Costs of district hospitals in South Africa

The district hospitals are an integral part of the district health system (DHS) in South Africa fulfilling several important functions. Using data obtained from relevant published reports. The district hospital costs were allocated using the ‘ingredients approach’ that combined a top-down method and step-down sequence. The costs in the treatment of patients were grouped into six cost centres: buildings, drugs, equipment, materials, personnel and utilities. The unit costs were broadly grouped into two categories using the hospital departments (fixed and variable costs) and input use (direct and indirect costs). More than 30% of the total public expenditure on hospitals in the country was on district hospitals between 1996/97 and 1998/99. They had more beds per population (1.08/1000) than other public hospitals. The bed occupancy rates in these hospitals were generally very low varying between 57% and 75%. The average length of stay (ALOS) was within acceptable range in the hospital except in Osindisweni hospital. Personnel costs were more than 70% and drugs only 3% to 6% of the total costs. McCord hospital was the most expensive using total and unit costs. Harrismith hospital had the lowest total costs and Osindisweni hospital the lowest unit cost. Most of the costs were fixed or direct costs in all the hospitals. There is the need for the adoption of measures to ensure that the hospitals are efficiently run while maintaining access for vulnerable groups.