For evidence based decision making. helpfull for public health officials in planning in advance & reach desired goals . In era of health insurance acceptable levels of unit costing by bottom up approach . In addition comparing private to public also identifies the gaps that can be adddressed.

1. Rupee Cost
Accounting of
Cesarean Section.
In Public Health
institution Vs Private
Hospital .
(A Comparative Study.)

2. 1. Knowing the cost of health care services is a
prerequisite for evidence-based management and
decision making.
2. With a substantially increasing number of facility-
based births in Rajasthan, costing data for efficient
and fair resource allocation is required.
3. This study evaluates the costs for cesarean section (CS)
at a public and a private hospital in Rajasthan.
4. The study provides detailed costing data to inform
decision makers and can be seen as a stepping stone
for further costing exercises.
Purpose

3. Methodology
1. We performed a full cost analysis, i.e., we calculated the
respective unit costs from the provider’s perspective.
2. We distinguished variable costs, fixed & step-fixed and
followed an activity-based costing approach. The processes
were determined by observation of CS-patients and all
procedures.
3. The resource consumption was calculated based on the
existing accounting documentation, observations, and
time-studies.
4. Afterwards, we did a comparative analysis between the two
hospitals and performed a sensitivity analysis, i.e.,
parameters were revisited to cater for uncertainty.

4. Variable costs
Variable costs include drugs and consumables that were
directly used for when preparing a patient for a CS in
OT and wards.
1. It also included Diagnostic consumables,Echography,
sterilization unit, and patient’s food.
2. The consumption per CS patient was determined by
direct observation, complemented with information
collected from patient files and the ward’s order
sheets.
3. All consumed drugs and materials were costed using
price lists provided by the hospital’s pharmacy and the
warehouse.

5. Fixed costs
Fixed costs include the cost of depreciation for buildings and
equipment and staff overheads and other overhead
costs.
1. Linear depreciation was used with a lifespan of 25 years for buildings, 5
years for minor electronic equipment like computers, 15 years for
mechanical equipment, and 10 years for all other equipment.
2. Allocation of fixed costs to CS patients was calculated by multiplying the
fixed costs with a factor reflecting the share of expenses for CS patients.
3. Allocating factors used were the share of CS patients to the total number
of surgeries , laboratory tests, imaging and sterilizations, inpatient days
in the specific wards, and the hospital. (Data were obtained from the
hospital accountant.)

6. Step fixed costs are a special case of fixed costs. They remain constant until
a certain capacity level is reached, then they jump up on a higher cost level.
1. This cost category includes the cost of medical personnel, like medical doctors,
midwives, nurses, and anesthetists. (The gross salaries for each staff category
were obtained from the hospital’s administration).
2. While fixed costs remain constant irrespective of the number of CS,
variable costs correlate with the number of CS. Step fixed costs start as
normal fixed cost. However, as soon as a certain threshold (T1) is
reached, they jump to a higher level.
Afterwards, they behave again like fixed costs until they reach another threshold
(T2). Usually, the thresholds are the capacity limits, such as the
working capacity of one staff member.

7. Graph Illustrates the three different cost
concepts.

8. We followed activity-based costing involving the following steps:
(1) Determining direct payments per activity on the process by
analyzing accounting documentation (e.g., drugs, materials).
(2) Determining time consumption per activity on the process
by time-study (e.g., working time of nurse-midwife per CS).
(3) Determining the indirect cost per CS by allocating overheads
to the process.
Analysis

9. Key Variables Private Hospital Public Hospital
Number of beds 60 100
Number of patients
outpatient 32,219 31,387
inpatient 3293 13,155
Patients at the maternity
ward
1054 4273
Patient days at the maternity
ward
1921 15,386
Number of employees 221 188
Funding
User fees; overseas
donations; Health Insurance
(MMCSBY,RGHS etc)
Government budget; user
fees(till April-22)
Research Setting

