utilization. As such, wholesale acquisition costs were compared between dalbavancin, daptomycin, and oral linezolid. To standardize comparisons, dalbavancin was presumed given as one 1500-mg infusion for ABSSSI and two 1500-mg infusions for other indications. Daptomycin was standardized in the model as 4 mg/kg once daily for ABSSSI and 8 mg/kg once daily for other infections with cost rounded up to the nearest 500-mg vial size. Linezolid was modeled as 600 mg PO twice daily irrespective of indication. The costs of dalbavancin, daptomycin, and linezolid were compared using pre-defined, evidence-based “short” and “long” durations of therapy to account for a range in treatment durations due to infection complexity and prescriber discretion (see Table 1) [12–19]. A budget impact analysis, including regression analysis and paired t-tests, was conducted to evaluate study results and outcomes. We compared cost avoidance between dalbavancin, daptomycin IV, and linezolid PO by fitting a linear mixed-effects model, which included the shortest anticipated duration of stay as a fixed effect and accounted for the random effects of different indications. All of our models were based on 88 observations across 5 groups.

Table 1.

Standardized treatment durations used in calculations [12–19]

Indication	Treatment duration (short); days	Treatment duration (long); days
ABSSSI	5	14
DFI	7	28
DFI/OM	14	84
OM	42	84
SA	14	42

ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis

Results

A total of 109 dalbavancin doses were administered during the study period. Each administration was considered an independent encounter. After exclusions, 88 encounters involving 62 individuals were assessed. Most patients received dalbavancin for ABSSSI (48.9%), followed by DFI (33%), DFO (9.1%), OM (6.8%), and septic arthritis (2.3%) (see Table 2). Ninety-two percent of dalbavancin orders were prescribed by the Infectious Diseases or Podiatry services and 8% by Emergency Medicine.

Table 2.

Dalbavancin use by indication

Indication	N (%)
ABSSSI	43 (48.9)
DFI	29 (33)
DFI/OM	8 (9.1)
OM	6 (6.8)
SA	2 (2.3)
Grand total	88 (100)

ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis

Part 1

Average drug-specific reimbursement for dalbavancin was approximately US$3,500 ± US$1,750 per encounter (see Table 3). Fifty-eight percent of patient bills (n = 51) realized a positive reimbursement to the hospital, even after accounting for drug cost. Aggregate reimbursement less dalbavancin acquisition cost was approximately US$70,000 for the year. The linear mixed-effects model assessing potential profit demonstrated a good fit (Akaike Information Criterion [AIC] = 1180.88; Bayesian Information Criteria [BIC] = 1197.81). Random effects accounted for variability due to different indications (SD intercept = 41.69; SD residual = 187.65). Fixed effects analysis revealed that reimbursement was significantly positively associated with potential profit (estimate = 1.0083, p < 0.0001), while dose received was significantly negatively associated (estimate = − 1.188, p < 0.0001). Weight had a positive but marginally insignificant effect (estimate = 1.1116, p = 0.0798), and duration of treatment was not significantly associated (estimate = − 2.5928, p = 0.1190). These findings indicate that reimbursement and dosing are critical factors affecting potential profit.

Table 3.

Reimbursement (in US$) and financial impact of each dose of dalbavancin use by indication

Indication	Drug-specific reimbursement; mean	Drug-specific reimbursement; SD	Potential profit; mean	Potential profit; SD
All indications	$3520.81	$1745.62	$812.59	$1712.86
ABSSSI	$3389.21	$1829.32	$715.81	$1774.32
DFI	$3874.72	$1795.2	$1167.6	$1772.77
DFI/OM	$3633.01	$1702.68	$829.21	$1702.68
OM	$2812.58	$559.59	$8.77	$559.59
SA	$2894.34	$2046.6	$90.54	$2046.6

ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis, SD standard deviation, WAC wholesale acquisition cost

Part 2

A series of linear mixed-effects models and paired t-tests were conducted to evaluate the potential profit and cost avoidance associated with dalbavancin compared to daptomycin IV and linezolid PO across different treatment durations and indications (Figs. 2, 3).

Fig. 2.

Cost avoidance—dalbavancin versus daptomycin (mean). ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis

Fig. 3.

