RWANDA HEALTH SERVICE COSTING

Transcription

1 REPUBLIC OF RWANDA MINISTRY OF HEALTH RWANDA HEALTH SERVICE COSTING HOSPITAL ANALYSIS October 2011

2 This study was made possible through the support for the Integrated Health System Strengthening Project funded by the U.S. Agency for International Development (USAID), under the terms of Contract GHS-I , Task Order GHS-I Abstract The Rwandan Ministry of Health, in collaboration with the USAID-funded Integrated Health Systems Strengthening Project (IHSSP), carried out a study to determine the costs of providing hospital services. The results of the costing were intended for use in re-designing insurance reimbursement mechanisms and levels. The results can also be used for other purposes, such as resource allocation, budgeting and comparisons of efficiency. The figures were derived from the actual services and expenditures at a sample of 4 well-performing district hospitals and from one referral hospital (CHUK). A step-down process was used to estimate the bed-day and outpatient cost costs and various allocation factors were used. These figures were combined with standard activitybased costs to develop a small number of diagnosis-related group costs. Based on the average of the four district hospitals, the model used 243 beds of which 152 were occupied and it had 55,547 bed days and 23,535 outpatient visits. The total cost was RWF 667 million. The average cost per bed day ranged from RWF 5,710 in the Nutrition Rehabilitation Unit to RWF 13,118 in the Gynecology and Maternity Unit. The referral hospital had much higher bed day costs, ranging from RWF 21,442 in the Internal Medicine Unit to RWF 82,327 in the Obstetrics and Gynecology Unit (which includes Theatre costs). The DRG direct costs were based on standard treatment procedures and resource needs developed by a group of experts. The DRG indirect costs were taken from the step-down analyses. The total DRG costs also varied considerably. At a district hospital, for example, a case of acute diarrhea cost RWF 15,221, based on an ALOS of 5 days. On the other hand, an abdominal emergency due to peritonitis or occlusion cost RWF 219,848 based on 15 days in hospital and a surgical intervention. A case of severe pediatric malaria was between these figures, with a cost of RWF 115,928. Significant challenges were encountered in data collection. It was hard to obtain accurate data on the numbers of services provided, on staffing, and on some ancillary department services, and it was not possible to collect any data on the use and distribution of drugs and medical supplies since the recording systems are weak. It will be important to improve the quality of the data used so that the exercise will be easier and the results will be more accurate. The models can be updated and adapted by the MOH in accordance with their needs and people from the MOH and the School of Public Health have been trained to use and teach the models. Recommended Citation This report may be reproduced if credit is given to the USAID s Integrated Health System Strengthening Project led by Management Sciences for Health. Please use the following citation: Collins, D., J.L. Mukunzi, Z. Jarrah, C. Ndizaye, P. Kayobotsi, C. Mukantwali, B. Nzeyimana, and M. Cros. Rwanda Health Service Costing: Hospital Analysis. October, Management Sciences for Health. Submitted to USAID by the Integrated Health System Strengthening Project. Information shown in the Annexes may not be quoted or reproduced separate from the rest of the document without the written permission of the Rwandan Ministry of Health or Management Sciences for Health. Key Words Rwanda, hospital, cost, diagnosis-related groups. Rwanda Hospital Costing Analysis Page 2 30 October 2011

3 Disclaimer The authors views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development, the United States Government or the Government of Rwanda. Rwanda Hospital Costing Analysis Page 3 30 October 2011

4 ACKNOWLEDGMENTS This Costing Exercise represents a collaborative effort between the Government of Rwanda and the United States Agency for International Development (USAID). It was conducted for the Ministry of Health with the support of the USAID funded Integrated Health System Strengthening Project. Under the costing steering committee led by the Honorable Minister of Health, Dr Agnes Binagwaho, this analysis was produced by David Collins, Management Sciences for Health; Jean Louis Mukunzi, Ministry of Health; Zina Jarrah, Management Sciences for Health; Cedric Ndizeye, Integrated Health System strengthening Project/ MSH; Pascal Kayobotsi, Integrated Health System strengthening Project/ MSH; Christine Mukantwali Integrated Health System strengthening Project/ MSH; Bonaventure Nzeyimana, Ministry of Health; Marion Cros, Management Sciences for Health. This exercise would not have been finalized without the usual support of all the stakeholders who are involved in the health system strengthening in Rwanda. Rwanda Hospital Costing Analysis Page 4 30 October 2011

5 Table of Contents Executive Summary Introduction Costing tools Methodology Results Conclusions and recommendations Annexes Annex 1: District Hospital Internal Medicine DRG and priority case costs in 2009 (RWF) Annex 2: District Hospital Pediatric DRG and priority case costs in 2009 (RWF) Annex 3. District Hospital Obstetrics and Gynecology DRG and priority case costs in 2009 (RWF) Annex 4: District Hospital Surgical DRG and priority case costs for 2009 (RWF) Annex 5: Referral Hospital Internal Medicine DRG and priority case costs in 2009 (RWF) Annex 6: Referral Hospital Pediatric DRG and priority case costs in 2009 (RWF) Annex 7: Referral Hospital Obstetrics and Gynecology DRG and priority case costs in 2009 (RWF) Annex 8: Referral Hospital Surgical DRG costs in 2009 (RWF) Annex 9: Referral Hospital Surgical non-drg priority case costs in 2009 (RWF) (Part 1) Annex 9: Referral Hospital Surgical non-drg priority case costs in 2009 (RWF) (Part 2) Annex 10. References Rwanda Hospital Costing Analysis Page 5 30 October 2011

