Issues in the Costing of Public Sector Outpults The Public Medical Services of Malaysia Public Disclosure Authorized

World Banik Staff Workinlg Paper No. 207

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.3 ... Public Disclosure Authorized ISSUES IN THE COSTING OF PUBLIC SECTOR OUTPUTS:

THE PUBLIC MEDICAL SERVICES OF MALAYSIA

Peter S. Heller

Assistant Professor of Economics University of Michigan

Research Associate, Center for Research on Economic DeVelopment

June 1975 This paper is prepared for staff use. The views are those of the authors and not necessarily those of the Bank.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Bank Staff Working Paper No, 207

June 1975

ISSUES TN THE COSTING OF PUBLIC SECTOR OUTPUTS

THE PUBLIC MEDICLT, SERVICES OF MALAYSIA

This paper reports on one component of the research of RPO 296 (The Distributive Effects of Public Spending).

The bulk of the paper estimates the unit costs of outputs of Malaysia' s public medical care services. Chief among these are various kinds of clinic visits and hospital days. In the process the paper describes the accounting system of the Ministry of Health and its shortcomings in providing basic cost data, The paper also describes the methodology for estimating the various unit costs. Estimated are not only the recurrent costs authorized through the annual budget, but also the cost of capital in place, consis- ting of net rate of return and depreciation, associated with providing the various outputs, The paper discusses in detail some of the conceptual issues in deriving the various costs; e.g. the treatment of cost not clearly allocable by specific outputs, and, briefly compares Malaysian costs with those of Tunisia. It also presents a comprehensive description of the public system of health care. Hitherto knowledge concerning government cost functions has been rudimentary or non existent, notwithstanding its obvious value in guiding government decision-making toward more effective use of resources in achieving public goals. Consequently, in addition to its use in providing the unit costs of Malaysian public healthcare, the paper is also valua- ble as a pioneering effort in this largely neglected, but increasingly important area.

Prepared by: Peter Heller, Consultant, Development Economics Department TABLE OF CONTENTS Page

Preface and Summary iii I. Introduction 1 II. Background Characteristics on Malaysia's State of Development by 3 Socio-economic and Health Sector Indicators

III. The Budgeting and Accounting Process in Malaysia's Ministry of Health 12 IV. The Cost of Medical and Health Services in Peninsular Malaysia: 21 Methodology and Results

A. The Cost of Medical Services in the General and District Hospitals Total Hospital Expenditure 23 Outpatient Expenditure 24 Inpatient Expenditure 31 Observations on the Cost of Hospital Medical Services 33 B. Estimates of the Cost of Medical and Health Services in the Rural 37 Health System Maternal-Child Health Activities 40 General Outpatient Consultations of Main or Sub-health Centers 45 Dental Clinic Activities 47 Total Recurrent Health Center Expenditure and its Allocation 48 Across Activities Capital Costs 49 Observations on the Unit Cost of Rural Health Services 51 C. Imputation of the Cost of Training Medical and Paramedical Manpower 54 V. Application of Cost Estimates: The Incidence, Density and Technology 58 A. The Density of Health Services and Expenditure in Peninsular Malaysia 58 B. The Incidence of Hospital Inpatient Expenditure 61 C. Measures of the Technology of Production in the Health Sector 68 APPENDICES 71

i LI T OF TABLES

Page

1. Summary Statistics on the Demog-L ply and Health System of W. Malaysia 4 5 2. A Functional Breakdown of Total RXecurrent Central Government Health 19 Expenditure in Peninsular Malaysia: By State 1973 3. Summary Socio-economic Statistics on the States Encompassed by the 22 Sample of Hospitals and Rural Health In..;titutions 4. Estimates of the Unit Recurrent and Capital Cost of Outpatient and In- 25 patient Care in S-lected Hospitals of Peninsuiar Malaysia: 1973-1974 5. Volumie of Outpatient and Inpatient Services in Selected Malaysian 26 Hospitals: 1973 6. The Total Cost of Specialty Inpatient Care and the Total Staff Cost 27 of Outpatient Care in General Hospitals: 1973-74 7. The Average Cost of Outpatient Drug Prescriptions in Four Malaysian 29 Hospitals: 1973 8. Estimates on the Average Cost of Inpatient and Outpatient Treatment in a 34 Sample of Malaysian Hospitals 9. Comparison of the Average Cost of Care in the Hospitals of Malaysia and 37 Tunisia 10. Estimates of the Unit Recurrent and Capital Cost of the Medical and 41 Maternal-Child Health Services of the Rural Health System: Penang, Kelantan and Selangor, 1974 11. Estimates of the Ur±it Recurrent and Capital Cost of the Medical and 42 Maternal-Child Health Services of the Rural Health System: Johore and Kedah, 1974 12. The Volume of Curative and Maternal-Child Health Services Provided at 43 a Sample of Rural Health Centers in Malaysia: 1973-1974 13. The Distribution of Government Health and Medical Institutions and 59,60 Expenditure in Peninsular Malaysia: By Health District 1973 14. The Density of Hospital and Health Center Expenditure Per Capita by 62,63 Health District: 1973 15. Distribution of Recurrent Hospital Inpatient Expenditure Across Income 65 Brackets of Rural and Urban Inpatient Households 16. Distribution of Capital Hospital Inpatient Expenditure Across Income 66 Brackets of Rural and Urban Inpatient Households in Selected Hospitals 1974 17. Distribution of Total State Recurrent Hospital Inpatient Expenditure Across 67 Per Capita Household Brackets for Eight States of W. Malaysia: 1973-1974 18. Measures of Technology in the Health Sector 70

ii Preface

This paper is of value for two basic reasons. It is a necessary input into the Beak's study of public spending in Malaysia. We cannot assess the distributive effects of government spending with- out defining the various public outputs (e.g., rural primary pupil year, specialty outpatient clinic visit) and measuring their associated unit costs. The paper provides the needed definitions and unit costs for publicly financed health care.

