COSTING OF PUBLIC SECTOR HOSPITAL SERVICES; A

PROVIDERS PERSPECTIVE

Abstract
In order to resolve the challenges of financial constraints faced in the utilization of health
care services, governments has to provide safety nets to the masses. The essential first steps
includes generating first hand evidence on provider's cost of provision of health care services.
Taking the example of Pakistan where the public sector hospitals are the major expenditure items
of public healthcare resources, there is lack of knowledge on the costs of the healthcare services.
This study aimed at calculating the hospital costs under various cost categories of major
illness reported at the public sector hospitals of province Khyber Pakhtunkhwa. Given the
challenges with data maintenance at these hospitals, an exclusive methodological framework was
developed incorporating techniques including extrapolation of data, calculation of replacement
costs and normative approach etc. The study broadly under took a retrospective bottom -up micro
costing methodology and documented the specific resources used to deliver a narrowly defined
service or to treat a particular type of patient for the financial year 2015-16. The evidence generated
from the framework includes the top five common illnesses in the target specialties of pediatrics,
gynecology, surgery & internal medicine. Average cost per illness (under specific cost categories),
average length of stay (ALOS) of the patient per disease group and bed occupancy rates were also
calculated. A comparative cost analysis was also done in order to draw inferences regarding
variations in the cost structures in the target DHQs.
Final calculations revealed that in the target specialties of Pediatrics and Medicine,
Gastroenteritis was found to be a common ailment in all DHQs where DHQ Chitral incurring
lowest cost per patient i-e Rs. 2075. In the Gynaecology department, Normal Delivery, C-Section,
Septic Wound (Labour), UTI in Pregnancy and missed abortion were found similar diseases. The
highest Average Cost is calculated for C-Section in DHQ Mardan i-e Rs. 12,759 whereas DHQ
Chitral is incurring a cost of Rs. 8,062 for conducting the procedure. In the surgical department,
RTA (injuries & fractures), appendectomy & cholecystectomy were found similar ailments. The
highest cost is calculated for DHQ Mardan for conducting appendectomy i-e Rs.6,280 whereas
the average cost is incurred in DHQ Chitral which is calculated as Rs. 4,231.
The findings of the study showed that the cost structures and cost drivers widely vary due
to factors including the number of human resources & their salary scale in each specialty, the level
of facilitation at each hospital, differences in utility costs, out of pocket spending by the patient
and average length of stay per illness. This research will serve as a baseline study for evaluating
cost structure which, apart from generating a package cost can also be further used for strategic
planning at the policy level for other health care financing interventions.