10. Data Sample and Cost Categories
Costing Terminology Definition Example
Cost Monetary value of resources consumed to produce
a certain output
Monetary value of resources consumed to treat
patients with Cesarean section (CS)
Variable cost Costs that vary with output Drugs and materials
Fixed cost Costs that do not vary with output
Depreciation for buildings and equipment,
overhead costs
Step fixed cost
A cost that does not change within certain high and
low thresholds of activity, but which will change
when these thresholds are breached
Cost of personnel(HR)
Total cost Aggregation of all types of costs for all outputs in a
certain period
Cost of treating all patients with CS
Average cost Cost of all units divided by number of outputs Average costs of treating one patient with CS
Marginal cost Cost of one additional unit Cost of treating one additional patient with CS
Unit cost Cost per unit of output. Unit costs can refer to
average unit cost and marginal unit cost
Cost of treating one patient with CS
Cost function A formula used to predict the cost that will be
experienced at a certain activity level
Activity based costing
A costing method that divides the total production
process into a number of activities and calculates
the cost of each activity
Cost center Place where costs occur Ward, theatre, administration, …
Service cost centers Cost centers without direct contact to the product Administration, kitchen, facility management

11. Allocating Time
1. The average time spent per CS patient was obtained, from preparation for
surgery until the completion of post-operative monitoring.
(This included 2 patients at the public hospital and 1 patients at the private hospital. Additionally, the observer observed the time
spent on patient care after surgery.)
2. Besides the tasks for direct patient care, midwives and nurses
perform tasks at the ward that are not directly attributed to a
specific patient.
(For instance nurses need working time to organize their daily work, to hand-over responsibilities to the next
shift, and to do general documentation of all patients). The time consumed by these tasks cannot be allocated to
one individual patients.
3. Consequently, the respective time was allotted to all patients according to patient-staff ratio as is common in activity-based
costing .
4. The total time needed for a day of CS patient care was then calculated as the sum of
the time for all process steps required for the daily care of a CS patient.
The time spent per CS patient per day was then multiplied by the average
length of stay (ALOS)—minus one day, which concerns the day of CS that
was calculated separately—to indicate the time for all care given at the
wards. + Plus time spent during the discharge day was added to the ALOS to
determine the total time for patient care.

12. Patients’ and Procedural Characteristics Private Hospital Public Hospital
CS-rate 22.7 18.8
Type of CS(%)
elective 26 0
emergency 74 100
Reason for CS(%)
fetal distress/CTG non reassuring 32 8
no progress/failed induction 21 10
breech/transverse presentation 18 17
previous CS 11 15
cephalon-pelvic disproportion 3 25
other 18 24
ALOS (days) 3.4 7.4

13. At Private hospital, 25% elective CS and the remainder had emergency CS.
The main reasons for CS at the private hospital : foetal distress (32%), no
progress (21%), and breech or transverse presentation (18%)
Public hospital, the main reasons were cephalon-pelvic disproportion (25%),
breech / transverse presentation (17%), or a previous CS (15%).
At the private hospital, 76% of CS patients were discharged after three days.
Patients staying more than five days usually arrived several days before CS
due to complications during pregnancy (e.g., pre-eclampsia).
At the public hospital, ALOS was seven days, with 39% staying
more than seven days and 19% more than nine days. The calculated ALOS
was 3.4 days at the private hospital and 7.4 at the public hospital.
Costing
At the private hospital, patients spent 01:44:29 h (standard deviation
(SD) ± 00:25:17 h) in the OT, while this was 00:54:09 h (SD ± 00:10:45 h)
in the public hospital. .

14. Time per CS Private Hospital Public Hospital
Time of patient in OT 01:44:29 h 00:54:09 h
Time spent by doctors
senior obstetricians 02:06:12 h 01:17:20 h
junior obstetricians 04:49:09 h -
Anesthetists 02:03:35 h Variable
Pediatrician 01:21:46 h -
Intern doctors 02:12:29 h -
Time spent by other OT
staff
circulating nurses 02:19:11 h 02:08:16 h
Time spent by ward staff
midwives 13:49:38 h 08:21:46 h

15. The different staffing levels and time requirements for a CS patient result in the
different staff’s capacity to perform CS.
Private Hospital Public Hospital
Cost Category Monthly Capacity
Unit Cost
Per Case
Monthly
Capacity
Unit
Cost
Per
Case
obstetrician 20.3 4000 28.9 5000
Anesthetist 68.3 3000 - 3000
Pediatrician 10.2 2000 - 2000
Anesthesia nurse 38.1 500 84.15 850
Scrub nurse 40.3 500 109.4 450
Circulating nurse 39.4 500 83.0 500
Midwife 2.5 440 4.4 322
Total 10940 12122
Monthly treatment capacities and unit costs per staff member.