But the study is also of value in its contribution to knowledge of government cost functions. Traditional concern with government acti- vity has focused on inputs; e.g., has the money committed to this function been spent according to the legal stipulations of the legislature. To the present most government auditing has this perspective at root. However, there is increasing concorn with the efficiency of publicly provided ser- vices, both in terms of minimizing costs per output, and in maximizing satisfaction per program. program budgeting and cost benefit analysis reflect this concern. In this context, knowledge of public cost functions would be very useful in guiding decision-making more systematically toward the aims of the various social programs. Such material would be also useful in discussions concerning the desirable form and substance of govern- ment activity. Nevertheless, and in spit- of the robust theoretical and empirical literature on private cost functions, there has been little work on the public functions. Both governments and economists are largely in the dark concerning them.

The paper is therefo.re unusual in estimating public cost functions. In the process it pinpoints the shortcomings of government accounting for carrying out cost analysis.

A collection of such empirical material would permit development of a theor - of nomral government costs for various publicly financed activities. Thus the study is also potentially valuable, quite independently of its usefulness to Malaysian decision-makers or its necessary contribution to the Bank's work on public expenditures and distribution. iv

SuJ ary

Malaysia is among the more advanced of the developing countries, with a per capita income of approximately $700. Its infant mortality rate is relatively low (38.5 per thousand) and its patterni of morbidity more similar to developed than less developed countries. Malaysia's government spends approximately $7.50 (TU.S.) per capita on health,, or approximately 9 and 2 percent of its recurrent and capital budgets, respectively. Total health expenditure in the public and private sector is atpproximately 3.5 to 4 percent of GNP. The stock of medical and paramedical manpower is also well above the W.H.O. minimum guidelines. The ratio of population to physi- cians and nurses in W. Malaysia is 4100 and 1243, respectively.

The health and medical system may be characterized as a "tpyramid of referral institutions"t. At the pyramid' s base there is the network of primary outpatient and maternal-child health facilities, of the Rural Health System(main health centers, subhealth centers, midwife clinics) and the general outpatient clinics of the hospitals. The units of the Rural Health System provide general outpatient care, ante-natal and postnatal services, home nursing care, school health examinations, and basic dental services. Mobile clinics provide services to areas physically inaccessible from the health centers. Moving up the pyramid, a network of urban-based district hospitals provides inpatient services for all but the largest urban centers. These hospitals receive patients in need of nonspecialized hospital inpatient care from the main and subhealth 'tenters under their jurisdiction. At the top of the pyramid there is a general hospital in each of Malaysia's 11 states providing a wide range of primary and specialized inpatient and outpatient services partially in response to referrals from lower levels.

The principal responsibility of the Central Headquarters of the Health Ministry is in planning the investment budget and in the allocating funds and manpower among the states. However, it neither allocates finan- cially nor physically manages the allocation of these recurrent resources to the individual health uitNs. Consequently, the Ministry's budgeting system only provides a mechanism for ensuring that each state's aggregate level of health spending is within the limit of its initial allocation.

Although the State Medical Offices (SMO) have the principal respon- sibility for managing the medical activities within each State, an 5MO rarely takeq a direct decision on the size of each medical institution's budget. The budget negotiations between an SMO and a Hospital or Health Center focus on the magnitude of the different inputs to be provided to the institation and these are usually expressed in physical rather than value terms. From the perspective of the SMO, monitoring the level of an institution's budget is only of peripheral concern. Only t-he level of aggregate spending for all state v

institutions on different objects of expenditure is of critical concern primarily because of the pressure brought by the Central Ministry. From a managerial perspective, the proximity of the SMO to the state institutions allows sufficient contact so that a physical allocation process proves a viable, if not terribly efficient, way of managing the allocation of resources. However, it does imply that the annual budgeting exercise offers only meager clues for estimating of the unit cost of outputs such as inpatient days or clinic visits. Even to"al annual spending by an institution can be obtained from budgetary records only --ith considerable and tedious effort.

Within the hospital system, costs of the following outputs are estimated: (i) an outpatient clinic visit for primary care, (ii) an oUt- patient visit to a specialty medical clinic., (iii) a day of hospitalization, and (iv) inpatient treatment by specialty inpatient service. Where possible, the unit recurrent costs are further broken down by the cost of their princi- pal components: specifically, the cost of the clinic staff and of subsidiary clinical services (X-ray, laboratory., etc.), of drugs, X-ray film and labo- ratory materials. The capital cost estimate is inclusive of amortization and the foregone return to capital.

Several conclusions are of interest. Although there is only a negligible difference i: the cost of a general outpatient visit at the two types of hospitals, the unit recurrent cost of the outpatient and inpatient services provided by general hospitals is approximately 60 percent higher than in the district hospitals. The difference is due to the fact that the more expensive specialty outpatients account for a far larger proportion of care in the general hospitals.

Cost estimates of the Rural Health System are provided as follows: (i) an outpatient visit at a health center, (ii) an outpatient visit at a mobile dispensary clinic, (iii) an ante-natal clinic visit, (iv) a child- health clinic visit, (v) a visit to a maternal- child health clinic provided by a mobile team, (vi) a visit to a physician's outpatient clinic, (vii) a school health clinic check-up, and (viii) dental clinic treatment.

The results indicate the diversity of service of these rural health institutions. In general, maternal-child health activities absorb the largest share of a center's staff budget -- 22 to 31 percent in main health centers, 31 to S1 percent in sub-health centers General outpatient care absorbs 22 to 31 percent of the staff budget. Environmental activities absorb 10 to 20 percent, with the residual consumed by supervisory staff activities and school health programs. Hence curative services do not absorb the lion's share of the budget.

The cost of rural services is low, compared with the cost of outpatient care in the hospital system. The staff and drug cost per out- patient visit in a health center is only one-third that in the district hos- pitals. Inclusion of capital costs does not narrow the differential. The unit cost of the different maternal-child health services is also comparatively low. Comparing these results with a similar study in Tunisia shows the unit outpatient cost in a Tunisian dispensary as double that in Malaysia. This vi.

reflects Malaysia's substitution of paramedical workers for physicians at this level of care. Hospital care on the contrary is about twice as costly in Malaysia as in Tunisia. (Tihese comparisons are based on official ex- change rates..) The Rural Health Sa .tem also exhibits high variance in the cost of a given service across institutions. This is partially explained by the fixed overhead cost in staff associated with the establishmnent of a center and variable utilization rates. Finally, the inclusion of the user cost of capital virtually doubles the cost of providing services.

