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Cost of Delivering Secondary Healthcare Through the Public Sector in India


  • Shankar Prinja

    () (Post Graduate Institute of Medical Education and Research)

  • Akashdeep Singh Chauhan

    (Post Graduate Institute of Medical Education and Research)

  • Pankaj Bahuguna

    (Post Graduate Institute of Medical Education and Research)

  • Sakhtivel Selvaraj

    (Public Health Foundation of India)

  • V. R. Muraleedharan

    (Indian Institute of Technology (Madras))

  • Thiagarajan Sundararaman

    (Tata Institute of Social Sciences)


Background 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. Methods 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. Results 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. Conclusion 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.

Suggested Citation

  • Shankar Prinja & Akashdeep Singh Chauhan & Pankaj Bahuguna & Sakhtivel Selvaraj & V. R. Muraleedharan & Thiagarajan Sundararaman, 2020. "Cost of Delivering Secondary Healthcare Through the Public Sector in India," PharmacoEconomics - Open, Springer, vol. 4(2), pages 249-261, June.
  • Handle: RePEc:spr:pharmo:v:4:y:2020:i:2:d:10.1007_s41669-019-00176-9
    DOI: 10.1007/s41669-019-00176-9

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    References listed on IDEAS

    1. Oommen C. Kurian, 2015. "Financing Healthcare for All in India: Towards a Common Goal," Working Papers id:6932, eSocialSciences.
    2. Michael K. Chapko & Chuan‐Fen Liu & Mark Perkins & Yu‐Fang Li & John C. Fortney & Matthew L. Maciejewski, 2009. "Equivalence of two healthcare costing methods: bottom‐up and top‐down," Health Economics, John Wiley & Sons, Ltd., vol. 18(10), pages 1188-1201, October.
    3. Shankar Prinja & Gursimer Jeet & Ramesh Verma & Dinesh Kumar & Pankaj Bahuguna & Manmeet Kaur & Rajesh Kumar, 2014. "Economic Analysis of Delivering Primary Health Care Services through Community Health Workers in 3 North Indian States," PLOS ONE, Public Library of Science, vol. 9(3), pages 1-9, March.
    4. Shankar Prinja & Akashdeep Singh Chauhan & Anup Karan & Gunjeet Kaur & Rajesh Kumar, 2017. "Impact of Publicly Financed Health Insurance Schemes on Healthcare Utilization and Financial Risk Protection in India: A Systematic Review," PLOS ONE, Public Library of Science, vol. 12(2), pages 1-19, February.
    5. Brijesh C Purohit, 2016. "Health Care System Efficiency: A Sub-State Level Analysis For Orissa (India)," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 28(1), pages 55-74, March.
    6. Waters, Hugh R. & Hussey, Peter, 2004. "Pricing health services for purchasers--a review of methods and experiences," Health Policy, Elsevier, vol. 70(2), pages 175-184, November.
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    1. Chris Sampson’s journal round-up for 1st June 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-06-01 11:00:00

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