Health Service Costing

Dr Lord W Reza
BDS, MHA (TISS)
Lwreza@gmail.com
Factors
• Location of Healthcare Facility – The price of Hospital services
significantly varies with location of facilities such as Rural, Semi rural,
Urban etc In general rural healthcare facility has lower cost as
compare to its urban counterpart
Factors
• Quality Accreditation – NABH or NABL Accreditation is widely
followed by the healthcare institutions and it is also mandatory to
receive the Insurance patients. JCI accreditation is Global Gold
Standard of Quality in Healthcare Institutions. The cost of service at
JCI accredited institution is higher than NABH institutions. It is usually
20% higher as compared to its NABH accredited counterpart.
• Technology – Game changer technology such as Cyber Knife machine
for Brain surgery is strategic advantage over Gamma Knife Surgery.
Thus the cost of Surgery with Cyber knife will be significantly higher
than its lower version.
Factors
• Credential of doctors – The credential of doctor is most important
factors deciding the Costing of services. It is even noticed that cost of
service X is different with different doctor is same Hospital. For
example cost of Knee replacement by Dr Ashok Rajagopal is
approximately 25% higher as compared to other doctors of same
speciality.
Factors
• Purchasing power of community – Purchasing power of community is
another important factors effecting the healthcare costing. It is also
observed that healthcare institution automatically came into
existence according to the economic niche of the society. The type
payers such as Insurance or Out of Pocket also effect the price of
hospital services.
Factors
• Market competitors – Like every other industry Healthcare industry
prices also influenced by the market players. The present day
customers also bargain with the providers
• Regulators or governments - The most important factor is regulators
or authority or government. They having control over every single
players affecting healthcare prices. These players are doctors,
pharmaceutical industry, insurers etc.
Factors
• Pharmaceutical and Surgical market behaviour – The Hospital
services are heavily dependent on the drugs and implants. The
market behaviour of these two products heavily effecting the cost of
healthcare products. For example price capping cardiac stents
significantly reduced the price of cardiac catheterization procedure.
The factors affecting standardizations
• Registration of Private Hospitals
• Absence of regulatory control over hospital
• Classification of Private Hospital such as primary care provider or
secondary care profile
• Absence of body to regulate the referrals in the system
Components of Bundled Services in Hospital
• Specialist fee including surgeon and anaesthetist charges
• Accommodation and nursing;
• Operating theatre facilities
• Surgical drugs and dressings
• Prosthesis or Implant
Classification of Surgical Procedure
• Complex Major Operation or Supra major Plus
• Major Plus
• Major
• Intermediate
• Minor

DO NOT FOLLOW THIS

Classification of Surgical Procedure
• DRG
• CPT
• ACHI
Component of Hospital Bills
• Patient Information
• Patient Details (Name/Age/Sex/Address)
• Bill date/Time
• Admission Date with time/Discharge Date with Time
• Name of Doctor/Department
• Bed Number/Room No/Accommodation type (Ward, Semi private etc)
• Diagnosis
• Mode of Payment (Cash/Credit) / Payer Name
Component of Hospital Bills
• Registration
• Consultation
• Dietician charges
• Accommodation
• Room Rent
• ICU Charges
• Nursing
• Duty Doctor Charges
• Laboratory & Diagnostic Charges
Component of Hospital Bills
• Professional Fee
• Surgeon Charges
• Assistant Surgeon Charges
• Anesthetist Charges
• Operation Theatre Charges
• Equipment Charges
• Drugs & Implants
• Consumables
• Food and beverages
• Administrative & Other Charges
Thank You