Cost analysis of Mirwais and Nangarhar regional hospitals in Afghanistan

Abstract

This study analyzes total costs and unit costs of inpatient and outpatient services of Mirwais and Nangarhar Regional Hospitals for 1390 (March 21, 2011 to March 20, 2012). Both hospitals were divided into three main cost centers: general, ancillary and clinical departments. The step-down approach was used for allocating costs of general and ancillary departments to clinical departments. The total cost of each hospital was estimated and then the unit costs for inpatient and outpatient departments in each hospital were found. The study shows that although the Mirwais hospital had a lower number of beds and a lower utilization rate than Nangarhar hospital, but it had higher total costs, and in general higher unit costs. The study shows that 90% of the total cost of Mirwais hospital and 86% of Nangarhar hospital were IPD costs. The remaining 10% and 14% respectively were OPD costs. The cost per bed day in OB/GYN department in both hospitals was the highest. The cost per visit (OPD) in Tuberculosis OPD department is the highest in Mirwais hospital while it was General Surgery OPD department for Nangarhar hospital. The capital expenditures had higher effect on OB/GYN IPD in both hospitals and Tuberculosis OPD department of Mirwais hospital. In both Mirwais and Nangarhar hospitals drug and pharmacy costs accounted for the greatest part of the total costs: 46% and 50% of costs respectively. Based on casual observation of the health system of the country, foreign drugs are mostly used. The hospitals can reduce the unit costs of services by increasing using domestic drugs. The hospital also can extend usage of the equipment.