Two-tier charging in Maputo Central Hospital: Costs, revenues and effects on equity of access to hospital services

BACKGROUND: Special services within public hospitals are becoming increasingly common in low and middle income countries with the stated objective of providing higher comfort services to affluent customers and generating resources for under funded hospitals. In the present study expenditures, outputs and costs are analysed for the Maputo Central Hospital and its Special Clinic with the objective of identifying net resource flows between a system operating two-tier charging, and, ultimately, understanding whether public hospitals can somehow benefit from running Special Clinic operations. METHODS: A combination of step-down and bottom-up costing strategies were used to calculate recurrent as well as capital expenses, apportion them to identified cost centres and link costs to selected output measures. RESULTS: The results show that cost differences between main hospital and clinic are marked and significant, with the Special Clinic's cost per patient and cost per outpatient visit respectively over four times and over thirteen times their equivalent in the main hospital. DISCUSSION: While the main hospital cost structure appeared in line with those from similar studies, salary expenditures were found to drive costs in the Special Clinic (73% of total), where capital and drug costs were surprisingly low (2 and 4% respectively). We attributed low capital and drug costs to underestimation by our study owing to difficulties in attributing the use of shared resources and to the Special Clinic's outsourcing policy. The large staff expenditure would be explained by higher physician time commitment, economic rents and subsidies to hospital staff. On the whole it was observed that: (a) the flow of capital and human resources was not fully captured by the financial systems in place and stayed largely unaccounted for; (b) because of the little consideration given to capital costs, the main hospital is more likely to be subsidising its Special Clinic operations, rather than the other way around. CONCLUSION: We conclude that the observed lack of transparency may create scope for an inequitable cross subsidy of private customers by public resources.