costing

In recent years, commitments from the government and major donors have led to improved tuberculosis (TB) control in Indonesia, with reductions in both prevalence and incidence. The nation’s economic status has also improved; however, this has caused many donors to reduce their contributions to the nation’s health programs.  Compounding this financial challenge is the rising prevalence of drug resistant strains of TB that further tax the health system with the cost of expensive services and medicines needed to care for these patients.

Management Sciences for Health (MSH) under USAID’s TB CARE I project, is assisting the Ministry of Health’s National TB Program (NTP) to develop ways to increase domestic financing for Indonesia’s TB control initiatives. Possible solutions include: increased contributions from national health insurance and government budgets, corporate social responsibility programs, and improvements in cost-effectiveness and efficiency.

Children in Yogyakarta, Indonesia, a community supported by TB CARE I volunteers. {Photo credit: D. Collins/MSH.}Photo credit: D. Collins/MSH.

Each year, as many as 64,000 people die from tuberculosis (TB) in Indonesia. Although the Ministry of Health’s (MOH) National TB Program (NTP) has made great progress over the last few years, the country is still one of twenty-two high TB-burden countries in the world. Indonesia is also one of the twenty-seven countries considered to have a high burden of multi-drug resistant TB (MDR-TB). In 2011, the nation reported 6,100 cases of MDR-TB.

Donor funding has been a major factor in the success of Indonesia’s TB program over the last few years, especially The Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) grants.  Indonesia has, however, progressed economically and is now a relatively low priority for Global Fund grants, which are expected to end or reduce significantly by 2015.

Despite Indonesia’s economic growth, the sustainability of the TB program will be a major challenge without support from this critical donor, especially during the funding transition period.

My recent field visit has given me a great perspective on one of MSH’s major activities - the costing of health services. MSH has extensive costing experience in East Asia & Pacific, Latin America & the Caribbean, Southern Africa, and West Africa.

MSH developed and has helped manage multiple applications of the CORE Plus (Cost and Revenue Analysis Tool Plus). CORE Plus is a tool that helps managers and planners estimate the costs of individual services and packages of services in primary health care facilities as well as total costs for the facilities. The cost estimates are based on norms and can be used to determine the funding needs for services and can be compared with actual costs to measure efficiency.

Costing of health care services is a powerful exercise whose data and results can be used for a number of things. When the cost of a package of services is determined, the analysis can be used for practical purposes, such as planning and prioritization or allocation of funds based on known cost figures. Results from a costing study can also be used to set appropriate user fees or other prices linked to provision of services. Finally, results of a costing study can be used as an advocacy tool to ensure that appropriate funds are allocated for the package of services.

Millions of people around the world die each year from preventable diseases because they cannot access affordable health care. Developing countries often struggle with insufficient resources and they face numerous challenges trying to strengthen weak health systems. A strong health system working well at all levels, from the household to the community to health facilities to national authorities, can provide effective services to improve the health of the people they serve.

Health financing is the critical foundation for strengthening health systems and ultimately for achieving health impact. Health financing is the starting point – money is the fuel to start and keep a strong health system running. Health financing includes generating funds, distributing those funds, ensuring effective and efficiency use of funds, and protecting the poor from the financial hardship of accessing health services. Without financial resources and proper management of these resources, health workers, health facilities, and medicines would not exist. In difficult economic times, generating those resources seems an insurmountable task. Yet some countries are showing how it can be done.

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