Unit cost analysis and assessment of the pay back of service provision at Tikur Anbessa Specialized Teaching Hospital, Ethiopia

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Addis Ababa University


Background: Health care expenditure is increasing worldwide. Determining the unit cost of medical services is one part of economic analysis which helps to improve efficient use of scarce resource. It is also a vital indicator needed by managers and policy makers. Most of the health institutions in our country have not yet properly established clear methods to calculate unit cost and set the service price. Objective: This study is conducted to explore the unit cost of health services provision and assess the payback at Tikur Anbessa Specialized Teaching Hospital(TASTH), Addis Ababa Ethiopia. The study has been conducted for the period of July 2017 to June 2018. Methods: Afacility based cross-sectional unit cost analysis has been conducted in order to identify the unit cost and compare it with the price. The top-down costing method wasapplied to calculate and allocate the overhead and intermediate cost centers to the final cost centers of TASTH for the year 2017/18GC (2010 EFY) froma provider perspective. Micro-costing method was applied to calculate unit cost of each service inthe final cost centers and, thecost was compared with the current hospital service charge. The average and range of different serviceunitscost, priceand Cost to recovery ratio (CRR)was calculated for further analysis. The study covered 273(22%)selected services out of the total 1,212services in the hospital. The costs data were calculated using Microsoft Excel 2010. Results:The average unit cost of different diagnostic services is 276.03ETB (range24.55-800.4), whereas the average unit price is 108 ETB with (MIN-MAX) that is (4-800). The average unit cost for different inpatient services is 813 ETB (range 51.4-3676.6) and the average unit price is 104ETB with a (MIN-MAX) that is(10-350). The average unit cost for outpatient services is 124.99, but the average price is 11.13 with (MIN-MAX) that is (5,30). From the total services analyzed 57(21%) of them have a no price sated, 157(58%) of them have CRRbetween(1% to25%), 27(10%) of them have CRR between 26% to 50% and 14(5%) of themhave CRR between(51% to 100%). Conclusion:The current study implies that costs of service provisions are considerably higher as compared to the corresponding services especially for Outpatient and inpatient services the CRR is only 9% and 13% respectively. The hospital administrative bodies and other concerned bodies should take measures in order to reduce the gaps between cost anduser fees so as to maintain financial sustainability of the hospital without compromising access to services for the poorest segment of the population.



Unit cost; Medical services,Top-down costing,andMicro-costing.