6 Executive Summary The Rwandan Ministry of Health (MOH), in collaboration with the USAID-funded Integrated Health Systems Strengthening Project (IHSSP), has undertaken a costing exercise to determine the costs of providing the Paquet Minimum d'activités (PMA) and the Paquet Complémentaire d Activités (PCA). The results of the costing are intended for use in re-designing insurance reimbursement mechanisms and levels. The costing can also be used for other purposes, such as resource allocation, budgeting and comparisons of efficiency. The goal was to determine the actual cost of services at the health center (including community services), district hospital, and referral hospital levels. At the health centre level the objective was to estimate the cost of each service included in the PMA. At the hospital levels, the objective was to estimate the cost of each case treated and then to group them into Diagnosis Related Groups (DRGs). The classification of cases was based on the World Health Organization (WHO) codes and norms and standards for Rwanda as identified by the MOH. This report covers the estimation of hospital bed-day and outpatient visit costs and DRG costs. A separate report was prepared for health centre costs. The figures used in the study were derived from the actual services and expenditures at a sample of 4 wellperforming district hospitals and from one referral hospital (CHUK). A step-down process was used to estimate the bed-day and outpatient cost costs and various allocation factors were used. The four district hospitals varied significantly in terms of numbers of beds and patients, service mix, staffing levels and total expenditures. The average cost per inpatient day also varied across the hospitals but not enough to invalidate the use of the figures to estimate the national averages. Based on the average of the four district hospitals, the model had 243 beds of which 152 were occupied and it had 55,547 bed days and 23,535 outpatient visits. The total cost was RWF 667 million. The average cost per bed day ranged from RWF 5,710 in the Nutrition Rehabilitation Unit to RWF 13,118 in the Gynecology and Maternity Unit. The referral hospital had much higher bed day costs, ranging from RWF 21,442 in the Internal Medicine Unit to RWF 82,327 in the Obstetrics and Gynecology Unit (which includes Theatre costs). The DRG direct costs were based on standard treatment procedures and resource needs developed by a group of experts. The DRG indirect costs were taken from the step-down analyses. The total DRG costs also varied considerably. At a district hospital, for example, a case of acute diarrhea cost RWF 15,221, based on an ALOS of 5 days. On the other hand, an abdominal emergency due to peritonitis or occlusion cost RWF 219,848 based on 15 days in hospital and a surgical intervention. A case of severe pediatric malaria was between, with a cost of RWF 115,928. Significant challenges were encountered in data collection. In particular, it was hard to obtain accurate data on the numbers of services provided, on staffing, and on some ancillary department services. Importantly, it was not possible to collect any data on the use and distribution of drugs and medical supplies since the recording systems are weak. It will be important to improve the quality of the data used so that the exercise will be easier and the results will be more accurate. The models can be updated and adapted by the MOH in accordance with their needs and people from the MOH and the School of Public Health have been trained to use and teach the models. Rwanda Hospital Costing Analysis Page 6 30 October 2011

7 1. Introduction The Ministry of Health in Rwanda (MOH), in collaboration with the USAID-funded Integrated Health Systems Strengthening Project (IHSSP), has undertaken a costing exercise to determine the costs of providing the Paquet Minimum d'activités (PMA) and the Paquet Complémentaire d Activités (PCA). The results of the costing are intended for use in re-designing insurance reimbursement mechanisms and levels but can also be used for other purposes, such as resource allocation, budgeting and comparisons of efficiency. The goal was to determine the actual cost of services at the health centre (including community services), district hospital, and referral hospital levels. At the health centre level the objective was to estimate the cost of each service included in the PMA. At the hospital level, the objective was to estimate the cost of each case treated and then to group them into Diagnosis Related Groups (DRGs). The classification of cases was based on WHO codes and norms and standards for Rwanda as identified by the MOH. This report presents the results of the analysis of bed-day and outpatient visit costs at the hospital level and the results of the DRG cost analysis. It covers both district and referral hospitals. 2. Costing tools The most efficient way to calculate health service costs is using computerized costing tools. The use of computer tools allows costs to be re-calculated quickly when new activities are added or procedures or prices change. Tools should be open source and should be built in a spreadsheet program that people are familiar with, such as MS Excel. Tools should allow the user to have an understanding of where the data goes and how calculations are made; they should be simple to use and modify and training needs should be minimal. In addition, tools should not be require so much memory that they are difficult to run or to transfer by . From time to time the MOH will need to update resource prices, add new activities, and change resource types and mixes to reflect changes in procedures. Minimal training should be required to use the tools, and once this has been given, the tools should not require external technical assistance every time they are used. The normal way to estimate the actual costs of hospital services is using a step-down model 1. After a review of available tools and the above criteria it was decided that an existing spreadsheet tool (HOSPICAL) should be modified for Rwandan use. A separate spreadsheet tool was developed for costing DRGs. When developing the methodology and the tools we have attempted to make them easy to understand, use and modify and not dependent on information that data that is difficult or time-consuming to obtain. In addition, we have tried to keep them small enough so they can be downloadable and shared by . 1 This methodology is described in Designing and Implementing Health Care Provider Payment Systems: How-To Manuals; Edited by John C. Langenbrunner, Cheryl Cashin, and Sheila O Dougherty. World Bank/USAID, Rwanda Hospital Costing Analysis Page 7 30 October 2011

