Cost of Delivering Secondary Healthcare Through the Public Sector in India

Government spending on provision of secondary healthcare has increased four-fold (in real terms) over the last decade in India. The evidence on the cost of secondary care to the health system is limited. The present study estimates the total and unit cost of services at community health centres (CHCs) and district hospitals (DHs) across India.

The present study was undertaken in 19 CHCs and ten DHs across the four Indian states of Himachal Pradesh, Tamil Nadu, Kerala and Odisha to assess the economic cost of health services using a bottom-up methodology. Data on annual consumption of both capital and recurrent resources, spent in the provision of health services during the financial year of 2014-2015, were collected. Capital expenditure was annualised and shared resources were allocated to each of the shared activities using appropriate statistics.

The mean annual costs of providing services at the CHC and DH level were 17 million Indian rupees (₹) ($US0.27 million) and ₹147 million ($US2.3 million), respectively. More than half of this annual cost was attributed to salaries (57% and 62% for CHC and DH level, respectively) and curative care (60% and 65%, respectively). At CHCs, the unit cost ranged from ₹134 (95% confidence interval [CI] 104-160) for an outpatient consultation to ₹3833 (95% CI 2668-5839) for institutional delivery. Similarly, at DH level, the unit cost varied from ₹183 (95% CI 124-248) for an outpatient consultation in an orthopaedics department to ₹4764 (95% CI 3268-6960) for an operation.

The estimates from the present study may help generate benchmarks to aid in setting up provider payment rates and be used in future economic evaluations.