Estimating the unit costs of healthcare service delivery in India: addressing information gaps for price setting and health technology assessment

Bahuguna, P. , Guinness, L., Sharma, S., Chauhan, A. S., Downey, L. and Prinja, S. (2020) Estimating the unit costs of healthcare service delivery in India: addressing information gaps for price setting and health technology assessment. Applied Health Economics and Health Policy, 18, pp. 699-711. (doi: 10.1007/s40258-020-00566-9) (PMID:32170666) (PMCID:PMC7519005)

Abstract

Background: India’s flagship National Health insurance programme (AB-PMJAY) requires accurate cost information for evidence-based decision-making, strategic purchasing of health services and setting reimbursement rates. To address the challenge of limited health service cost data, this study used econometric methods to identify determinants of cost and estimate unit costs for each Indian state. Methods: Using data from 81 facilities in six states, models were developed for inpatient and outpatient services at primary and secondary level public health facilities. A best-fit unit cost function was identified using guided stepwise regression and combined with data on health service infrastructure and utilisation to predict state-level unit costs. Results: Health service utilisation had the greatest influence on unit cost, while number of beds, facility level and the state were also good predictors. For district hospitals, predicted cost per inpatient admission ranged from 1028 (313–3429) Indian Rupees (INR) to 4499 (1451–14,159) INR and cost per outpatient visit ranged from 91 (44–196) INR to 657 (339–1337) INR, across the states. For community healthcare centres and primary healthcare centres, cost per admission ranged from 412 (148–1151) INR to 3677 (1359–10,055) INR and cost per outpatient visit ranged from 96 (50–187) INR to 429 (217–844) INR. Conclusion: This is the first time cost estimates for inpatient admissions and outpatient visits for all states have been estimated using standardised data. The model demonstrates the usefulness of such an approach in the Indian context to help inform health technology assessment, budgeting and forecasting, as well as differential pricing, and could be applied to similar country contexts where cost data are limited.

• Item Type: Articles
• Additional Information: The cost data collection was funded by the Intramural Research Grant of Post Graduate Institute of Medical Education and Research, Chandigarh, India http://pgimer.edu.in/PGIMER_PORTAL/PGIMERPORTAL/home.jsp), as well as a grant received from the United States Agency for International Development (USAID), New Delhi. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. LD and LG contributed to this work under the International Decision Support Initiative (iDSI) (www.idsihealth.org), which supports countries to get the best value for money from health spending. iDSI receives funding support from the Bill & Melinda Gates Foundation, the UK Department for International Development and the Rockefeller Foundation. This work was supported by the Bill & Melinda Gates Foundation [OPP124589].
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Bahuguna, Dr Pankaj
• Authors: Bahuguna, P., Guinness, L., Sharma, S., Chauhan, A. S., Downey, L., and Prinja, S.
• College/School: College of Medical Veterinary and Life Sciences > School of Health & Wellbeing > Health Economics and Health Technology Assessment
• Journal Name: Applied Health Economics and Health Policy
• Publisher: Springer
• ISSN: 1175-5652
• ISSN (Online): 1179-1896
• Published Online: 14 March 2020
• Copyright Holders: Copyright © The Author(s) 2020
• First Published: First published in Applied Health Economics and Health Policy 18:699-711
• Publisher Policy: Reproduced under a Creative Commons license