8 3. Methodology Hospital bed-day and visit costs The methodology used for calculating bed-day outpatient visit costs and was similar to one used previously in a previous study (Beaston Blaakman, 2008) 2 and the results of the two studies are compared later in this document. That 2008 study did not produce detailed DRG costs for inpatient cases. A small sample of hospitals was selected for the development of average district hospital bed-day and outpatient visit costs. An initial sample of 3 well-performing district hospitals was selected in conjunction with the MOH: Nyamata, Kibogora and Kibagabaga. An additional hospital, Ngarama, was selected as a hospital that was considered not well-performing so that costs could be compared. At the request of the MOH, Rwinkmwavu and Ruhengeri District Hospitals were later added to the sample. However, during the data collection process difficulties were encountered in collecting data from some hospitals and the final sample was Nyamata, Kibogora, Kibagabaga and Ruhengeri. Centre Hospitalier Universitaire de Kigali (CHUK) and (Centre Hospitalier Universitaire de Butare) CHUB were selected by the MOH as referral-level hospitals. It was considered that a small sample was appropriate initially to see how difficult it would be to collect data and to see how much variations in data existed. As it proved to be quite difficult we did not expand the sample. During the data collection process for (CHUB) we discovered that the service data are not included in the national HMIS system and that complete records and/or reports are not produced by the hospital. It was, therefore, decided to omit this hospital from the sample and costs were not calculated. The hospital bed day and visit costs were based on actual expenditures from the sample of hospitals. We also obtained original budget requests so that we could estimate any possible underfunding that might represent a gap between the actual and standard (needed) costs. Only recurrent hospital costs were included because the purpose of the study was to produce costs that can be used to set reimbursement rates, and it is unlikely that capital costs would be included in these calculations because they are generally funded from government capital budgets or donations. In addition, capital costs (e.g. construction, renovation, and major equipment) vary across facilities and over years and it is difficult and time-consuming to calculate depreciation. We also excluded the costs of supervision and support of district activities since they do not relate to the costs of hospital services. Before describing the steps it is useful to deal with some definitions: General Departments: Departments such as administration and maintenance, that provide services to all ancillary and clinical departments. Ancillary Departments: Departments that support the clinical functions, such a laboratory, radiology, physiotherapy, and operating theatre. Clinical Departments: Departments that provide clinical services, such as Internal Medicine and Pediatrics. Allocation Factors: The factors used to allocate the costs from one department to another, for example, the cost of administrative services to the Internal Medicine Department. Unit cost per bed day: The average cost of having one patient for one day in an inpatient department. Unit cost per visit: The average cost of one outpatient visit to a hospital Rwanda Health Centre and Hospital Cost Study. Twubukane Decentralization and Health Project. Rwanda Hospital Costing Analysis Page 8 30 October 2011

9 Step-Down Process The step-down methodology entails identifying the direct costs for each cost centre (department), allocating indirect costs across those departments, and assigning the costs of ancillary departments to clinical departments. Direct costs are those that can be identified with a specific department, for example, the cost of X-ray film which is only used in the radiology department. Indirect costs are those that cannot be identified with one specific department and have to be allocated across several departments. Where the costs and services of an ancillary department can be identified directly with a particular clinical department they assigned to that department. The final clinical department costs are then used to calculate a cost per bed day and per outpatient service. For inpatient services, the cost per bed day is then multiplied by the expected length of stay for selected cases or case groups to arrive at a cost per case type or group. The detailed steps used for Rwanda were as follows: 1. Identify the general, ancillary and clinical departments that will serve as cost centres. The clinical departments are the same as those identified during the DRG selection process. 2. Obtain the total expenditures of the hospital, broken down by resource type (e.g., staff, drugs) and the income by source. Include donor-funded resources and donated goods and services. 3. Remove expenditures that do not relate to hospital services (e.g. district supervision). 4. Remove capital and other non-recurrent expenditures. 5. Identify the number of each type of staff employed and their remuneration (e.g. salary, allowances, bonuses etc.) and related employer costs (e.g. social security, health insurance). 6. Identify the distribution of staff across departments. If staff members are shared across departments estimate the time distribution. 7. Compare the numbers of staff with the MOH norms. 8. Compare actual expenditures with requested budget funding to determine if the facility might be underfunded. 9. Assign the direct expenditures to each department, including staffing. 10. Allocate the accumulated costs of the general departments (e.g., administration and maintenance) to the ancillary and clinical departments. 11. Allocate the total loaded cost of each ancillary department to each clinical departments based on the ancillary services used. 12. Divide the total cost for each inpatient clinical department by the number of bed days to arrive at the average cost per bed day for that department. Divide the cost of the outpatient department by the number of visits to get the average cost per visit. Multiply the average cost per bed day by the ALOS to get the average cost per hospital inpatient stay. 13. Reconcile the final unit costs with the total expenditure of the hospital. The allocation factors used were as follows: 1. Staff costs were allocated in proportion with the monthly salaries and related costs for the staff working in each cost centre. 2. Administration and maintenance costs were allocated to the other cost centres in proportion to staff costs. 3. Transport costs were allocated on the basis of staff and other direct costs. 4. Social service costs were allocated on the basis of numbers of discharges and outpatient visits. 5. Clinical management costs which were allocated on the basis of clinical staff numbers. 6. Patient food and laundry costs were allocated on the basis of bed days. Rwanda Hospital Costing Analysis Page 9 30 October 2011

