How much do health services cost? Findings from three districts

1. How much do health services cost? Findings from three districts Annual Health Forum BMICH 9th-10th February 2007 Dr. Ravi P. Rannan-Eliya Institute for Health Policy http://www.ihp.lk/

2. Outline • Study TOR & Goals • Approach & Scope • Methods • Problems encountered • Results • Implications • Policy • Future monitoring

3. Mandate and HPRA TOR • Original TOR: • To measure public and private sector unit costs in three districts • Colombo, Badulla, Matale • By levels of facilities • Modified TOR: • To measure unit costs in public sector by levels of institutions, and unit prices in combined private sector

4. General Approach & Scope • Public sector • Cost survey of government health facilities • Three districts only • Private sector • National surveys of private sector hospitals, laboratories and doctors • All districts

5. Public Facility Cost Survey • Design of MoH-IHP Public Facility Cost Survey 2006 • Based on previous Sri Lanka Public Facility Surveys (1992, 1997) to minimize development costs and maximize reliability by learning from previous experience • General method • Stratified sample survey in the three districts • Field investigators used to collect data on activities and expenditures in each facility, supplemented by: • Central MoH/Treasury data for MoH hospital expenditures • Regional drug stores data for medical supplies • Provincial/district office records for salaries/overtime • Analysis of data using statistical software

6. MOH-IHP PFS Sampling • Sample = 81 (Colombo - 30, Badulla - 28, Matale - 23) • 69 hospitals/dispensaries, 12 MOOH units • Response rates - 100% overall, >90% for most data

7. MOH-IHP PFS Data Collection • Service activities • Questionnaire used to collect data on service outputs in 2005: • Inpatients, outpatients, operations, X-rays, lab tests, etc. • Supplemented by IMMR returns where available • Dependent on responses from key informants • Time allocations of staff • Questionnaire used to collect estimated time allocations of key staff groups • Doctors, nurses, labourers, attendants, lab staff • Expenditures • Budgetary totals obtained from hospital directors • Salary budgets re-estimated using staffing numbers where responses not reliable • Overtime and other data collected from district and provincial offices • Medical supplies based on MSD data, and sample survey of drugs dispensed in each facility • Treasury data used for line ministry hospitals

8. MOH-IHP PFS Problems • Non-line ministry facilities generally not responsible for budgets, so usually lack reliable information on actual budgetary expenditures • Salary expenditures data not easily accessed at low level facilities • Needed to supplement using other data sources • Drug expenditures not responsibility of facilities • Budget held by MoH MSD, estimates prepared by PDoHs • MSD computerised inventory system only tracks supplies to regional drug stores. Further distribution to facilities not computerised, and no easily accessible data on actual drug expenditures by facility • Reliability of IMMR returns in question in many facilities

9. Private sector price surveys • Surveys conducted of private hospitals, private laboratories, private ambulance companies • Survey of prices of private doctors found not to be feasible owing to reluctance of doctors to cooperate or provide accurate data • Response rates for private hospitals and laboratories high, but not for other surveys • Survey problems • Private hospital respondents often did not understand or keep track of “average length of stay” or average bed occupancy • Inconsistencies between revenue and activity data suggested reporting errors with many hospitals • Non-responses and identified data errors handled using imputation techniques

10. How do unit costs vary at different levels? How do unit costs vary by district?How do private sector prices compare? Findings

11. Bed-day costs by facility type MOH-IHP Public Facility Survey 2006

12. Admission costs by facility type MOH-IHP Public Facility Survey 2006

13. Outpatient costs by facility type MOH-IHP Public Facility Survey 2006

14. Chest X-ray costs by facility type MOH-IHP Public Facility Survey 2006

15. Admission costs by district MOH-IHP Public Facility Survey 2006

16. Outpatient costs by district *Private sector = Rs 200-300 MOH-IHP Public Facility Survey 2006

17. Medical officer overtime costs by district (Rs per month) MOH-IHP Public Facility Survey 2006

18. Public-Private Comparison:Admission costs, small hospitals Bed size < 70 MOH-IHP Public Facility Survey 2006

19. Public-Private Comparison:Admission costs, large hospitals Bed size > 70 MOH-IHP Public Facility Survey 2006

20. Public-Private Comparison:WBC/DC Costs

21. Public-Private Comparison:Chest X-ray Costs

22. Key Findings (1) • Variation in unit costs between districts is not great • Significant variation in unit costs between individual facilities, but largest variation is between levels of facility • Unit costs in public sector increase uniformly in all districts by level of hospital • Costs increase by level with longer admissions, greater levels of service provision, more complex case loads • Unit costs by themselves do not indicate inefficiencies. Must also look at case complexity, services provided, location and demand profile, etc.

23. Key Findings (2) • Public sector costs generally the same or lower than in private sector • Need to consider purpose of exercise: If concern is contracting-out, then overhead costs should be excluded • Admission costs in private sector significantly higher than in public sector • No compelling evidence that contracting routine clinical services out will produce significant cost savings - opposite might be true • Actual overtime costs appear to be significantly less than implicit liabilities • Variation in overtime costs may be due to many factors, including availability of overtime budget

24. Issues • What is purpose of exercise? • Need to clarify in order to interpret data • Unit costs may be useful at facility level, not at district • BUT … unit costs alone are not good measure for assessing facility efficiency or performance, see UK NHS experience • Feasibility • Measurement difficult owing to lack of routine financial data at level of institutions - need for surveys • Short term priority should be improving information system • Use of IHP-MOH PFS 2006 data • Survey is potentially valuable data source for examining determinants of facility efficiency in combination with other information • Further analysis should be done by IHP/MOH • Results should be fed back to individual facilities