Understanding health costs in the Jordanian public health sector: analysis of the cost-to-charge ratio

Abstract

Abstract Objectives To investigate the cost to charge ratios (CCRs) and understand the costs of procedures, laboratory tests and imaging in the public health sector in Jordan.. Methods CCRs were estimated using published public data and data obtained from the financial departments of the three main public health programs in Jordan including the Ministry of Health, Military Royal Medical Services , and university affiliated hospitals. CCR was estimated by dividing the total cost by total charges (CCR = Total Hospital [or Cost Centre] Cost/Total Hospital [or Cost Centre] Charges) for the fiscal year 2016–2017. The charges master lists of procedures, diagnostics, and lab services were analyzed. Costs of most performed procedures, diagnostics and lab services were estimated using CCR approach. The cost of service equaled the billing charge (unit price) multiplied by the overall CCR of a provider. Key findings CCRs for the Ministry of Health ranged between 1.09 and 2.3 and expenditures approximately overweight charges two times. CCRs ranged between 0.31–0.89 for the Military Royal Medical Services and ranged between 0.34–0.79 for university-affiliated hospitals. Costs for 187 of the most performed procedures, diagnostics and lab tests were estimated. Conclusions CCR methodology is considered uncomplex in practice and useful to approximate costs from charges. The cost to charge of MoH was too high reflecting the highly subsidized health services offered by MoH facilities. Sustaining health service delivery and quality might be unwarranted. Master charge lists are old dated and not calibrated annually. There is no evidence based records on how these been estimated. Investing in cost data collection and analysis is demanded to enhance healthcare management.