10 7. The central stores costs were allocated using proportions from Rwinkmwavu, which was the only district hospital that kept records of issues. 8. The distribution pharmacy costs were allocated on the basis of outpatient visits and inpatient bed-days. 9. The laboratory, radiology and physical therapy costs were allocated using proportions derived from hospital registers. In cases where they were not recorded we used proportions from another district hospital. 10. The operating heater costs were allocated based on HMIS reports of quantities of services performed. 11. Emergency care costs were allocated on the basis of inpatient admissions. After the data had been entered in the model the data and results were presented to hospital staff in a validation workshop and, in some cases, the hospitals provided corrected and additional information which was used to update the figures. DRG Costing The purpose of selecting Diagnosis Related Groups (DRGs) was to develop costs which may be used in the future as a basis for reimbursing facilities by DRG 3. It was recognized that it would not be feasible to cost all the different case types in a short space of time, due partly to limitations in data availability (e.g. absence of computerized patient records in most hospitals). It is also recognized that it would not be wise to try to implement a wide range of DRG prices initially. The aim was, therefore, to select cases that would make between 20 and 30 DRGs. Definitions Before describing the steps it is useful to deal with some definitions. The term case is used here to cover a clinic case based on a diagnosis. Reimbursement can be for a single type of case or for a group of cases. A case group is defined as a group of hospital cases that have similar clinical characteristics and resource intensities 4. A case group is the same as a diagnosis related group, since the determination of a case type is based on a diagnosis. A standard costing methodology was used for the DRG costing since it was not practical to observe and record all the resources actually used for all the DRG cases. Expert groups of Rwandan doctors were chosen by the MOH to select the cases for the DRGs and to determine the types and quantities of resources that are needed to diagnose and treat each case (to be used for the standard costing of the cases). DRG Steps Creating DRGs has been described as a process that is both art and science where some groupings may rely on statistical analysis, others may rely on expert judgment and many may rely on both. 5 For Rwanda, the following methodology was used to select the DRGs for costing. 1. The first step was to identify the types of case treated in Rwanda at the different levels (health centre, district hospital, referral hospital). The World Health Organization International Classification of Diseases (ICD) 10 classification was used as the basis for this. 2. The ICD 10 has 22 Chapters which are broken out into 69 Sub-Groups. These 69 Sub-Groups are further broken out into 1,269 blocks (Level 2 Sub-Groups). Each block is then broken out still further into sub- 3 The Rwandan MOH decided that it is more likely to implement a case-based payment system and not a procedure-based payment system. The costing was therefore based on case types (using DRGs) and not on procedures. The Australian Condensed Classification of Health Interventions was not used as it classifies procedure and interventions (for use instead of ICD 10 classifications where simpler payment mechanisms are desirable). 4 Langenbrunner et al, Langenbrunner et al Rwanda Hospital Costing Analysis Page October 2011

11 blocks which represent the most specific case types and is the lowest level of detail. There are around 14,000 of these sub-blocks in total. 3. Of the 22 chapters, 19 were selected by the expert group as relevant for Rwanda 6. The expert group then went through each chapter and classified each block according to several criteria: (1) if the type of case is treated in Rwanda, and, if so, at what level; and (2) if the type of case is high priority because it is frequently provided, is likely to have a high cost and/or has a high impact on mortality or morbidity. The expert group did not go down to the level of the sub-blocks. 4. Within the 19 selected chapters, a total of 1,248 blocks were deemed to be provided in Rwanda at one or more levels of care (referral hospital, district hospital or health centre). These 1,248 blocks fall within 69 Sub-Groups. Of these 1,248 blocks, 192 were selected from 67 sub-groups as high priority for costing in the current exercise, 268 were selected for costing in 2011/12 and the remaining 788 were left for the future. 5. At the health centre, all the services provided in the Minimum Package of Services were costed and the selected list of case types was checked against the MPA. 6. Hospital outpatient services were grouped by department and costed on a per visit basis. 7. The list of 192 Level 2 Sub-Groups were reviewed for errors and were compared with the District Hospital Health Information System 7 (DHHIS) reporting categories 8. Level 2 Sub-Groups that were not in the DHHIS were be bundled into case groups or were removed from the list for costing in this current exercise. 8. The grouping of cases into DRGs was based on the clinical and economic homogeneity of the case types. Each DRG only contain cases that are similar anatomically and belong to one group of diseases. Each DRG also only contains cases which, on average, have a similar resource intensity and cost for the range of diagnostic and treatment services needed to completely diagnose and treat the case. The resource intensity was estimated using the standard cost developed for each case The indirect costs of each case were determined from the bed-day and visit costing exercises. 10. Consideration was not currently being given to breaking down the DRGs by sex and or age for services that are not sex or age-specific (e.g. Pediatric and Maternity services) due to the added complexity. 11. Cases that were not included in the DRGs were costed using the Average Length of Stay (ALOS) and average cost per bed-day. 12. The standard costs can be adjusted to actual by applying a factor representing the gap between the requested budget and actual expenditures. This adjustment was not yet made in the calculation of the figures shown in this report. 13. The bed-day costs shown in this report are based on 2009 expenditures and the DRG standard costs are based on 2009 resource prices. The costs can be adjusted easily in the model since a place for an inflation factor was included in the model. 6 The other 3 chapters cover external causes of mortality and morbidity, factors influencing health status and codes for special purposes. 7 The same categories are reported for Referral Hospitals. 8 It was agreed in the meeting with the Costing Steering Committee that the DRGs used for the costing exercise must match the HIS categories and will be the same that would be used in the billing system and in patient records. 9 Each DRG should contain enough hospital cases to produce stable aggregated estimates of cost per case in repeated samples. Rwanda Hospital Costing Analysis Page October 2011

