Operational costing of inpatient orthopaedic services at the Helen Joseph Hospital
Date
2012-01-17
Authors
Bogoshi, Gladys Magugudi
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Abstract
BACKGROUND: Until recently budget allocation for public hospitals in the
Gauteng Province were based on the historical values and not on the costed
activities. It is therefore unknown how much of the allocated budget is used
per discipline in an institution. Because of recurrent over expenditure by
institutions, Gauteng Department of Health and Social Development have
decided to change policy for budget allocation of funding public health
facilities from historical allocation to activity based costing. Although good
financial management of hospitals is a priority for the government, data on
real costs of providing health care services is scarce and unreliable. No formal
study has been done to estimate the cost to provide inpatient services in the
Helen Joseph Hospital, a regional hospital in the Gauteng Province. In view of
that, it was decided to initiate this study at the Orthopaedic unit of the
Hospital, which would then be extended to the other units.
AIM: To estimate the caseload, profile of patients and operational cost of
providing the inpatient orthopaedics services at a regional hospital in
Gauteng.
METHODOLOGY: A cross-sectional study design was used based on
retrospective review of patients’ and hospital records of patients admitted
during one month study period at the two Orthopaedic Ward in the Helen
Joseph Hospital, situated in the Johannesburg Health District in the Gauteng
Province.
RESULTS: Total number of patients admitted in the Orthopaedic Unit of the
Hospital in the year 2009/2010 was 2160 (The mean number of inpatients per
month was 180 ± 28).
Profile of patients
One hundred and ninety seven patients were admitted during one month
study period. There were more male than female patients. The median age
was 41 years (IQR 31-53 years). More black patients were admitted during
this period, even though the main catchment population for the Hospital is
predominantly white and coloured. The majority of patients were from a low
socio-economic class as reflected by their classification for user fee payment using the means test. The median inpatient day was 3. The most common
cause of admissions is due to injury, poisoning and certain other
consequences of external causes as expected in an Orthopaedic Ward. A low
complication rate (4.5%) was found to be the lowest as compared to other
units in the Hospital. The majority of patients were discharged.
Cost drivers
The major cost driver was human resource which accounted for 70% of the
total expenditure. Other cost drivers were material resources used in the unit,
which includes: laboratory, blood and blood products, radiology and
pharmaceuticals. Expenditure on these items account for only 13.7% of total
expenditure.
Cost driver Amount Unit cost
Laboratory R61,215.57 R412.26
Blood and blood products R53,164.41 R269.87
Radiology R52,085.50 R264.39
Pharmaceuticals R17,315.82 R87.90
The total expenditure during this period was R 1,481,363.30 or R
17,776,359.60 annually. The unit cost of laboratory services (Ward 4: R926.30
and Ward 5: R272.97), blood and blood products (Ward 4: R463.05 and
Ward 5: R217.52), radiology (Ward 4: R659.97 and Ward 5: R157.20) and
pharmaceuticals (Ward 4: R236.63 and Ward 5: R47.60) and varied
significantly between Ward 4 and Ward 5 which might be due to difference in
clinical practices between the two Wards.
CONCLUSION: This study showed the operational costs needed to provide
an inpatient orthopaedic service at a regional health facility. Further study
based on more detailed costing at individual patient level is necessary to
develop a better understanding of costing at these Wards. This study
highlighted the significance of understanding the importance of determining
the actual costs needed to provide an inpatient service in a health facility.
Simple cost analysis method could easily be done at Unit/ Ward level to
provide more insight to Hospital managers who are always criticized for overexpenditure.