Several measures of technology are developed. These exclude: (i) the ratio of annual recurrent expenditure to the total capital expenditure required to operate a project; (ii) the capital-labor ratio, (iii) the rental value of capital, human and physical, per unskilled worker. By measure (i) a health center requires a greate>r level of recurrent expenditure per dollar of initial investment, than a hospital. Conversely, the capital intensity of the average hospital is more than twice that of a health center, by either measure (ii) or (iii). Issues in the Costing of Public Sector Outputs: The Health and Medical Services of Malaysia

I. INTRODUCTION *

Economic analyses of health systems of less developed countries have been relatively neglected until recent years. As a result, govern- ment health planners often must develop and appraise programs in ignor- ance of the relative cost of providing health and medical sercices, the socioeconomic characteristics of the consumers of these services and of the relative roles of the public and private sectors in their provision. This deficiency is particularly striking for Malaysia, where the health and medical care delivery system is more developed relative to many less developed countries. In this paper, we shall focus on one of these prob- lems--the estimation of the cost of health services in Malaysia. A sub- sequent paper will address the other two issues. Estimates of the cost of public sector outputs are of consider- able practical and theoretical value. They are critical to rational de- cisions on resource allocation in the health sector. Investment decisions in ignorance of their recurrent cost implications may lead to under- financed, inefficient and unproductive projects. The financial tradeoffs underlying alternative strategy options cannot be evaluated in the ab- sence of an estimate of the cost of each strategy. For example, proposals

* This study was financed by the World Bank as part of a larger project to evaluate the characteristics of public expenditure in Malaysia. The data for this study were collected over a seven-week period in Malay- sia. It required visits to the headquarters of the State Medical Depart- ments of Penang, Salengor, Kedah, Kelantan, Johore anid Pahang, and to many general and district hospitals and to main and sub-health centers througlbut Peninsular Malaysia. It was undertaken with the fullest co- operation of members of the Planning and Financial Departments of the Ministry of Health. I am grateful, in particular, to Dr. G. Singh, E. J. Martinez, Dr. K. Notaney and K. Singh and many other persons in the Malaysian Ministry of Health and to M. Shanmugalingham, R. Chandher, Paul Clark, and Jacob Meerman for their helpful cooperation. The author is extremely grateful to Linda Lim and Laurie Effron for their insightful research assistance.

1 -2- to plan family planning efforts in the framework of an integrated maternal- child health program may be intuitively sensible in terms of technological and motivational considerations. Financially, the cost of the health com- ponent may be so iaposing as to effectively limit the potential expansion of the family planning program to an inadequate level. Any evaluation of the efficiency of ongoing programs requires estimates of the costs of their delivery. Operational decisions concerning the expansion or contrac- tion of individual micro-level institutions must consider their cost- efficiency. Finally, unit cost estimates of public health services are surprisingly few iii the context of developing countries. The methodology anid estimates developed in this study will hopefully prove of value to health planners in other countries. The primary motivation for these estimates, however, was as an input to a larger study on the incidence of public expenditure in Malaysia. Specifically, the World Bank has undertaken a survey on the relative levels of consumption of particular health and medical services by members of dif- ferent income groups. One measure, albeit imperfect, of the value of a given service is the cost to the government for its provision.1 By apply- ing this measure of cost to each of the services consumed by a given in- dividual, an estimate of the total gross value of his public health serv- ice consumption may be obtained. In order to place Malaysia's medical and health system in context, section II will provide a short organizational description of its medical care delivery system, and a comparison of the level of its expenditure, health inputs and demographic characteristics with that of other LDCs. In section III we shall describe the cost-accounting and budgeting system of Malaysia's Ministry of Health as a background to our subsequent method- ological discussion on the costing of health services in section IV. In section II, we also evaluate the impact of the performance and program budget- ing system (PPBS). Section IV discusses the methodological issues that arise in costing the outputs of Malaysia's health institutions. Specifically, what does it cost the Malaysian government to provide a day of hospital

1 This is obviously a second-best measure in the presence of less than perfect elasticity of demand or of externalities. However, it does allow for an estimate of the distribution of government health and medi- cal expenditures by different income groups. -3- inpatient service at a district or general hospital? To examine an out- patient or provide ante-natel care service at a main health center? Unit recurrent and capital costs are estimated and in some cases disaggregated by their object components (staff, drugs, laboratory and x-ray tests, etc.). Parts A and B discuss the costing of the particular services provided at the general and district hospitals, and of the Rural Health System, re- spectively. In part C, we discuss the conceptual and empirical issues underlying the imputation of the cost of medical and paramedical training to the cost of providing health services. In section V, we shall briefly illustrate some of the applications to which cost estimates may be used. In part A, we have constructed a health expenditure map of Peninsular Malaysia, which illustrates the struc- ture and level of expenditure per capita on a district basis. In part B, we have estimated the income distributional incidence of the government's expenditure on hospital inpatient services. In part C, we have provided some crude measures of the technology of the health sector's production process.

II BACKGROUND CHARACTERISTICS ON MALAYSIA'S STATE OF DEVELOPMENT BY SOCIO-ECONOMIC AND HEALTH SECTOR INDICATORS

As a background for our subsequent discussion, this section will briefly describe the institutional structure of Malaysia's health and medical system, and compare its level of socio-economic development rela- tive to other countries, developed (MDCs) and less developed (LDCs). In table 1, we have presented summary statistics of these facets of Malaysia's development. With a per capita income of $700 (U.S.) in 1974, Malaysia is midway in the spectrum cf devqeloping countries in terms of its economic structure and income level. (Appendix A - table 1) Its population is primarily rural (84.1 per cent) arid 50 per cent of its labor force is engaged in agricultural production. The large rural environment explains the high fraction of the population without easy access to piped water as well as the rudimentary means of sewage disposal. Like many LDCs, it has a young age structure, with 55.5 per cent of the population less than age 19 and only 7.1 per cent above age 55. -4-

TABLE 1

SUMAPY STATISTICS 01 TIHE DENIOGRAPHY AND HEALTH SYSTEtl 0F WEST MALAYSIA A. Demographic Data 1957 1971 1. Population (1970): 3. Crude Birth Rate 46.2 32.6 Total: 10,452,309 Crude Death Rate 12.4 6.8 Urban: 2,527;988 Rural: 8,791,690 4. Infant Mortality Rate:(1971) 38.5 Neo-natal Mortality Rate: 22.5 2. Fraction of Population Toddler Mortality Rate: 4.0 n Age Brackets: Maternal Mortal-ty Rate: 1.24 Q-4 : 15.53% 5-95.8%5. : Expectation of Life at Birth: 10-14: 13.52% Male: 62.2 15-19: 11.18% Fml:6. Female: 66.5 20-54:205 37.37%t3 7 55- : 7.12% 6. Total Fertility Rate: 5.054

