The Extra Cost of Granting Autonomy to Public Hospitals

Document Type : Original Article (s)

Authors

1 Department of Health Management, Ministry of Health and Medical Education, Tehran, Iran

2 Department of Health Economics, Ministry of Health and Medical Education, Tehran, Iran

3 Assistant Professor, Department of Health Management and Economics, School of Public Health, Tehran University of Medical Sciences, Tehran, Iran

Abstract

Background: Reform of structure and improvement of healthcare providing system especially in hospitals are among the most important priorities of health systems. Granting autonomy to university hospitals is a recommended in this regard. The aim of this study was to determine the costs and credits imposed to the system by granting autonomy to public hospitals.Methods: To calculate the necessary funding, two components of physician fee and hotelling were accounted. The available statistics and documentations including the number of regular and special beds of public hospitals, occupied bed coefficient, the extra cost of hotelling due to granting autonomy, relative value unit, and the annual number of health services in country were extracted from the Ministry of Health and Medical Education and insurance organizations. Then, due to study modeling the amount of increased costs and funding of granting autonomy to hospitals was estimated.Findings: The estimated cost of physician fee for procedures was about 7,026 billion IR Rials and cost of hotelling was nearly 8,140 billion IR Rials before granting autonomy to public hospitals. In autonomy condition of hospitals, the annual surplus cost of 27,881 billion IR Rials was required including 15,669 billion IR Rials for physician fees and 12,211 billion IR Rials for hotelling. Conclusion: In the condition of granting autonomy to public hospitals, the extra funding was about 28,000 billion IR Rials which must be paid by the Ministry of Health and Medical Education and insurance organizations.

Keywords


  1. Jafari Sirizi M, Mohammad K, Yazdani Sh, Parkerton P, Yunesian M, Akbari F, et al. Qualitative assessment of dimensions and degree of autonomy granting to university hospitals. Hakim 2008; 11(2): 59-71.
  2. Preker AS, Harding A. Innovations in Health Service Delivery: The Corporatization of Public Hospitals. Washington DC: The World Bank; 2003.
  3. Bogue RJ, Hall CH, La Forgia GM. Hospital Governance in Latin America: Results of a Four Nation Survey. Washington DC: The World Bank; 2007.
  4. Castano R, Bitran RA, Giedion U. Monitoring and Evaluating Hospital Autonomization and Its Effects on Priority Health Services. Partners for Health Reformplus. Abt Associates Inc: Bethesda; 2004.
  5. World Health Organization. Health Centres: The 80/20 Imbalance - Burden of Work vs Resources. Geneva: WHO; 1999.
  6. Harding A, Preker AS. Understanding Organizational Reforms: The Corporatization of Public Hospitals. Washington DC: World Bank; 2000.
  7. Abdullah MT, Shaw J. A review of the experience of hospital autonomy in Pakistan. Int J Health Plann Manage 2007; 22(1): 45-62.
  8. Ministry of Health and Medical Education. Book of Relative Value of Diagnostic and Therapeutic Services (the Old Tariff Book), and Drug Treatment Affairs. Tehran: Ministry of Health and Medical Education; 1996.
  9. Olyaeemanesh A, Salehi Gh, Khamseh A, Zandi A, Babashahy S. Booklet of Tariff of Diagnostic and Therapeutic Services. Tehran: Ministry of Health and Medical Education; 2010. [In Persian].
  10. Olyaeemanesh A, Manavi A, Monazzam K. Documentation and Studies Conducted at the Department of Health Economics, Department of Health, Ministry of Health and Medical Education; 2004 to 2009. [In Persian].
  11. Parliament of Islamic Republic of Iran. Iran Employment Law, Issuing date: 1966 [Online] 2008. [cited 2008 Apr 2]; Available from: URL: http://rc.majlis.ir/fa/report/show/738896
  12. Shaw RP. New Trends in Public Sector Management in Health [Online] 2011. Available from: URL: http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/Shaw-NewTrends.pdf.
  13. Jakab M, Preker AS, Harding A. The Missing Link? Hospital reform in transition economies. Innovation in Health Services. Washington DC: The World Bank; 2003.
  14. Rethelyi JM, Miskovits E, Szocska MK. Organizational Reform in the Hungarian Hospital Sector. Institutional Analysis of Hungarian Hospitals and the Possibilities of Corporatization. Washington DC: The World Bank; 2002.
  15. Hennock M. China's health insurance system is failing poor people. BMJ 2007; 335(7627): 961.