16. For variable costs, the private hospital spent Rs. 27,200 ( per CS patient,
compared to Rs. 4,480 at the public hospital. At the private hospital, 49.6%
of variable costs per CS patient were made up of drugs and 18% lab tests;
at the public hospital, 35.71 % was for drugs and 17.41 % materials.
Total Variable Cost Per CS
Private Hospital
Rs (%)
Public Hospital
Rs(%)
Drugs 13592 (49.6) 1600(35.71)
Materials 1200 (4.4) 780 (17.41)
Laboratory tests 4908 (18) 350 (7.8)
Echography 1500(5.5) 500 (11.1)
Sterilization 2500 (9.19) 500 (11.1)
Food 3500 (12.9) 750 (16)
TOTAL 27200 4480
Variable Cost

17. Drugs Utilized in Cesarean Section/Case
S. No Name Quantity Unit Price Total
1 Ringer Lactate 500 ML 5 52.31 261.55
2 5% GDW 5 47 235
3 GNS 5 45 225
4 Catheter with urobag 1 2400 2400
5 Bupy Vacume 2 350 700
6 Spinal Needle 85 MM 4 140 560
7 Sutures Catget 2.0 1 1200 1200
8 Vicryl no 1 3 230 690
9 Catgut no 1 1 80 80
10 Betadine Loshan & Spirit 1 241 241
11 Inj. Oxytocin 4 18 72
12 Tab. Misoprost 600 micro gram 2 88 176
13 Inj. Ceftriaxone 3 2029 6087
14 Inj. Amikacin 4 98 392
15 Inj. Metrogyl 10 ML 6 10 60
16 Inj. Rentac-reglan 6 15 90
17 Inj. Diclofenac 5 15 75
18 PC Anima 2 12 24
19 Inj. Phenergan 2 12 24
Total 62 7082 13593

18. Fixed Cost
Private Hospital Public Hospital
Per Year
Share for CS Per
Month
Per Year
Share for CS Per
Month
Depreciation
buildings
1.21 Cr 78891 56358 2126
Depreciation
Equipment
37 Lakhs 50456 12.83 lakhs 36500
Overhead staff costs 2.98 Cr 94438 2.04 Cr 1.78 Lakhs
Other overhead costs 4.61Cr 73440 1.86 Cr 9.24 Lakhs
TOTAL 9.17 Cr 2.97 Lakhs 4.07 Cr 11.40 Lakhs
Fixed costs include the costs of utilities, domestic supplies, maintenance,
training, travel, transportation, exemptions from user fees,
and other expenditures.
As such, the share of monthly fixed cost for CS patients was Rs 2.97 Lakhs for
the private hospital and Rs 11.40/-Lakhs for the public hospital.

19. The average unit costs depend on the number of CS performed.
The costs per CS inversely correlated with the number of CS. The leaps in the
curves are produced by the step fixed costs.
When the maximum capacity of a unit is reached, then the step fixed costs jump to
a higher level and increase the average costs per CS.
With 18 monthly CS at the private hospital and 54 monthly CS at the public
hospital, the unit costs per CS patient were
Rs 54640 and 37602, respectively. If both hospitals performed
the same number of CS per month, the unit cost would be
less at the private hospital.

20. Average Cost Per CS Private Hospital Public Hospital
Number of Patients 18 54
Variable costs 27200 4480
Fixed costs 16500 (OT common) 21000( MCH wing )
Step fixed costs 10940 12122
Total 54640 37602
Average Cost Per Cesarean Section

