Page 72 - Htain Manual

Estimation of land and building costs

1. Determine cost of a recently built building or new part of same building and

extrapolate the cost of whole healthcare facility. Adjustments structure,
size and inflation should be made for old building.

2. Estimate the cost of constructing same healthcare facility at present by

taking inputs form civil department of hospital.

3. Use local data from quotations of public sector constructions and adjust for

area.
4. Take annual lease rate of similar facility in the area as proxy and consider

infrastructure as recurrent cost.

7. Import or entre data in Excel and clean to make it appropriate for analysis. Check the

data for format (e. g. units) and completeness, remove irrelevant data or irreconcilable

data. All recurrent and capital costs should be apportioned rationally across the

services provided in given healthcare facility using time allocation studies (for salaries)

or number of patients (e.g. for overheads). During analysis of capital assets, depreciate
the cost and also annualize the same over period of its expected life. If original price

of asset and year of purchase is available, adjustment for inflation can be done using

GDP deflator or Consumer Price Index; otherwise, it is better to use replacement cost
of the asset. If costs are being estimated from clinical trial data, modelling may be

used to extrapolate costs beyond end-point of the trial. All assumptions,

extrapolations and steps of analysis should be documented to improve transparency

of analysis and any iteration, if required.

8. Present results in a format relevant for stakeholders, e.g. details about share of
different resources in total cost, segregation according to type of facility, occupancy

rates and location etc. Detailed methodology, assumptions and limitations of the

study can also be incorporated into outcome report for peer-review. Sensitivity
analysis will add to quality of study by adjusting results to variation due to salaries

across the states, rates of procurement of drugs.etc.

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