Cost Projections for the Complementary Package of Activities - basics

The normative cost per service can be measured as the cost per inpatient day equivalent (IDE),which uses a combination of inpatient bed days and outpatient services. Based on the modeledcosts, the cost per IDE would range from $13.19 at a 60-bed CPA 1 hospital to $17.53 at a 100-bed CPA 3 hospital. The cost per IDE of a CPA 3 hospital would be less for larger hospitals dueto economies of scale. At the same 60-bed CPA 1 hospital, assuming an Average Length ofStay (ALOS) of 4.6 days this would translate to an average cost of $60.70 per admission. At the100-bed CPA 3 hospital with an ALOS of 7.3 days the average cost per admission would be$127.96.The HSP 2 targets could not be translated into specific hospital targets for all services. The HSP2 costing assumed that increases in hospital services would be necessary but that these couldbe provided to some degree through greater and more efficient use of existing capacity. Thisseems reasonable since there is a significant gap between the average BOR of 68% for all CPAhospitals in 2007 and the optimal BOR of 85%, meaning that more inpatients can be treatedwithout having to increase the numbers of beds. Lowering the average ALOS from the nationalaverage of 7.4 days in 2007 to the rates achieved in the sample of contracting hospital wouldallow even more inpatients to be treated.However, the additional cost of bringing the resources of the existing hospitals up to thenormative levels would be significant, especially for staffing. For example, Ang Roka Hospital, a60-bed CPA 1 hospital in Takeo Province, had a BOR of 84% and an ALOS of 4.6 days in 2007and was already operating at close to optimal capacity. However, it only had 26 staff and spent$175,231 in that year, whereas according to the norms it should have had 59 staff and a budgetof around $258,000.As another example, Prey Chhor Hospital, a 70-bed CPA 1 hospital in Kampong ChamProvince, had a BOR of 61% and an ALOS of 6.3 days in 2007. It had 28 staff and spent$170,160 in that year, whereas for the number of services that it provided it should have had 54staff and a budget of around $227,000. If it operated at 85% capacity and reduced its ALOS to4.6 days (the level at Ang Roka) it would treat almost twice as many inpatients but would require65 staff and a budget of around $290,000.The funding for the sample of contracting hospitals used for this study came from a variety ofsources. Between 67% and 83% of the funds came from the Government, most of which was indrugs and supplies. User fees, health equity funds and health insurance made up between 12%and 24% of total funding. Direct donor assistance made up between 5% and 9% of totalfunding. A portion of the Government funding and the health equity funds are also donorfunded. Depending on the ability of the Government to finance the increased costs, it is likelythat a significant portion of the increased funds needed would have to come from user fees andinsurance and from donors, at least in the short term.Both the actual 2007 costs and the normative costs estimated in this study are significantlyhigher than the costs used in HSP 2 and in the second child survival costing study, and may behigher than figures used in estimating the cost of the reproductive health, HIV/AIDS and TBstrategic plans. The strategic plan costs need to be reviewed and, if necessary, adjusted.This costing model can be used to estimate a budget for any referral hospital. However, it isimportant to note that the costs are rough estimates. The following recommendations are maderegarding improving the quality of this information.iii