12 Data collection The costing started in 2010 and it was agreed that the costs would be calculated for calendar year 2009, which was the last complete financial year. Service data were initially collected from the national HMIS. However, an analysis of those reports showed that there were gaps (both missing months, which were adjusted for, and missing data types). There were also instances where data in different sections of the reports should agree but did not. It was, therefore, necessary to collect lot of additional service data at the hospitals. In addition, ancillary department data were generally insufficient to allow for the accurate allocation of those costs across departments. None of the four district hospitals had complete records that showed the cost of drugs and medical supplies issued to the clinical departments and records of drugs issued to patients were not computerized and not stored in a way that could easily be analyzed. And in many cases, the registers for laboratory, radiology and physical therapy did not show for which departments the services were provided. Although we requested and received information on donated goods and services received by the hospitals it is likely that it was not always complete since records are not routinely kept. Limitations There are several limitations in the methodology that should be noted. These are the following: 1. The cost of drugs reflects the expenditure made in the year and not the cost of drugs issued. There can be significant differences in these figures due to factors such as large purchases near the year-end that are not issued during the year and stock losses. 2. We were unable to obtain cost estimates for each different kind of laboratory test and for blood (which was handled by the laboratory) and we, therefore, used an average cost for all tests. The same was true for radiology and other imaging examinations, and also for physical therapy. 3. The numbers and allocation of staff and related costs were based on the payroll records for a sample month during the year. Since staffing and salaries change during the course of the year, the allocation of the total staffing expenditures was, therefore, approximate. 4. Results Hospital Services When the costs were calculated for Rwinkmwavu hospital and compared with the other sampled hospitals it was found that staff levels were much higher at Rwinkmwavu. This would distort the averages significantly and those hospital costs were, therefore, left out of the calculations. The district hospitals used in calculating the average costs were, therefore, Nyamata, Kibogora, Kibagabaga and Ruhengeri. The 4 hospitals differed significantly in size, both in terms of total beds (from 143 at Nyamata to 383 beds at Ruhengeri) and average occupied beds (106 at Kibogora to 231 beds at Ruhengeri) (Table 1). As was noted previously, Ruhengeri is more of a provincial hospital and is likely to be designated as such in the future. The Rwanda Hospital Costing Analysis Page October 2011

13 hospitals also varied in terms of numbers of services provided, ranging from 38,865 bed days and 12,371 outpatient visits at Kibogora to 80,392 bed days and 32,437 outpatient visits at Ruhengeri. Total costs also varied, ranging from RWF 514 million at Kibogora to RWF 810 million at Ruhengeri. ALOS rates are also shown in the table but this figure cannot be used for accurate comparisons across hospitals because the mix of services is different at each one. Table 1: Comparison of beds, visits and total costs across 4 district hospitals, 2009 Hospital Total Beds Occupied Beds BOR IP Bed Days Discharges ALOS Per Discharge OP Visits Total Cost (RWF) Kibagabaga % 44,236 10, , ,874,035 Kibogora % 38,865 6, , ,016,989 Nyamata % 54,764 6, , ,183,804 Ruhengeri % 80,392 17, , ,879,731 Source: National HMIS The variations in the mix of services are shown in Tables 2, 3, 4 and 5. In some cases these were significant. At Nyamata Hospital, for example, the greatest number of bed days was in Internal Medicine (16,128), whereas at Kibogora the greatest number was in Surgery (12,071). Bed occupancy rates differed within each hospital and in some cases were quite low 10. The ALOS also differed across the hospitals for each department; for example the rate for Internal Medicine ranged from 4.7 days at Ruhengeri to 9.7 days at Nyamata. Based on these variations it is rational that the resources needed and related costs would have been different. Table 2: Nyamata Hospital services 2009 Clinical Department Total Beds Occupied Beds BOR IP Bed Days ALOS per Discharge Op Visits Ambulatory care - - 0% ,391 Internal medicine % 16, Gynecology and maternity % 13, Surgery % 12, Pediatrics % 11, Nutrition Rehab - - 0% Mental health % 1, Total % 54, ,391 Source: National HMIS 10 A recommended target rate taking into account infection control and cost-efficiency is 85%. Rwanda Hospital Costing Analysis Page October 2011

14 Table 3: Kibogora Hospital services 2009 Clinical Department Total Beds Occupied Beds BOR IP Bed Days ALOS per Discharge Op Visits Ambulatory care - - 0% ,371 Internal medicine % 8, Gynecology and maternity % 6, Surgery % 12, Pediatrics % 8, Nutrition Rehab % 3, Mental health - - 0% Total % 38, ,371 Source: National HMIS Table 4: Kibagabaga Hospital services 2009 Clinical Department Total Beds Occupied Beds BOR IP Bed Days ALOS per Discharge Op Visits Ambulatory care - - 0% ,940 Internal medicine % 7, Gynecology and maternity % 13, Surgery % 11, Pediatrics % 9, Nutrition Rehab % 1, Mental health - - 0% Total % 44, ,940 Source: National HMIS Table 5: Ruhengeri Hospital services 2009 Clinical Department Total Beds Occupied Beds BOR IP Bed Days ALOS per Discharge Op Visits Ambulatory care - - 0% ,437 Internal medicine % 13, Gynecology and maternity % 17, Surgery % 27, Pediatrics % 16, Nutrition Rehab % 4, Mental health - - 0% Total % 80, ,437 Source: National HMIS The equivalent figures for CHUK are shown in Table 6. There are a few specialty beds that are not shown in the table. Rwanda Hospital Costing Analysis Page October 2011