Cost avoidance—dalbavancin versus linezolid (mean). ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, SA septic arthritis

Dalbavancin Versus Daptomycin IV (Short Duration) Analysis

In the comparison between dalbavancin and daptomycin IV for short treatment durations, the linear mixed-effects model showed acceptable fit (AIC = 1305.99; BIC = 1315.81). Random effects captured variability between indications (SD intercept = 556.80; SD residual = 402.58). The fixed effects analysis revealed that the shortest anticipated duration was significantly associated with cost avoidance favoring dalbavancin (estimate = 154.34, p = 0.0041). The paired t-test confirmed that dalbavancin was significantly less expensive than daptomycin IV (mean difference = − US$290.80; t(87) = − 1.85; p = 0.0338).

Dalbavancin Versus Linezolid PO (Short Duration) Analysis

For short durations, the anticipated duration did not significantly influence cost avoidance between dalbavancin and linezolid PO (Estimate = 25.87, p = 0.1867). The model showed good fit (AIC = − 4424.62; BIC = − 4414.80) with most variability explained (SD intercept = 1053.43; SD residual ≈ 0). The paired t-test indicated that dalbavancin was significantly more expensive than linezolid PO (mean difference = US$420.81; t(87) = 8.38; p < 0.0001).

Dalbavancin Versus Daptomycin IV (Long Duration) Analysis

In long-duration treatments, the linear mixed-effects model demonstrated adequate fit (AIC = 1489.405; BIC = 1499.22), with significant variability captured by random effects (SD intercept = 1019.96; SD residual = 1175.313). The longest anticipated duration was significantly associated with cost avoidance favoring dalbavancin (estimate = 150.69, p = 0.0029). The paired t-test showed that dalbavancin was significantly less expensive than daptomycin IV (mean difference = − US$3523.76; t(87) = − 8.19; p < 0.0001).

Dalbavancin Versus Linezolid PO (Long Duration) Analysis

For long durations, the linear mixed-effects model had good fit (AIC = − 4677.992; BIC = − 4668.174) with minimal residual variability (SD intercept = 3606.671; SD residual ≈ 0). The longest anticipated duration was significantly associated with cost avoidance favoring dalbavancin over linezolid PO (estimate = − 28.24, p < 0.0001). The paired t-test demonstrated that dalbavancin was significantly less expensive than linezolid PO (mean difference = − US$1152.57; t(87) = − 7.27; p < 0.0001).

Discussion

Our financial and budget-impact analysis evaluated net reimbursement of outpatient and ED patients receiving dalbavancin at our institution and compared modelled drug acquisition costs between dalbavancin, daptomycin, and oral linezolid. In our cohort, net reimbursement averaged US$3,500 and 58% of encounters realized a positive net, drug-specific reimbursement. We excluded certain populations, including those without insurance, as this population may qualify for, or allow, the facility to apply for payment-assistance programs. This conservative approach underestimates the true financial impact of dalbavancin utilization. Facilities weighing the financial implications of implementation of long-acting lipoglycopeptide protocols should evaluate their true cost per dose less anticipated mean reimbursement.

Outpatients in our facility diagnosed with ABSSSI and OM are often treated with daily daptomycin or twice-daily oral linezolid due to the logistical ease of administration and comparable efficacy [20]. We analyzed the projected difference in drug acquisition cost to the healthcare system if the patients in our cohort who received dalbavancin had received daptomycin or linezolid instead. Average wholesale acquisition cost difference compared to daptomycin was approximately a potential loss of US$427.64 to a gain of US$12,557.94 based on duration of treatment and indication (see Table 4). Similarly, average cost avoidance compared to oral linezolid ranged from a loss of US$829.28 to possible gain of approximately US$4,370.32 (see Table 5). These analyses suggest that dalbavancin offers significant acquisition cost advantages over IV daptomycin in both short and long treatment durations and over linezolid PO in long durations. The anticipated duration of treatment is a significant predictor of cost avoidance, particularly favoring dalbavancin for longer durations. Reimbursement policies and dosing strategies also play critical roles in determining potential net profit and cost effectiveness.

Table 4.

Average cost (in US$) avoidance between dalbavancin and IV daptomycin for short-term and long-term regimens by indication

Indication	Cost avoidance (dalbavancin vs daptomycin IV, short); mean	Cost avoidance (dalbavancin vs daptomycin IV, long); mean
ABSSSI	− $427.64	$484.89
DFI	$333.72	$4138.68
DFI/OM	$211.64	$10,615.83
OM	$5344.37	$12,557.94
SA	$350.36	$4789.48

ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, IV intravenous, OM osteomyelitis, SA septic arthritis

Table 5.

