Calculating the Unit Cost for a Patient Treated at the Outpatient Department of National Hospital Galle, Sri Lanka

In the vast machinery of a public health system, there is a quiet but critical question that often goes unanswered: how much does it actually cost to see a doctor? In countries where medical care is provided free at the point of service, the money does not vanish; it is simply pooled from taxes and spent on salaries, medicines, electricity, and the buildings that house the care. For hospital administrators and government planners, knowing the precise price of a single patient visit is not just an accounting exercise; it is the foundation of rational budgeting. Without these numbers, it is impossible to know if a hospital is using its resources wisely, where the money is going, or how to prepare for the future. This field of study, known as hospital costing, seeks to trace every rupee spent by an institution and attach it to the specific services it produces, turning a massive, blurry pile of expenses into a clear picture of value.

In Sri Lanka, where the public health sector is the primary source of care for millions, such detailed cost data has been scarce, particularly for outpatient departments. These are the busy gateways where the majority of patients first enter the hospital system, often waiting in large numbers to be seen, prescribed medication, or sent for tests. To fill this gap, a team of researchers turned their attention to the National Hospital Galle, a major tertiary referral center in the southern part of the country. Their goal was straightforward: to calculate exactly how much the hospital spends to treat one person in its outpatient clinic, and to break down that total into the specific ingredients that make up the cost. They wanted to move beyond general estimates and provide a concrete, context-specific number that local managers could use to make better decisions.

The researchers looked at the hospital's operations during a single month in late 2024. They did not follow individual patients from start to finish, which would have been incredibly difficult and time-consuming. Instead, they used a method called step-down costing, which is like peeling back the layers of an onion to see where the money comes from. They started by identifying all the different parts of the hospital that support the outpatient clinic, from the administration office and the cleaning crew to the electricity supply and the security guards. They also looked at intermediate services like the laboratory and the outdoor pharmacy, which provide essential support to the doctors and patients. By gathering data from payroll records, supply registers, and utility bills, they assigned a monetary value to every single resource used during that month.

Once they had gathered these figures, they began the process of allocation. Since many resources, such as the building's electricity or the salary of a security guard, are shared across the entire hospital, the team had to decide how much of that cost belonged specifically to the outpatient department. They used logical rules to make these divisions. For example, they calculated the portion of the electricity bill that should be charged to the outpatient clinic based on the amount of floor space that clinic occupies. Similarly, they split the cost of laboratory staff based on how many tests were actually performed for outpatient patients versus other parts of the hospital. This systematic approach allowed them to funnel all the indirect and shared costs down into the final bucket representing the outpatient department.

The result of this careful accounting was a clear picture of the financial reality for that month. During the study period, the hospital treated 31,406 patients in its outpatient department. The total cost to run the clinic, including staff salaries, medicines, tests, and overheads like water and cleaning, came to 12,466,029.32 Sri Lankan Rupees. When the researchers divided this massive total by the number of people treated, they found that the cost to provide care for a single patient visit was 396.93 Sri Lankan Rupees. This figure represents the provider-side cost, meaning it is what the hospital spends, not what the patient pays, since the service is free for the visitor.

Breaking down this total revealed where the money was actually going. The largest chunk of the budget, nearly 60 percent, went to paying the people who work there. Salaries for doctors, nurses, and support staff were the dominant expense, followed by the cost of medicines, which accounted for about 23 percent of the total. Diagnostic investigations, such as blood tests and X-rays, made up a smaller but still significant portion at roughly 4.7 percent. The remaining costs covered utilities like electricity and water, administrative overheads, and the depreciation of equipment and furniture. The study noted that electricity alone was a major expense, highlighting how general hospital operations contribute to the cost of even a simple outpatient visit.

The researchers were careful to note what their numbers did not include. Because the outpatient building was more than twenty years old, they could not reliably estimate its current replacement value, so they excluded the cost of the building itself from the calculation. This means the final figure of 396.93 Rupees is likely lower than the full economic cost of the service, as it does not account for the massive capital investment required to maintain the physical structure. Additionally, the study covered only one month, so it could not capture seasonal changes in patient numbers or disease patterns that might occur at other times of the year.

Despite these limitations, the findings offer a valuable baseline for understanding the efficiency of public healthcare in Sri Lanka. The cost per visit is relatively low compared to similar studies in other countries, a fact the authors attribute to the country's modest wage levels and the high volume of patients that spreads fixed costs over a large number of visits. The study confirms that in this setting, the workforce is the primary driver of cost, followed closely by the supply of medicines. This suggests that any future efforts to improve efficiency or manage budgets will need to focus on how staff are deployed and how medicines are prescribed and managed.

Ultimately, this research provides more than just a number; it offers a tool for better management. By knowing exactly what a single visit costs, hospital leaders can make more informed decisions about their budgets, plan for future needs, and identify areas where resources might be used more effectively. The study demonstrates that even in a resource-constrained environment, it is possible to use routine records to generate meaningful cost data. As the authors suggest, expanding this kind of detailed accounting to other departments and hospitals across the country could strengthen the entire health system, ensuring that the promise of free care is backed by a sustainable and well-understood financial foundation.