by Ravi P. Rannan-Eliya
HPP Occasional Paper Series

This study contains a unit cost analysis carried out on the results of the Health Facility Survey, Sri Lanka, 1992. It analyses health facility characteristics, inputs and outputs, based on the data set collected from a sample of 781 government and private hospitals and clinics in four districts in Sri Lanka. The primary goal of the study was to obtain estimates of the csts of providing health services in inpatient and outpatient facilities in both government and private sectors. Service indicators were examined to make assessments about the performance of the health facilities.

Prior to analysing unit costs the data had to be cleaned and validity checks carried out. Then a suitable system of classification was devised that created groups that were homogenous and mapped to the usual tertiary and primary levels of health care but were still large enough to permit adequate comparisons. In both public and private sectors, facilities were classified into complex inpatient, basic inpatient and outpatient. Cost calculations were carried out only for facilities providing Western care. Costs per bed-day available, bed-day occupied, admission and outpatient were found for each of the categories. Service indicators calculated were the bed-occupancy rate, bed turnover rate and the average length of stay.

The findings of this cost study confirm the view that unit costs are highest in tertiary facilities – a feature common to most developing countries. Lower level facilities on the other hand are found to have relatively high unit costs mainly as a result of low occupancy and turnover. The need to improve illustration at lower levels of health care provisions and ensure that referral mechanisms operate efficiently so that higher level facilities provide the specialised services is accentuated.

Section 2 contains a literature review on costing analysis, a discussion of the underlying economic theory. It will also state the aims of this study and the hypotheses that are to be tested. This will be followed by a description of the Sri Lankan health care system and the Health Facility Survey, 1992 in Section 3. Section 4 contains the methodology of this study. In section 5 the results of the study will be presented and described. Section 6 will analyse the findings, make policy recommendations and also discuss ways of improving the scope of this form analysis. The final section will bring together the key issues raised in t his study.