21. Varied Parameter Value of Parameter
Cost per CS
private Hospital (US$)
Cost per CS
Public Hospital (US$)
Basic 683.23 472.13
Variable cost +10%/−10% 689.48/676.97 495.74/448.53
+20%/−20% 695.74/670.71 519.35/424.92
Fixed cost +10%/−10% 719.03/647.42 487.94/456.34
+20%/−20% 754.83/611.62 503.73/440.55
Time for other delivery 0.5∙CS 690.04 473.46
1.5∙CS 670.87 475.61
2.0∙CS 666.01 473.93
Time for other duties −10% 700.10 476.96
(% of duty time) +10% 721.42 472.07
+20% 704.65 474.72
Unproductive time
−5% DT; −10% OCT 680.57 474.24
+10% DT; +10% OCT 719.35 484.09
+20% DT; +20% OCT 736.35 496.84
Sensitivity analysis The calculation of the average CS costs is based on several
parameters that are subject to uncertainty. To estimate the influence
of changes in the input parameters, a sensitivity analysis was
performed. Besides different inputs for variable and fixed costs, the
assumptions for the calculation of the staff’s capacity was varied
(time consumption for other deliveries, time consumption for other
duties, unproductive time).

22. It is obvious that the unit costs increase with higher fixed or variable costs. Changes in the
variable costs have a higher influence at the public hospital, where variable costs account for
a larger share in total costs. If staff need more time for other patients or productive work, the
changes in cost are relatively small.
If the unproductive time increases , the costs per CS rise by
5.4% at the private hospital and + 2.5% at the public Hospital, if the
unproductive time of all staff is increased by 10%.
The NGO hospital had high costs for the depreciation of buildings and equipment. No
accurate information was available, but the directors gave an estimation of the total
cost of setting up all hospital buildings. By attributing these costs to the total surface
area of hospital buildings, a price of 40,000/- per square meter was estimated.
This price is substantially higher than the price of the public hospital where original
building prices were available from records. Most buildings of the public hospital were
built more than 60 years ago, which may explain the observed differences in price per
m2.
In addition, the equipment depreciation for CS was much higher at the private
hospital. The overhead costs for staff were also higher at the private hospital due to
a larger number of staff members working at the service departments

23. Results
1. The public hospital (DH) performed 81 monthly CS
with an average length of stay (ALOS) of 5-7 days,
compared to 3-5 days at the private hospital.
2. Staff members at the private hospital invest more time
per patient.
3. The cost per CS at the current patient numbers is
(37600) at the public and (54640) at the private
hospital.
4. However, the unit cost at the private hospital would be
less than at the public hospital if the patient numbers
were the same.

24. S.
No.
District Public Hospital
Ceaserean
Section Rate
(%)
Private Hospital
Caesarean
Section Rate
(%)
1 Pratapgarh 3 1
2 Jaisalmer 4 24
3 Banswara 6 0
4 Dausa 6 6
5 Barmer 7 4
6 Rajsamand 9 39
7 Dholpur 9 53
8 Bundi 10 36
9 Baran 10 52
10 Churu 10 25
11 Dungarpur 10 0
12 Tonk 12 19
13 Sirohi 13 14
14 Bharatpur 15 42
15 Bhilwara 16 43
16 Karauli 16 24
17 Chittorgarh 16 36
18 Udaipur 17 38
S.
No.
District Public Hospital
Ceaserean
Section Rate (%)
Private Hospital
Ceaserean
Section Rate (%)
19 Madhopur 17 21
20 Bikaner 18 49
21 Alwar 19 38
22 Jhalawar 20 55
23 Jodhpur 23 51
24 Pali 23 30
25 Nagaur 24 30
26 Hanumangarh 25 28
27 Ajmer 25 43
28 Ganganagar 26 36
29 Jalore 35 13
30 Jhunjhunu 35 27
31 Sikar 40 27
32 Jaipur I 44 32
33 Jaipur II 51 48
34 Kota 58 52
Total 11% 29.41%
Districtwide C-Section Rates (April to Sept 22)

26. JSSK Provision ( Govt.Hospital)
S.No Service Provisions Normal
Delivery
Cesarean Section
1 Drugs 350/- 1600/-
2 Diagnostics 150/- 350/-
3 Diet 300/-(2 days) 750-1000 (5-7 days)
4 Blood 450/-(Per
Unit)
450/-
5 Transport(To &
Fro)
Plains-500/-
Tough-1000/-
Plains-500/-
Tough-1000/-
6 Services Charges(10%) Notional 390/-(10% of 3900/-)
7 HR-Doctors/ANM-
SN
ANM/SN( 266-
500)
Gyanac-3k/- Pedia-2k/-
Anesthetist-1.5k (Avg-1.5K)
Total 1566/- 5540/-