15 Table 6: CHUK services 2009 Total Occupied BOR IP Bed ALOS per OP Visits Clinical Department Beds Beds Days Discharge Private outpatient (Clinique) 14,938 Polyclinique 54,562 Private wards % 8, Internal medicine (including Prisoners) % 30, Gynecology/Obstetrics (including Theatre) % 12, Surgery (including Neuro Surgery) % 37, Pediatrics (including Neonatology) % 28, Source: CHUK reports Hospital Unit Costs The total average cost per outpatient visit and bed day for each department at the 4 district hospitals is shown in Table 7. The table shows the numbers of inpatient bed-days and outpatient visits, the total hospital costs and the average cost per bed-bay or visit. Total hospital costs varied from RWF 514 million at Kibogora to RWF 810 million at Ruhengeri. Differences in hospital expenditures are normal, of course, since the 4 hospitals are of varying sizes. So what is most important is to compare the total cost with the services that the hospital produces. This cannot be done by comparing the average cost of a service across the whole hospital because the mix of services varies from one hospital to another. The most accurate way and feasible way of comparing the costs is using department averages. The results of this can also be seen in Table 7. Again, the figures show differences across the 4 hospitals. For example the average cost of a bed-day in Internal Medicine ranged from RWF 6,996 at Nyamata to RWF 11,033 at Kibagabaga. These differences are due to different overall expenditure levels and the distribution of resources and their costs across the departments. The averages of the service and cost figures are shown in the next section. Staffing is the key cost driver in the hospital costing and was a major reason for differences across the hospitals. It is recommended that the staffing patterns in the sampled hospitals be compared with the MOH staffing norms to see what differences exist. CHUK was the only referral hospital for which we could collect data and so the average figures in the RH cost model are the same figures as in the CHUK model. Those figures are shown in the next section Unfortunately, we had not been able to hold a validation meeting with CHUK managers and they have not reviewed the data shown here. Rwanda Hospital Costing Analysis Page October 2011

16 Table 7: Comparison of costs per bed day across the 4 district hospitals for 2009 (RWF) Hospital Clinical Department IP Bed Days OP Visits Total Costs Average Cost per Visit/ Bed Day Nyamata Ambulatory care - 22, ,511,943 8,508 Nyamata Internal medicine 16, ,826,861 6,996 Gynecology and Nyamata maternity 13, ,500,979 13,074 Nyamata Surgery 12, ,601,736 9,151 Nyamata Pediatrics 11,434-97,325,457 8,512 Nyamata Nutrition Rehab Nyamata Mental health 1,156-1,416,829 1,225 Nyamata Total 54,764 22, ,183,804 - Kibogora Ambulatory care - 12, ,709,098 9,515 Kibogora Internal medicine 8,627-78,702,860 9,123 Gynecology and Kibogora maternity 6,492-95,900,203 14,772 Kibogora Surgery 12, ,693,462 10,745 Kibogora Pediatrics 8,079-71,922,590 8,903 Kibogora Nutrition Rehab 3,597-16,864,445 4,688 Kibogora Mental health Kibogora Total 38,865 12, ,016,989 - Kibagabaga Ambulatory care - 26, ,584,539 4,253 Kibagabaga Internal medicine 7,440-82,086,123 11,033 Gynecology and Kibagabaga maternity 13, ,883,112 11,958 Kibagabaga Surgery 11,466-78,335,923 6,832 Kibagabaga Pediatrics 9,092-80,541,885 8,859 Kibagabaga Nutrition Rehab 1,332-4,442,453 3,335 Kibagabaga Mental health Kibagabaga Total 44,236 26, ,874,035 19,483 Ruhengeri Ambulatory care - 32,437 91,183,650 2,811 Ruhengeri Internal medicine 13, ,030,862 10,352 Gynecology and Ruhengeri maternity 17, ,026,279 11,165 Ruhengeri Surgery 27, ,917,321 7,787 Ruhengeri Pediatrics 16, ,055,501 7,697 Ruhengeri Nutrition Rehab 4,957-15,866,037 3,201 Ruhengeri Mental health ,299,599 - Ruhengeri Total 80,392 32, ,879,731 - Rwanda Hospital Costing Analysis Page October 2011

17 Hospital Cost Model A separate Rwandan model for hospital costing was developed and was populated with average figures for the district hospitals and with the figures for CHUK. A section for the DRG costing was also developed and draws partly on figures in the hospital costing model. The assumptions for the District Hospital model are shown in Table 8. These represent the average numbers of services provided across the 4 sampled hospitals. It should be noted that three of the four sampled were underutilized as measured by their bed occupancy rates and the national model is, therefore, that of an under-utilized hospital with 63% bed occupancy. The desired bed occupancy rate of a general hospital from an efficiency and infection control perspective is generally thought to be 85%. If the hospital had higher occupancy rates, the unit cost of services would be lower since the indirect costs, such as administration, would be shared across more services. Rwanda Hospital Costing Analysis Page October 2011