B. Morbidity Data Eleven Principal Causes of Death in Government Hospitals: Diseases of early infancy 36.8% Tuberculosis 9.3% Heart Disease 27.9% Neoplasms 13.1% Pneumonia 11.1% Gastroenteritis 5.5% Cardio-vascular disease 12.2% Deficiency Diseases 3.6% Accidents 14.6% Liver Diseases 3.7% Complications of Pregnancy 1.9%

C. Environmental Data (1970) Percentage of Population With: Percentage of Population Served By: Piped Water to Quarters 37.9% Flush Toilet 20.6% Piped Water Less than 100 Bucket 19.8% Yards from Home 10.9% Pit Latrine 32.5% Piped Water More than 100 Other 27.1% Yards from Home 2.9% Piped Water Other than 100 Yards from Home 48.3%

D. Medical and Paramedical Manpower Total 'Per 10,000 Population Doctors (1972) 2,089 2.25 Dentists (1972) 628 .68 Pharmacists (1972) 199 .21. Nursing Auxiliaries 2,767 2.98 Nurses 4,693 5.06 Table 1 (continued)

C. Health Service Availability: Rural Health System Per Thousand 1. Outpatient Service: Total clinic attendances in mobile and staticdispensaries (1972): Total Population Rural Health st -At rural static dispensaries and health centers 3,536,719 381.11 ysem At rural traveling dispensaries 1,086,357 116.90 Hospital System At hospital dispensaries 6,864,067 739.65

2. Maternal-Child Health Services: (1973) Number of Number of Number of Number of Attendances Home Visits Deliveries Centers At Maternal-Child Health Centers 925,759 152,949 5,102 37 At Main Health Centers 454,905 151,388 5,263 54 At Sub Health Centers 1,153,808 484,246 17,156 207 At Midwife Clinics 549,030 1,277,277 54,742 1168

3. Percentage of Births delivered in Government hospital (1971): 31.8% Percentage of Births delivered by Maternal-Child Health Service units: 24.6% Percentage of Births delivered in private hospitals, maternity homes, Estate and Mine hospitals 11.8% Residual: 31.8%

4. Dental Services (1971): Total Per Thousand Population Treatment given by Dental Officer (1973): 1,358,065 146.34 Treatment givTen by Dental Nurse (1973): 984,172 106.05

5. Hospital Inpatient Services: Total Per Thousand Population General and District.Hospital beds (1970): 17,063 1.93 Including Specialized Hospitals for Tuberculosis, Leprosy, Mental Diseases 27,284 3.09

Source: Vital Statistics, 1970 (W. Malaysia, Dept. of Statistics, 1970). Social Statistics Bulletin, 1969-1971, (W. Malaysia, Dept. of Statistics, 1970). Unpublished materials provided by Ministry of Health (W. Malaysia). -6-

This age structure largely explains the low level of its crude death rate, 6.8, particularly when it is also noted that the infant-mortality rate has sharply declined in the last thirty years to a rate of 38.5 per 1000 population. The latter places ialaysia at a very advanced level relative to many other LDCs. An alternative way of standardizing the death rate for age structure is to examine the expectation of life at birth. In Malaysia, this is 66 and 62 years, respectively, for females and males, which is comparatively high relative to other LDCs. Its crude birth rate of 32.6 and the fertility rate of 5.05 are high by the stand- ards of the developed world, but low relative to most LDCs (Appendix A, tables 2 and 3). The net growth rate of its population is 2.58 per cent per annum. Whether because of its health system or because of its level of development, the pattern of morbidity is more similar to developed than less developed countries. Of the eleven principal causes of death in government hospitals, heart disease, cardiovascular disease and neoplasms are second only to diseases of early infancy in their importance. Unlike most developing countries, communicable and gastrointestinal diseases ac- count for a low fraction of deaths. Since these measure only the principal causes of deaths in government hospitals, they are not fully indicative of the actual pattern of morbidity, but they are, nevertheless, consistent with the demographic measures. An examination of the level of expenditure and inputs devoted to the health sector indicate Malaysia to be typical of many developing coun- tries. From Appendix A, tables 4 through 6, the Malaysian government expended,approximately $7.50 (U.S.) per capita on health in 1970-71. This absorbed approximately 9 and 2 per cent of the recurrent and capital bud- gets, respectively. Total public sector health and medical expenditure was approximately 2,per cent of GNP. Although this is high level of re- an scurces relative to many of the poorer LDCs, it is certainly notAuncommon level of spending on a per capita basis. Private resources would supple- ment this by another 66 to 100 per cent, yielding 3.5 to 4 per cent of total GNP allocated, to the consumption of health service. The allocation of the public sector budget is weighted to preventive expenditure to a larger degree than many LDCs, but again not spectacularly so. -7-

Malaysia's stock of medical manpower places it well above the WHO minimum of one doctor per 10,000 and one nurse per 5000. With this ratio at 4,100 and a population-nursing personnel ratio of 1,243, it is midway in the spectrum between the LDCs and the MDCs. The middle position also holds for other categories of paramedical manpower (dentists, pharmacists, etc.) (Appendix A, Tables 1, 7, and 8). The public sector employs the bulk of paramedical person- nel (approximately 80 per cent) and 57 per cent of physicians. In adai- tion, one would want to include traditional practitioners--Chinese, Malays, and Indian--as a significant additional source of supply of medical serv- ices. The capacity of the Malaysian public sector medical system is also typical of many LDCs. If both public and private hospital beds are in- cluded, the population-bed ratio is approximately 415, with 74 per cent of these beds in the public sector (Appendix A, tables 9, 10). The public sector outpatient services provide approximately 1.24 outpatient consulta- tions per capita per annum; in addition, theare are an additional .33 and .25 consultations per capita per annum at maternal-child health (MCH) and dental clinics, respectively. Of these, 40 and 70 per cent of the out- patient and MCH attendances occur in rural institutions strictly defined. As with many LDCs, a substantial fraction of births occur outside of hos- pital MCH service institutions--approximately 32 per cent. In summary, although Malaysia is relatively advanced among LDCs in terms of indicators of socio-economic and health sector development, none of these indicators suggest that it is bordering on levels found in the developed world.

