What does primary health care cost and can we afford to find out? Rationale and methodology for a cost analysis of the Diepkloof Community Health Centre, Soweto

Abstract

Accurate information on the costs of providing priInary health care (PHC) services is now an urgent priority for health policy makers and planners, if the Government's stated commitment to an adequate PHC system is to be realised. Cost information is also a critical management tool for both public and private sector providers. In this context, the inability of public sector PHC providers to generate accurate cost accounting information is a serious shortcoIDing. In an attempt to address this lack of local PHC cost data, a detailed analysis of the costs of PHC services was undertaken at the Diepkloof Community Health Centre (DK) in Soweto during 1990. The study aimed to assess the cost of each service provided at DK and where possible, to identify areas of inefficiency. This paper is the first of two that report the findings of this study. It briefly describes the methodology employed and presents the major results. These raise several important management issues. Most importantly, the study suggests that there is excess capacity in the administrative and in several of the clinical areas of this Community health centre; this implies that the average cost per service could be reduced in several areas. Certain services, such as home visits, are particularly expensive and require careful evaluation. The policy implications of this analysis are also examined. The high cost of several services implies that extension of this type of PHC service to all urban and rural areas is likely to be unaffordable. The limitations of generalisations based on data from one health care setting are recognised, as are the effects of possible improvements in efficiency and economies of scale on these conclusions. The relatively high costs of this setting also suggest comparisons with other PHC settings. Tentative comparisons with other public and private sector settings are given. The absence of comparisons of quality of care and outcomes between settings, means that such comparisons should be made with caution. The paper also examines the cost of this kind of research and speculates on its benefits.