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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/604

Title: DETERMINANTS OF HOSPITAL COST IN ADDIS ABABA
Authors: ABDULELETIF, MOHAMMED
Advisors: DAMEN H/MARIAM (MD, MPH, PHD)
Copyright: 2007
Date Added: 19-Apr-2008
Publisher: Addis Ababa University
Abstract: ABSTRACT Background: The share of public sector health resources in developing countries consumed by hospitals ranges from 50 to 80 percent. Multiple constraints and expanding demands have revealed the limits of governments’ reach and so reducing the role of the government, enhancing that of the private sector, or both, are policy questions based on the notion that private ownership entails mechanisms which promote economic efficiency. In order to promote economic efficiency and to decide which outputs are best delivered in hospitals and to examine the trade-offs between various services, it is helpful to know how hospital cost functions are influenced by output levels and other variables. Objective: The objective of this study was to identify and estimate the effects of determinants of costs for a sample of government and private hospitals in Addis Ababa. Methods: A cross sectional study was conducted from Jan 2007 – March 2007 in Addis Ababa with in purposively selected hospitals. All facilities with complete information on the study variables for the financial years 2003-2005 were considered. This gave a sample of 30 hospitals generating 41 observations for assessing the determinants of costs. Interview with key informants and document review were conducted. Translog – like cost function was specified and estimated using ordinary least squares (OLS). Results: According to the results of the study number of beds and number laboratory tests done had a positive and statistically significant effect on total cost. The volume of outpatient activity, as measured by the number of first outpatient visits to the hospital had a statistically significant and negative impact on total cost. Calculated marginal costs had economies of scale for the number of first outpatient but had diseconomies of scale for the number of laboratory tests done. A negative and statistically significant coefficient associated with the interaction term for inpatient and outpatient output indicated the existence of economies of scope between the number of inpatients and the number of first outpatient visits. Conclusion: The results of studies performed on hospital costs in Ethiopia are too limited to provide definitive guidance for policy. However, the estimated results imply that it is efficient to combine outpatient and inpatient care at the same facility and also it is more efficient to have one large hospital rather than two small ones. Additional empirical investigation is warranted.
Description: A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES OF ADDIS ABABA UNIVERSITY IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS IN PUBLIC HEALTH DCH, AAU
URI: http://hdl.handle.net/123456789/604
Appears in:Thesis - Public Health

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