Description of the Institutional Structure of Malaysia's Medical and Health System Malaysia's health and medical system may be characterized as a pyramid of referral institutions. At the base of the pyramid is a net- work of'primary outpatient and maternal-child health care facilities. Institutionally, these correspond to the units of the Rural Health System (main health centers, sub-health centers, midwife clinics) and the general outpatient clinics of the hospital system. There are approximately 1,168 midwife clinics, and 275 main and sub-health ceniters. At the middle tier of the pyramid, the 46 district hospitals provide primary (nonspecialized) -8- inpatient and outpatient care to their district's population and super- vise the activities of the rural health units under their jurisdiction. Many of their inpatients are referred for hospitalization from rural out- patient clinics. Vinally, there is a general hospital at the top of the referral pyramid in each state. The eleven general hospitals are large institu- tions and provide a wide range of primary and specialized inpatient and outpatient services. Diagram 1 illustrates the intended interaction of the institutions at different levels of the pyramid. In general the three levels of the pyramid correspond by 1ocatiou, if not by use, to the institutions of the rural, small urban and metropolitan regions of peninsular Malaysia. The services of a general hospital may be delineated as between (i) general (or primary) outpatient care (GOP), (ii) specialty outpatient care (SOP), and (iii) inpatient care (IP). The general outpatient depart- ment of a general hospital provides primary diagnostic and treatment care to the mass of the urban population. Any individual with a medical prob- lem may obtain an initi,.al diagnosis and ptescribed treatment in this department. A comparable type of GOP care is provided in the smaller urban centers by district hospitals and urban static dispensaries, and by the main and sub-health centers in the rural areas. Specialty outpatient services are usually provided only if the patient is referred from the GCP department, or from other hospit-als or health centers within the state. Also, the SOP department provides follow-up care for patients that had been previously hospitalized. In practice, there may be from 7 to 2Q different specialty clinics in a general hospital, encompassing surgery, dermatology, opthalmology, ob- stretics-gynecology, pediatrics, and internal medicine, etc. In a few hospitals, more complex specialties, such as neurosurgery or cardiology are provided and these services receive patients from throughout the country. Finally, a general hospital provides a wide range of in.patient services. A service of general medicine largely serves the basic

1To the extent that the hospitals in any state serve as referral institutions, their patients may be from rural or urban areas distant from the particular hospital unit. -9.- Diagram 1

RUGhnw HopaL

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A Specil mw4 .o and Public Health Programnnm

DIAGRAM SHOWING RELATIONSHIPS AMONG GENERAL AND DISTRICT HOSPITALS AND RURAL HEALTH UNITS IN A CO-ORDINATED MEDICAL AND HEL SERVICE

Diagram 2 RURAL HEALTH SERVICES SCHEME

KMWidie Midwvife) Midwife Midwifc.

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2 2,000 . id 102000

IO,OgO~1000 popopulation oplaio

HEALTI- UNIT FOR 50,000 POIPULATION Source: LfW Jayesuria,n A Review of the Rural Health Servces in W. Nalaysia * (LJinistry of Health, Kuala Lumpur, 1967), pp. 17., 21. -10- inpatient needs of the urban population in the vicinity of the hospital. Specialty inpatient services, staffed by medical specialists, are referral services for the entire state population. In situations where a district hospital or a health center cannot provide adequate medical care, patients are usually referred to the general hospital for hospitalization. In general, there is only one general hospital per state, but their size varies according to the state's population size. The largest is the Kuala Lumpur General Hospital (2,100 beds) which ser-ves as a na- tional referral hospital for many of the extremely complex medical spe- cialties. Other general hospitals vary in inpatient capacity from 306 beds in Kwantan to 1,345 beds in Negri Sembilan (see table 13). Peninsular Malaysia has been divided by the Ministry of Health into health districts, which in general, are coterminous with the Central government's administrative districts. The population of a district may vary from 20,000 to 250,000 (see table 13). In most districts, there is either a district or general hospital. A district hospital is a smaller, urban-based hospital which in principle serves a health district population of 50,000 to 100,000 people. Although it is usually between 75 and 200 beds, in some cases it may be considerably larger (up to 560 beds). In several cases, a district hos- pital will serve more than one district, or a district with a population as large as 250,000. It is a lower-level referral unit, receiving patients in need of hospitalization or specialized outpatient care, from main and sub-health centers. It primarily provides inpatient and outpatient serv- ices for general medical probleTms, and will have, at most, one or two specialty services, usually in minor surgery and obstetrics. Consequently, complex medical cases will be referred to the general hospital. There is considerable interaction between a district hospital and the rural health units within its jurisdiction. Finally, the Rural Health System provides a significant share of the go-'ernment's services in the medical and health sector. Nationally, 60 per cent of all primary (as opposed to specialized) outpatient attendances at government clinics occur at main and sub-health centers, and in some rural dis- tricts, the share is closer to 100 per cent. The share of maternal-child health services provided at these centers and midwife clinics is equally high. In terms of expenditure, the rural units absorb 30 per cent of the government's total health expenditure (see table 2). The Rural Health System consists of a network of preventive and curative health institutions, principally midwife clinics, main health centers (11HC) and sub-health centers (SHC). The MHCs and SHCs are multi- output institutions, providing general outpatient care, ante-natal and post-natal services, home nursing care, school health examinations and basic dental services to their client population. Mobile clinics for outpatient and maternal-child health care are regularly provided to those areas in a district physically inaccessible to the center. At every center, there is a small environmental health staff to promote and supervise community construction of wells and latrines. The midwife clinic-cum-quarters (MCQ) is staffed by a trained assistant midwife (b-dan) and provides a limited range of ante-natal and post-natal services. Aside from one ante-natal clinic per week, the bidan visits mothers tu assist either with post-natal care or with the actual delivery. All MCQs are under the regular supervision of the personnel of a SHC or MHC. In any health district or sub-district, the principal units of medical care are the main health centers (MHC), each of which supervises the health services provided to a rural client population of 50,000. This is illustrated in diagram 2. The role of the NHC is supervisory in the sense that the physician, nursing sister and public health in- spector at the center are responsible for managing the curative, maternal- child health and environmental activities of all the other health units within the area of its jurisdiction. In principle, there are four sub-health centers associated with each main health center. Each SHC services a client population of 10,000. Aside from the presence of supervisory personnel) the MHC and the SHC have the same core staff of hospital assif ants, assistant nurses, mid- wives- and public healt'. inspectors as the MHC, and provide the same set of medical and health services. Occasionally, the MHC will have a small number of beds, primarily for emergencies. Finally, each SHC or MHC will supervise approximately five midwife clinics, each theoretically servicing