Average cost avoidance between dalbavancin and oral linezolid for short-term and long-term regimens by indication

Indication	Cost avoidance (dalbavancin vs linezolid PO, short); mean	Cost avoidance (dalbavancin vs linezolid PO, long); mean
ABSSSI	− $563.20	$105.32
DFI	− $414.64	$1145.24
DFI/OM	− $829.28	$4370.32
OM	$1250.56	$4370.32
SA	− $829.28	$1250.56

ABSSSI acute bacterial skin and skin structure infection, DFI diabetic foot infection, DFI/OM diabetic foot infection with osteomyelitis, OM osteomyelitis, PO by mouth, SA septic arthritis

A study evaluating long-acting lipoglycopeptides in the inpatient and outpatient setting calculated a US$30,500 to US$55,831 total health-related cost difference per patient compared to SOC. The authors denoted a nearly US$5000 difference in total antibiotic cost per patient [3]. Infections, such as OM, requiring longer treatment durations, may realize the greatest financial impact. Facilities with lower acquisition costs, including group purchasing or federal drug purchasing contracts may realize greater value.

Dalbavancin utilization also has the potential to shorten or avoid hospitalization for patients with no other compelling indications for continued admission other than antibiotic therapy. Recent literature estimates a LOS difference of 2–14 days between patients receiving long-acting lipoglycopeptides compared to SOC [3, 21]. Streifel and colleagues estimated 617 preventable hospital days and associated US$1,400,000 savings among 37 dalbavancin-treated patients [22].

One strength of this analysis is in the methodology, which can serve as a model for institutions to evaluate the financial impact of dalbavancin utilization. However, our study is not without limitations. Results may not apply to settings that follow another purchasing model, with differing healthcare insurance programs, and in resource-diverse settings, especially outside of the USA. Certain study variable limitations should be considered when interpreting the presented results. First, drug acquisition costs and contracting vary greatly among institutions. Second, the reimbursement landscape is complex and constantly evolving. We attempted to evaluate drug-specific reimbursement when available. However, managed care formularies and reimbursement tiers are multifaceted and these results could vary significantly between facility types, service location, payers, and case-mix indices. Third, we excluded patients who may have qualified for drug replacement or payment assistance programs as we felt this was outside the scope of our current evaluation. A previous publication illustrates the impact of a dalbavancin vial-replacement program in decreasing direct (US$2758 vs US$4010) and indirect costs (US$2913 vs US$3646) compared to SOC antibiotic therapy in self-pay patients with ABSSSI [23]. Fourth, we generalized a model of comparator drugs, doses, and durations. There are critical clinical implications in selecting each of these aspects, though our current evaluation sought to provide a contextualized estimate of the potential financial impact [4]. The scientific data supporting these therapies continue to evolve, particularly using multi-dose dalbavancin for complicated infections. However, we considered the data applicable and relevant at the time of this study. These factors should be considered when institutions evaluate the appropriateness of dalbavancin therapy and the applicability of our findings.

Conclusion

Our study showed that dalbavancin utilization in the outpatient setting at a community medical center resulted in net positive reimbursement during the study period. Our study demonstrated a potential acquisition cost-avoidance opportunity by using dalbavancin in the treatment of complicated infections as compared to daptomycin and linezolid. These results support development and implementation of an algorithm delineating potential candidates for treatment with dalbavancin. Prospective studies assessing costs associated with avoidable admissions with dalbavancin therapy would further solidify the role of this antibiotic in outpatient and ED management of Gram-positive infections.

Funding

No financial support was received for the conduct of this study, or for the preparation or publication of this manuscript.

Declarations

Conflict of interest

The authors have no competing interests to declare that are relevant to the content of this article.

Author contributions

All authors contributed to the study conception and design (KR, BC, OC, MP, and MP). KR, BC, and MP performed material preparation, data collection and analysis. OC completed statistical analyses. KR and BC wrote the first draft of the manuscript and all authors critically appraised previous versions of the manuscript (KR, BC, OC, MP, and MP). All authors read and approved the final manuscript and agree to be accountable for the work.

Ethics approval

The Cooperman Barnabas Medical Center Institutional Review Board and the Clara Maass Medical Center Institutional Review Committee approved this retrospective study [study ID 20-10cmmc].

Consent to participate

The Cooperman Barnabas Medical Center Institutional Review Board and the Clara Maass Medical Center Institutional Review Committees approved a waiver of informed consent due to nature of study design.

Consent for publication

Not applicable.

Availability of data and material

Available upon reasonable request to K. Raja.

Code availability

Not applicable.