18 Table 8: District Hospital model service assumptions Clinical Department OP Visits IP Bed Days ALOS per Discharge Total beds Occupied Beds BOR Ambulatory care 23, Internal medicine - 11, % Gynecology and maternity - 12, % Surgery - 15, % Pediatrics - 11, % Nutrition Rehab - 2, % Mental health % Total 23,535 55, % The costs shown in the national district hospital model, which also represent the average of the 4 sampled hospitals, are shown in Table 9. The average cost per outpatient visit was RWF and the cost of an inpatient bed day ranged from RWF 5,710 for Nutrition Rehabilitation to RWF 13,118 for Obstetrics and Gynecology Based on these average bed-day costs and the average length of stay figures the average cost of a stay was RWF 61,152 in the Internal Medicine Department and RWF 131,420 in Surgical Department. We compared these figures with the costs estimated by the study done in 2008 (Beeston Blackman), which used 2006 data 14. In that study the average cost of an inpatient bed day was as follows: Internal Medicine RWF 8,195, Pediatrics RWF 9,693, OB/GYN RWF 6,150 and Surgery RWF 6,082. In this study the figures for Internal Medicine (RWF 9,598), Pediatrics (RWF 8,510) and Surgery (RWF 9,419) are slightly higher. This is not surprising given that resource prices must have increased over the 3 years, especially for drugs and medical supplies). The cost of an OB/GYN bed day was, however, much higher in this study (RWF 13,118), which is worth further investigation. The average cost of a general outpatient visit in the 2008 study was not shown in the report but most of the visits cost between RWF 4,000 and RWF 6,000, which can be compared with the average cost of a visit in this study which was RWF 5, These figures should be reviewed when the costs are updated because a bed day in a Surgery Department should probably have a significantly higher cost than a bed day in Internal Medicine due to the use of the operating theatre. 13 Average bed-day costs can be converted into an average cost per discharge for each case type by multiplying them by the average length of stay or by a standard length of stay. 14 These figures are not strictly comparable because the 2008 study included depreciation and did not state what proportion of the costs that represented so we could not adjust those costs. Rwanda Hospital Costing Analysis Page October 2011

19 Table 9: District Hospital model costs for 2009 (RWF) Clinical Department Total Costs OP Visits IP Bed Days Average Cost per Visit/ Bed Day ALOS Average Cost per Discharge Ambulatory Care 121,182,410 23,535-5,149 - NA Internal Medicine 110,408,390-11,503 9, ,152 Gynecology and 166,774,531-12,713 13, ,750 Maternity Surgery 150,062,627-15,933 9, ,420 Pediatrics 96,807,543-11,375 8, ,513 Nutrition Rehab 14,113,153-2,472 5, ,855 The costs shown in the national referral hospital model are from CHUK only since we could not get sufficient data from CHUB for this study. CHUK is a teaching hospital and it was, therefore, necessary to consider the impact of teaching activities on patient service costs. In discussion with senior CHUK staff it determined that additional cost of teaching was not significant and were probably balanced by the additional free human resource support for patient services. It was, therefore, agreed that these costs would be ignored. CHUK inpatient bed day costs are higher than those at the district hospitals, which is understandable since referral hospital services should be more specialized. However, the average cost of a public outpatient visit is less than at a district hospital which may require additional research 15. The highest cost service appears to have been Obstetrics and Gynecology (RWF 82,327 per bed day), as it was at the district hospitals, and this was significantly higher than the cost of other services. It should be noted that staffing levels are the main cost driver in most cases and getting accurate departmental staffing figures has been a difficulty throughout this exercise, partly because some staff share their time between outpatient and inpatient services. Based on the average bed-day costs and the average length of stay figures the average cost of a stay was RWF 277,350 in the Internal Medicine Department and RWF 795,066 in Surgical Department. 15 The outpatient costs are referral hospital should be higher than at a district hospital because the services should be more advanced, resulting in more of a doctor s time, more advanced tests and more expensive drugs, although to some degree this can be offset by economies of scale. However, it is understood that some of CHUK services are actually the same level as provided at the district hospitals, which should not result in higher costs. Rwanda Hospital Costing Analysis Page October 2011

20 Table 10: Referral Hospital model costs for 2009 (RWF) Average cost per visit/ bed Average cost per discharge Department Total costs OP visits IP bed days ALOS Private Outpatient (Clinique) 91,150,087 14,938-6,102 NA NA Public Outpatients (Polyclinique) 229,007,760 54,562-4,197 NA NA Private Ward 237,318,489-8,987 26, ,494 Internal Medecine (Inc Prison Ward) 645,116,077-30,086 21, ,350 OB/GYN (Inc Theater) 1,020,942,890-12,401 82, ,985 Surgery (Inc Neuro Surgery & speciality beds) 1,357,972,067-37,758 35, ,066 Pediatrics (inc Neonatology) 772,620,629-28,723 26, ,054 O.R.L 48,241,928-1,931 24, ,184 Ophtalmologie 25,246,044-1,041 24, ,778 Stomatologie 78,506,766-1,247 62, ,667 Dermatologie 29,898, , ,737,294 DRG costs The DRG and case costs are shown in the DRG model and the total cost for each one is shown in Annexes 1 through 8. The DRGs are the priority cases that could be grouped. The individual cases shown in the lists were selected by the expert groups as priorities but the groups decided that they should not be grouped. As an example, Annex 1 shows the DRG and case costs for a district hospital Internal Medicine department. DRG 1 is comprised of two case types Diarrhea, acute, non-bloody and Acute diarrhea, bacterial (salmonella, shigella). The average length of stay should be 5 days for both case types according to the expert group. The SIS description is show for each case. The weight of each case types used for combining the two cases into DRGs, depending on how many of each case type is seen in a year. The loaded cost per service comprises the direct costs for staff, supplies and drugs plus ancillary costs and indirect costs. The two costs for Cases 1 and 2 were RWF 15,141 and RWF 15,341 and these were weighted and combined into the one DRG cost of RWF 15,221. These are the standard costs based on the services that should be provided. Actual costs may be higher if more services are provided, such as additional tests. 5. Conclusions and recommendations The purpose of the costing exercise was to estimate the cost of a small number of DRGs that comprise groups of high priority cases. Since the exercise involves carrying out a complete costing of all hospital services, we were also able to estimate the costs of other cases treated at the hospitals. The types of costs produced are as follows: A separate cost for each DRG which comprises a group of prioritized inpatient cases. A separate cost for each prioritized inpatient case that was not grouped into a DRG. An average cost per inpatient bed-day or discharge for cases that were not priorities for this study. An average cost per outpatient visit. Rwanda Hospital Costing Analysis Page October 2011