1 For example, the midwife is expected to visit a new mother daily until the umbilical cord drops and every tenth day thereafter. a population of 2,000. The actual network of facilities departs from these norms in hospital, several respects. In the urban areas of a district, a district urban static dispensary and maternal-child health center may provide the these services to the urban population. In many rural districts, Often a client population per MCH or SHC is double the norm of 10,000. only one or health district has a small population, and there will be of two health centers. Table 13 illustrates the structure and density hospital and health center capacity on a district basis.

III THE BUDGETING AND ACCOUNTING PROCESS IN MALAYSIA'S MINISTRY OF HEALTH

In this section, we shall describe the budgeting and accounting the system used within the Ministry of Health. This will demonstrate of Lhe problems inherent irn any estimation of the cost of the outputs a brief various medical and health institutions. It will also serve as case study of the b1udgeting process. The last two decades have seen tremendous growth in Malaysia's cen- health and medical system. An infrastructure of hospitals, health ters, and midwife clinics has been rapidly put in plac-, and gradually complemented by a growing staff bf paramedical and medical manpower. As scale, a consequence, the simple accounting methods designed for a smaller The account- less complex netwc- f facilities are proving inadequate. accounta- ing system of the colonial era emphasized financial control and or bility, and was not designed as an instrument for managerial control methods economic planning. However, the perseverance of these antiquated the is not surprising, particularly given tho rapidity of change and scarcity of trained administrative and accounting personnel. With the infrastructure and staffing largely in place, inefficiency resources in resource allocation rather than extreme scarcity of financial other Mini- increasingly appears as the key problem within the Health and slow and stries. The inevitable changes in accounting procedure will be Per- difficult as the Health Ministry's recent experience with a Program formance Budgeting System (P.P.B.S.) amply illustrates. -13-

Unlike many former British colonies, Malaysia's system of health administration is highly decentralized. The country is administratively divided into "responsibility centers" or self-accounting units, the most important of which are the individual states.' The Central Ministry is an umbrella agency, which has overall direction over the recurrent and development activities of the health and medical sector. It sets the priorities and manages the negotiations with the Planning Ministry over projects proposed for inclusion in the capital budget. Its negotiations with the Treasury determine the size of the Ministry's annual recurrent budget. The Central Ministry's influence on the pattern of expenditure within the states is indirect but nevertheless significant. Its overall strategy concerning the distribution of hospitals and health centers throuahout the country, as reflected in its capital spending priorities, has largely determined the character of the set of institutions under any state's jurisdiction. By setting physical manpower norms for different types of institutions (i.e. the number of nurses, hospital assistants and midwives per main health center, hospital or inpatient ward), the amount of salary expenditure in a given institution is clearly influenced. By deciding whether to add a new medical specialty ward to a hospital, a greater need for recurrent resources in that hospital could naturally be expected. However, the Central Ministry does not manage, financially or physically, the allocation of recurrent resources to the various medical and health institutions within any state, except at the most aggregative level. Strictly, its principal power is in the allocation of financial and manpower resources as between states as units, and thus it determines the priorities attached to different regions. At the beginning of the fiscal year, the Central Ministry (CM) indicates the approximate level of each state's budget, disaggregated on an object basis. Specifically, the budget is broken down by votes for salaries, transportation, drugs, foodstuffs, etc. It is an approximate level, in that the CM itself may not be certain of its precise budget

1 Responsibility centers include (i) each of the states, (ii) the Central Administrative Offices of the Ministry of Health, (iii) Kuala Lumpur General Hospital and (iv) several hospitals specialized in the treatment of particular disease problems, such as the Leprosarium, the psychiatric h spitals and the tuberculosis hospitals. -14-

allocation trom the Treasury for the new fiscal year. Each State Medical -Office (SMO) has the principal responsibility Given for managing thie health and medical activities within the state. equip- its available budget, the SMO aliocates manpower, drugs, vehicles, under its ment and financial resources to the set of medical institutions and the jurisdictioii. This includes the general and district hospitals funds district health oflices, Each disttict health office distribuites its dis- to the main adA sub-heaith centers and midwife clitics within ttict. in Two points may be rioted. FItstj resources a-'e not allocated institution. The total an- d comprehensive way to any specific medical variable. nual budget for a hospital or health center is not a policy institution On the conttary, the budget negotiatibns between a medical expenditure and the SMO fotts on the allocation of specific objects of estab- (the niinber of vehicles or stethoscopes, the size of the manpower Although iislment, etc.) and often in physital rather than value terms. or sub- there may be an Implitit consideration of the coinplementakities not §titutabilities involved between objects of expenditure, this is Second, the SMO formally included in the resource allocation process. state, in is sufficiently close to the particular institutions in the alloca- terms of distance and frequency of contact, so that a physical of managing tion process is a viable, if not terribly efficient, means the allocation of resources. These points may be illustrated by describing the annual budget- year, ing process for a typical state. At the beginning of the fiscal to submit to the each hospital and district health office is required of expenditure SMO an estimate of its past spending levels on all objects In most and of its financial requirements for the coming fiscal year. incom- cases, the submitted budget estimates by the medical units are has plete. Most hospitals have no idea what their total expenditure monitored been and assume that the progress of their past spending is district by the state. Usually, the administrator of a hospital or or dis- health office will briefly analyze the capacity of the hospital pinpoint trict health institutions to meet their current patient load, spe- where this capacity is deficient and suggest policies to alleviate state in cific operational problems. These estimates are used by the -15- preparing its overall submission to the Treasury. Once the Central Ministry determines the state's overall financial constraint, the SMO establishes the budget, in terms of particular objects of expenditure, for each hospital or district health office. This may involve general guidelines for an institution to follow, such as to spend $X per inpatient on diet, or to maintain the personnel establishment at the previous year's level. The SMO may authorize a higher level of utili- zation of specific objects of expenditures. For example, it may allow the purchase of additional equipment or provide the institution with a larger supply of drugs. Although the state's basic constraint is financial, most of its allocative decisions are either on a formula basis or in physical terms. In other words, rather than simply allocate a lump sum of finan- cial resources, the state provides the institutions with highly specific guidelines on how they can proceed. The budgeting system may be described as an incremental "zero base" budgeting system, with the base unknown to both the state and the recipient, and the increment stated in physical terms. Although the state's basic constraint is financial, the precise amount allocated to each institution is not of primary concern. This implies that the annual budget exercise offers only meager clues for any estimation of the unit cost of medical or health outputs. Even informa- tion as basic as the annual total expenditure of an institution cannot be obtained from the annual budget exercise. This is a fortiori the case for institutions of the Rural Health System. For budgetary purposes all main and sub-health centers and midwife clinics of a district fall under the aegis of the district health office. The latter submits only a single budget estimate for all of these units. Ironically, a financial valuation is ultimately placed on the physical resources allocated to the health and medical institutions, but this valuation usua-lly does not allow for a retrospective calculation of the expenditure of a hospital or health center. The central focus of the accounting system is the level of spending by object of expenditure.1

