Modelling net expenditure of hospitals in the Cape Province

Modelling the net expenditure of provincial hospitals in the Cape Province during 1989/90 on the number of inpatient days and outpatient visits (emergencies included) showed that on average the cost of a single outpatient visit is equivalent to 43% of the cost of an inpatient day in small hospitals. In specialist and academic hospitals this proportion increases to 70%. The current proportion of 33% used in the standardisation of hospitals is therefore inadequate. Multiple regression can be used to estimate the expected net expenditure for each hospital, which can then be used as a reference value. The need for separate accounting and reporting of the expenditure on outpatients is identified.