A model for calculating costs of hospital wards: an Italian experience

Until recently Italian hospitals had no cost accounting or activity data collection systems, being formally required only to do financial book-keeping. The cost analysis method presented here might be used to set up detailed and complete hospital cost accounting, which would permit a better understanding of patterns of resource distribution among departments, better opportunities for cost saving and cost control for hospital managers and health authorities. The study first identified a framework within which to assess the annual cost related to a hospital ward, then calculated the mean bed day cost for each speciality. Cost data were collected over one year in 1996 from manually compiled records, at one local hospital in Northern Italy. Costs were estimated following a step-down allocation method. Wards requiring a major amount of resources per day of stay are intensive cardio-coronary unit (US$650.689), and ophthalmology (US$483.322). The less expensive ward is general medicine (US$148.645). The cost analysis method presented in this study might be used to set a detailed and complete hospital cost database, which is a necessary tool for hospital managers to realise cost control and cost recovery.