Cost and efficiency analysis in Iranian primary health centers: a micro costing and data envelopment analysis

Health Complex Model was implemented to provide primary health care services in urban, especially in slum areas. As a pilot at a provincial level, Chamran Health Complex offers healthcare for more than 57,000 residents of Tabriz. Despite the necessity of cost information in healthcare decision-making, there was limited knowledge about the unit cost of services. This study aims to analyze the cost and efficiency of health centers.

Activity-Based Costing method with direct and step-down allocation methods was adopted. We estimated unit costs in a hypothetical scenario according to national standards to quantify the gap between current and standard practice. Input-oriented Data Envelopment Analysis was administered to measure the efficiency of health centers.

The total cost of the complex was $2,841,897, of which 67% ($1910373) and 33% ($931523) were accounted for direct and indirect costs, respectively. The vaccination center had the lowest ($9), and the occupational health center had the highest average unit cost ($76). The average technical efficiency of the health centers was 0.519, where the HC1 and HC3 showed the best performance.

There is remarkable variability in service costs across health centers, which must be addressed in performance management and contracting practices. Although we found a gap between current and standard practice in terms of staff and facilities according to national standards, Chamran Health Complex has an untouched capacity that can be utilized with better planning and without incurring additional costs. It raises the need for revising national standards by the Iran Ministry of Health.