Costing-of-procedure - Ophthalmic procedures

Costing of a procedure is not taught in medical schools,

1. Dr.Elankumaran P
Bangalore
Costing of your procedures

2. How do you deicde the cost?
Competitor pricing
Scientific Costing

3. OPD COSTING
CONSULTATION – 150 - 250 PER CASE
MICS - 25000

4. Why costing ?
Do you know how much you are earning ?
Accounting profit vs Real Profit
Pricing and Profitability

5. Costing & Profitability
1.Understanding fixed costs and variable costs
2.Break Even Point
3.Revenue vs Collections
4.Converting fixed costs in to variable costs
Consultati
on packages sim
ilar to Cataract packages

6. Costing & Profitability
•Components of costs having impact on profitability
–Capital Cost- technology, new vs old
– Materials
–Manpower
–Outsourcing or shared services concept

7. Packages
Within a fixed budget
constraint, if the
healthcare system spends
more on one thing, it has
to do less of something
else
You can only spend Rs1
once
Plan carefully

8. Costing?
Absorption Costing
Marginal Costing
Activity Based Costing

9. Marginal Costing
•Marginal Costing differentiates costs in to
fixed and variable costs.
•Decisions are made based on the variable
costs.
•It is used in analysis of cost of additional unit
of service.
•It is useful in deciding outsourcing of an
activity

10. Activity based costing
Activity-based costing (ABC) is a costing
method that identifies activities in an
organization and assigns the cost of each
activity to all products and services
according to the actual consumption by
each. Therefore, this model assigns more
indirect costs (overhead) into direct costs
compared to conventional costing.

11. Medical departments
Out patient IN patient
M
ost of the staff is shared

12. Departments
Medical supportMedical Dept Service support

13. Indirect costs
Front office
Stores
Engineering
CSSD
House keeping
Telephone, internet, advertisement
Laundry

14. OPD COSTING
OPD charges costing
Per case
Fixed costlongivityPer year
Per
monthPER DAY
50 cases
100 cases150 cases200 cases250 cases
Fixed costs
OP Floor rent 24000020000 800
OPD instruments 20000007 yrs life285714.323809.52952.381
CMC 20000016666.67666.6667
Standard consummables in OPD + Stationary 30000025000 1000
Recurring cost/ month
Staff salaries + incentives 80000066666.672666.667
Electric + Bwssb bill + generator fuel cost

52000 2080
Sub total 1 204142.98165.714163.314381.6571454.438140.8285732.66286
CONSULTATION – 400 PER CASE
8165.7/400 = 20.41
O
PD Consultation fee = CO
ST + 500
400 + 500 = 900 rupees

15. OPD COSTING
Navashakthi Nethralaya
OPD charges costing
Per case
Fixed costlongivityPer year
Per
monthPER DAY
50 cases
100 cases150 cases200 cases250 cases
Fixed costs
OP Floor rent 1200000100000 4000
OPD instruments 70000007 yrs life100000083333.333333.333
CMC - 70000058333.332333.333
Standard consummables in OPD + Stationary 60000050000 2000
Recurring cost/ month
Staff salaries + incentives 80000066666.672666.667
Electric + Bwssb bill + generator fuel cost

52000 2080
Sub total 1 410333.316413.33328.2667164.1333109.422282.0666765.65333
CONSULTATION – 400 PER CASE
16413/400 = 41.03
O
PD Consultation fee = CO
ST + 500
400 + 500 = 900 rupees

16. OPD COSTING
Navashakthi Nethralaya
OPD charges costing Per case
Fixed costlongivityPer year
Per
monthPER DAY
50 cases
100 cases150 cases200 cases250 cases
Fixed costs
OP Floor rent 360000030000012000
OPD instruments 160000007 yrs life2571429214285.78571.429
CMC - 1800000150000 6000
Standard consummables in OPD + Stationary 60000050000 2000
Recurring cost/ month
Staff salaries + incentives 1680000140000 5600
Electric + Bwssb bill + generator fuel cost

52000 2080
Sub total 1 906285.736251.43725.0286362.5143241.6762181.2571145.0057
CONSULTATION – 400 PER CASE
36251.43/400 = 90.62
O
PD Consultation fee = CO
ST + 500
400 + 500 = 900 rupees

17. Operation Theaters
•Utilization of OT-Key factor scheduling of
surgeries and Idle time.
•Manpower Cost.
•OT Materials. –
– Directly Billable
–Not Billable. •
•Power & Electricity consumption.

18. Ot charges costing
Per case
Fixed costlongivityPer yearPer month
30 cases
50 cases100 cases150 cases200 cases
Fixed costs
OT Floor rent 3600000 300000
Clean room cost 320000010 yrs life 32000026666.67
CSSD instruments 400000010 yrs life 40000033333.33
CMC - (CSSD + AHU) 300000 25000
OT & Inst maintanence charges 20000016666.67
Standard consummables in OT 600000 50000
Recurring cost/ month
Staff salaries + incentives 1680000 140000
Electric + Bwssb bill + generator fuel cost

52000
Sub total 1 643666.721455.5612873.336436.6674291.1113218.333
Special machine charges
Machine charges 120000007 yrs life 1714286142857.14761.9052857.1431428.571952.381714.2857
CMC + fixed consummables 50000041666.671388.889833.3333416.6667277.7778208.3333
Sub total 2 6150.7943690.4761845.2381230.159922.619
Total (sub total 1 + sub total 2) 27606.3516563.818281.9055521.274140.952
Recurring cost /case
MICS kit 9000 4500 4500 4500 4500 4500
IOL ( purchase cost) 7000 7000 7000 7000 7000 7000
Other Consummables (purchase cost) 2108 2108 2108 2108 2108 2108
Professional fees ( Surgeon + Anaes+ Assist) 12000 12000 12000 12000 12000 12000
Day care charges 1200 1200 1200 1200 1200 1200
Hospital charges ( administrative) 1000 1000 1000 1000 1000 1000
Grand Total/ case of MICS 55414.3544371.81 36089.933329.2731948.95
This is costing only
Profits to be added
Profit 25 to 30%
- Sm
all hospitals
Profit 15 to 20%
- Large hospitals

19. Role of Ophthalmic societies
Role of medical colleges