Cost analysis for hospital care : the case of Embaba Hospital, Cairo, Egypt

The main objectives of the study were to estimate the actual cost of a service delivered by each medical department of the hospital; to develop a clear and appropriate methodology for calculating the service cost at the other hospitals that will be the target of the Cost Recovery for Health Project: and to create a solid base for a pricing system for medical services delivered by hospitals run by the Ministry of Health in general and by Embaba Hospital in particular. To achieve these objectives, the organizational structure of Embaba Hospital was studied; the jobs carried out in each hospital department were reviewed: the interrelationships among the departments were analyzed to determine patterns of resource utilization; and the use within the hospital of the services of individual departments was mapped. Five major categories of cost were examined to estimate the total expenditure of the hospital: buildings and permanent structures, equipment, personnel, utilities, and materials and supplies. All costs of operating the hospital were allocated to the departments, which were identified as either overhead, intermediate service, or final service departments. The study found that overhead, intermediate service, and final service departments account for 11, 41, and 48%, respectively, of total hospital-wide costs. The cost of materials and supplies consumed by the departments was found to be the prime determinant of the sharp variation in cost among departments. Personnel costs also were found to differ substantially across departments. (Author abstract)