1Although the introduction of PPBS has brcadened this somewhat, the modifications do not change the fundamental focus of the system, as will be described later in this section. -16-

The accounting process proceeds quite simply. When the state's financial officer receives a bill for payment from a hospital or district health office, he will enter it into a financial. ledger under a specific object account. For example, when the State Pharmaceutical Chemist buys drugs or surgical instruments for distribution to the individual institutions, the corresponding financial disbursement is entered in a ledger under "drugs and supplies." Payments of salary are entered under the "Personal Emoluments" object account. What is critical to note is that the ledgers merge together all expenditure, on a particular object, by all the insti- tutions within the state. In many states, the individual financial ledger entries will not contain any notation indicating the hospital for which the payment was issued. This effectively precludes any subsequent deter- mination of how funds were allocated as between institutions. This is particularly the case for rural health units. Since thei,r funds are dis- bursed through the district health offices, it is almost impossible for the state to trace back any expenditure to particular units. 1 The rationale for not distinguishing expenditure by institution is exasperatingly obvious. The state's principal financial concern is only to ensure that its aggregate spending, by object, throughout the year is within the limit of its allocation from the Central Ministry. Thus, only the aggregate total of expenditure at-any point of time is needed for managerial purposes. There is little need, either for man- agement or due to pressure from the Central Ministry, to accurately moni- tor the financial condition of any institution's operations, beyond the routine verification of individual bills. The physical control over the allocation of inputs to an instituticn (e.g. drugs allocated from Central Pharmaceutical Stores, determination of t(he staffing patterns, maintenance of hospital vehicles) ensures that it cannot grossly deviate from the expected level of expenditure. Given the shortage and limited ability of the state's administrative staff, there is no justification seen to

In some cases, some information is available. The State Pharmaceutical Chemist may have a crude idea of the amount of drugs allocated to a main or sub-health center. -17-

diverting it to accounting activities with low marginal payoff.' Another, more serious obstacle to accounting cost estimates, con- cerns the indirect way in which certain types of commodities and services are supplied to institutions. In the cases of drugs, foodstuffs, fuel and vehicle and plant maintenance, subcontractors hired by the state provide these commodities and services to several health center and hospital institu- tions. In each of these cases, the state's financial records indicate only the total value of services performed by the subcontractor. It may be effec- tively impossible to value the services allocated to specific institutions. 2 Heretofore we have focussed on the difficulty of using current financial records or budget estimates for obtaining an estimate of the total expenditure of a given medical or health institution. A fortiori, any delineation of the expenditure on different activities within the institution from these records is even more dubious. Finally, this discussion should suggest some of the problems that have plagued the introduction of a Program and Performance Budgeting Sys- tem (PPBS) into the Ministry of Health. The object of a PPBS has been to transform the budgeting and accounting process to focus on the cost of specific programs. These activities include inpatient or outpatient care (broken down by medical specialty or associated hospital services, i.e. surgery, gynecology, radiology, laboratory analysis), maternal child health services, communicable disease control programs, health education, dental health services, environmental health activities, training programs, re- search and specific disease control programs (i.e. against yaws, filari- asis, tuberculosis, leprosy and malaria).

1It is also frustratingly clear that it would require only mini- mal changes in the current accounting procedure to generate financial estimates on an institutional level for a large percentage of any insti- tution's budget. Even separate ledgers for each health and medical unit would be an obvious and fairly simple modification with enormous benefit. However, this chinj,re would only be of value in estimating total hospital expenditures.

2 In several states, the State Pharmaceutical Chemist maintains a record only of the physical quantity of each type of drug or equipment issued to a given hospital. Valuation in financial terms would be an extremely time consuming process. -18-

The PPB system has led to a quantification of the expenditure on each of these programs, disaggregated both on a responsibility center basis and on an object basis. Ultimately, it is hoped to lead to a fur- ther breakdown on an institutional basis, but from our earlier analysis, this appears several years in the future. To illustrate the format of the PPB system 's functional breakdown, table 2 is a breakdown of expendi- ture by program activity and by state for 1973.

Our earlier critical comments should provoke justifiable skepti- cism concerning the accuracy or conceptual meaningfulness of these PPBS generated functional breakdowns. The major operational change in the accounting system provoked by PPBS is that separate ledgers are now main- taine4 for the principal functional headings, i.e. Patient Care Services, Public Health Services, etc. Each functional activity ledger is theii further broken down by object of expenditure, as discussed previously. States vary to a considerable degree in how finely their accounting sys- tem may be disaggregated-according to each of the 3--digit functional headings. Thus, many states simply do not provide the highly disaggre- gated data. Even where such a disaggregation is made, its reliability is limited by the time and discretion of those making the initial delinea- tion. For example, the major activity, Patient Care Services, is essen- tially limited to only those activities that occur,within the system of district, general and spacialty hospitals. Similarly, Public Health Services primarily include activities occurring within the Rural Health System of health centers and midwife clinics. In other words, bills from hospitals are entered in the ledgers of the former; bills from health centers are en- tered under the latter, so that the distinction in reality proves prim- arily on an aggregate institutional basis rather than a functional one.

