The Cost of Providing District‐Level Surgery in Malawi

Background Three district hospitals in Malawi that provide essential surgery, which for many patients can be lifesaving or prevent disability, formed the setting of this costing study. Methods All resources used at district hospitals for the delivery of surgery were identified and quantified. The hospital departments were divided into three categories of cost centres—the final cost centre, intermediate and ancillary cost centres. All costs of human resources, buildings, equipment, medical and non‐medical supplies and utilities were quantified and allocated to surgery through step‐down accounting. Results The total cost of surgery, including post‐operative care, ranged from US$ 329,000 per year to more than twice that amount at one of the hospitals. At two hospitals, it represented 16–17% of the total cost of running the hospital. The main cost drivers of surgery were transport and inpatient services, including catering. The cost of a C‐section ranged from $ 164 to 638 that of a hernia repair from $ 137 to 598. Evacuations from uterus were cheapest mainly because of the shorter duration of patient stay. Conclusion Low bed occupancy rates and utilisation rates of the operating theatres suggest overcapacity but may also indicate a potential to scale up surgery. This may be achieved by adding surgical staff, although there may be rate‐limiting steps, such as demand for surgery in the community or capacity to provide anaesthesia. If a scale‐up of surgery cannot be realised, hospital managers may be forced to reduce the number of beds, reorganise wards and/or reallocate staff to achieve better economies of scale.