Measuring Public Hospital Costs: Empirical Evidence from the Dominican Republic

This paper presents a methodology and analysis to determine the actual costs of inpatient, emergency and outpatient services in a Dominican hospital. By developing and applying a set of survey instruments to a large sample of patients, the authors were able to measure and cost all hospital staff time, in-kind goods, overhead and the depreciated value of plant and equipment related to the treatment of each patient. The study finds that the hospital budget was 50 percent higher than actual costs of services. Further, while spending on personnel comprised the vast majority of the total hospital budget, actual personnel costs for patient treatment were low. Based on these results, the authors suggest that the hospital suffers from gross inefficiency, chaotic medical care organization and poor management.