Estimating cost ratios and unit costs of public hospital care in South Africa revisited

Abstract

Background: Reliable hospital unit cost estimates are limited in developing countries. Usually a simple rule of thumb based on the  assumption that the cost of an outpatient visit is equivalent to a fixed proportion of the cost of an inpatient day is used to disaggregate  unit costs. The objectives of the paper are to obtain the ratio of cost of an outpatient visit to an inpatient day,and the associated unit  costs for different levels of public hospitals in South Africa.

Methods: Four levels of public hospitals were considered. A simplified model was used on data from the South African District Health  Information System to compute the ratio of the cost of an outpatient visit to an inpatient day and the associated average financial costs  at each hospital level.

Results: An outpatient visit costs about 0.37 (district hospitals) to 0.64 (specialized hospitals) of an inpatient day.  Also the average financial cost of a visit (an inpatient day) ranges from R313 (R487) –district hospitals to R810 (R1441) – central or  provincial tertiary hospitals.

Conclusions: The ratios of unit cost of outpatient to inpatient utilization used in computing the unit costs vary  across public hospital levels in South Africa. The need to continually update these ratios and unit costs is noted.