21 There are several factors that should be taken into account when using these costs. Firstly, costs reflect the actual expenditures made in 2009 and the cost of certain elements, such as drugs, has undoubtedly increased since then. Secondly, the sampled hospitals have indicated that these 2009 expenditures did not always reflect the resources that they need to provide good quality services since they generally did not receive the budgeted funds that they requested. Thirdly, the actual data are from a small sample of hospitals and it was not always possible to obtain accurate data from those hospitals. An important part of this exercise was the development of district hospital and referral hospital costing models. For the purpose of this costing the models were populated with the data collected during the exercise and these data can be updated by the MOH as and when needed. Blank versions of the models were also produced and were used in capacity building. These blank versions can be used to estimate the costs of other hospitals and the results can be used for better planning and budgeting and for comparing efficiency. Senior members of the MOH and the School of Public Health have been trained to use and teach the models. And the MOH plans to train all district managers to cost the district hospitals and health centres and the MOH and SPH trainers already held an initial training course. The hospital costs produced as a result of this exercise can already be used for setting reimbursement rates. The MOH has, however, recognized that this type of costing should be improved, repeated and updated on a regular basis since it will become an important element of its planning and management tools. In that context we have a number of recommendations which are as follows: The staffing figures used in the models should be compared with the MOH s staffing norms Individual costs should be developed for each type of laboratory test and imaging examination. Individual costs should be developed for each type of hospital outpatient service. The DRG costs should be reconciled with the total district hospital department costs and checked again against the costs in the 2008 Beeston Blackman study. The models should be run with the 2010 figures and comparisons made of the figures across the two years. Rwanda Hospital Costing Analysis Page October 2011

22 Annexes Rwanda Hospital Costing Analysis Page October 2011

23 Annex 1: District Hospital Internal Medicine DRG and priority case costs in 2009 (RWF) Category # ICD-10 SubGroup (1) ICD-10 SubGroup (2) ALOS SIS (Description) Weight (DRG Only) TOTAL LOADED COST PER SERVICE DRG COST FIRST GROUP - DRG - Cases included in the "priority list" / Standard Treatment Guidelines, and selected for the DRGs DRG1 1 Acute diarrhea, amebiosis 5 Diarrhée aigue non sanglante 60% 15,141 2 Diarrhea, acute, non-bloody Acute diarrhea, bacterial (salmonella, shigella) 5 Diarrhée aigue non sanglante 40% 15,341 DRG2 3 Malaria, severe Malaria, severe 7 Paludisme grave 100% 101, ,194 DRG3 4 Malaria, simple DRG4 Malaria, simple with troubles digestifs mineurs Paludisme simple avec troubles 2 digestifs mineurs 100% 27,186 27,186 5 TB, pulmonary, BK- 15 Tuberculose pulmonaire BK- 69% 79,870 6 Tuberculosis TB, pulmonary, BK+ 15 Tuberculose pulmonaire BK+ 31% 79,870 SECOND GROUP - Cases included in the "priority list" / Standard Treatment Guidelines, but not selected in the DRGs. DRC 7 Metabolic disorders Diabetes mellitus with acute complications 10 Diabète 55,117 DRC 8 Metabolic disorders Diabetic foot 14 Diabète 174,907 DRC 9 Opportunistic Infections - HIV/AIDS Chronic diarrhea 10 Infections opportunistes, Diarrhées chroniques 50,401 DRC 10 Opportunistic Infections - HIV/AIDS Pneumopathy, Pneumocyctis jiroveci 21 Infections opportunistes, Pneumopathies 181,375 DRC 11 Opportunistic Infections - HIV/AIDS Pneumopathy, pulmonary TB 21 Infections opportunistes, Pneumopathies 144,345 DRC 12 Opportunistic Infections - HIV/AIDS Pneumopathy, bacterial pneumonia 21 Infections opportunistes, Pneumopathies 60,054 DRC 13 Opportunistic Infections - HIV/AIDS Encephalitis 14 Infections opportunistes, Encéphalites 69,187 DRC 14 Opportunistic Infections - HIV/AIDS Cryptococcal meningitis 14 Infections opportunistes, Méningite à cryptocoques 114,091 DRC 15 Opportunistic Infections - HIV/AIDS Dermatological disease, Kaposi 10 Infections opportunistes, Affections dermatologiques 103,268 DRC 16 Opportunistic Infections - HIV/AIDS Dermatological disease, Herpes Zoster 10 Infections opportunistes, Affections dermatologiques 57,135 DRC 17 Opportunistic Infections - HIV/AIDS Cerebral toxoplasmosis 21 Infections opportunistes, Encéphalites 228,952 15,221 79,870