1Although annual expenditure totals existed for most of the major 2-digit functional headings by the state, the computer printouts of some of the more detailed 3-digit subheadings were avilable only for the first half of 1973. For most states, we could estimate subheadings 2.11 through 2.16 by assuming that the semi-annual shares of each in total Public Health Service expenditure could be applied to the annual level of the latter. TABLE 2 A FUNCTIONAL BREAKDOWN OF TOTAL RECURRENT CENTRAL GOVERNMENT HEALTHi EXPENDITURE IN PENINSULAR MALAYSIA: BY STATE, 1973 in 1000). P.P.B.S. a FunctionalX State Responsi- Halaria and Yaws Central Expenditure Categories \bility Centers Perak N. Sembilan Trensganu Kelantan Kedah Johore Melaka Pahang Selangor Penang Perlis Eradication Prolects Ministry TOTAL 1.00 General Administration 419 308 182 345 358 367 305 441 614 237 90 4900 8570 2.00 Public Health Services -/ 8084 3606 2721 3984 4729 6718 2570 5009 7887 3710 1186 3838 403 54252 2.11 Maternal Child Health * * 868 1160 1413 2030 785 1502 1717 * 32S 2.12 Environmental Realth * * 245 272 456 598 176 313 497 * 63 2.13 Communicable Diseases * * 12 19 233 *53 2.14 Basic Medical Diagnosis * * 272 353 512 510 277 578 586 * 109 anidTreatment 2.15 11ealth Education * * 1 13 71 46 * 5 2.16 Physical Services * * 321 454 583 1126 214 563 578 * 154 Subtotal 2.11-2.16 3899 2030 1711 2247 2990 4355 1465 2980 3661 1773 712 344 28171 2.20 Dental lIeaith 1547 831 425 718 417 1326 522 580 1504' 707 232 4 8819 2.30 Disease Control 2637 744 584 1018 1321 1036 383 1448 2721 1229 241 3838 55 17261 Anti-malarial Services 2539 738 564 999 1276 1004 337f Y4i 1756 l186 233 3751 15854 Malaria Eradication 1170 125 460 817 937 86 457 492 463 146 3751 8909 Anti-malaria Control 1369 613 104 181 338 1004 284 975 1264 722 86 6944 Tuberculosis Control 11 1 4 1 L 4 908 13 55 1000 Leprosy Control 6 19 15 16 8 8 14 41 5 8 169 Yaws Control 29.9 87 87 Filararlasis Control 57 28 22 2 17 24 149 3.00 Patient Care Services 22002 9082 3827 5155 6881 16996 5733 7173 28897 10806 1856 1641 119955 3.10 General Medical Services 15683 9082 3627 4830 6479 13029 5427 6774 23086 10073 1817 994 10090l ([P & OP in Hospitals) 3.20 Dental Care 170 198 55 385 80 129 392 153 356 45 1953 3.30 Special Care 6149 270 15 3785 177 7 5675 377 40 602 17100 Psychiatric 6109 112 3S27 -- 237 988b Tuberculosis 40 113 15 156 177 7 3256 77 40 602 4485 Leprosy 44 201 2421 62 2728 4.00 Support Services 510 783 36 175 448 1566 339 272 7174 1850 134 30 65 13386 4.10 Training 510 783 36 175 448 15% 339 272 2469 1850 134 30 65 8e80 4.20 Research 3159 3159 4.30 Stores 1546 1546 TOTAL 31015 13781 6767 9661 12416 25;47 8947 12896 44572 16603 3267 3868 7011 196163 * Not available. a/ Program Performance Budgeting System Source: Unpublished Statistics, Ministry of Health, Government of Malaysia.

-/Includes Rural Health System. -20-

The problem is further complicated as one seeks ftjer functional disaggregatiop. For example, the bulk of Patient £are Services falls uinder General MIedical Services, w4ich is further subdivided into (i) Gen- eral Medicine, (ii) General Surgery, (iii) Pediatrics, (iv) Obstetrics- Gynecology, (v) Other Specialty Services (4ermatology, cardiology, opphal- mology, etc.), (vi) Pharmaceutical Services, (vii) Radiology, (vii) Lab- oratory Services, and (ix) Physical Servces. Conceptutlly, it would be more relevant to allocate activities (vi) through (ix) as betweep the dif- ferent medical specialties. Radiological expminations or laboratory tests ate not maoe for themselves, but in connection with diagnosis and treat- ment in a medical service. Since at least a third of any hospital's bud- get falls within these categories, this is not an unimportant allocation. in- Moreover, since eac-h specialty service is actually the coim,ppsite of patient and outpatient activities, one canmot easily relate these expendi- ture totals to a single optput measure for the purpqse of esti ating the unip cost of an activity. These delipeatiQps cannot be made within the present syst,e for the obvious reason that the accounting systep, has not begun to be struct,ured to make this type of distinction. Even within the present delineation of activities, what criteria are used tp allocate salaries or supplies qmpng them? If a nurse divides her time betTween several services, there is almost certainly no comparable allocation of her salary as between the budget categories. Similarly, activity (ix) appears to be a `catqii-all" category which includes a large fTaction of the budget nlot easily allocated between activities (i.e. laundry, diet, maintenanpp, electricity, etc.). The point pf this criticism is not that the PPB system ip of np budget- value. On the contrary, it is a remarkably inpovative attempt at ing, relative to most LDCs and many MDs. It provides a valuable kench- mark pf how state resourpes are allocated as between broad functional health and medical activities. It provides Malaysia!s ,central plapners with a rough measure of the relative level of expenditures on preventive and curative care and as between rural and urban areas. However, one must be aware of the limits to its possible applications. It does not allow for any costing of unit health or medical services since there is no easy linking of cxpenditures to outputs. -21-

IV THE COST OF MEDICAL AND HEALTH SERVICES IN PENINSULAR MALAYSIA: 4ETHODOLOGY AND RESULTS

The three central pillars of Malaysia's health and medical care system are (i) the general hospitals, (ii) the district hospitals, and (iii) institutions of the Rural Health System. In this section, we shall discuss the methodology used to estimate the unit capital and recurrent costs of the individual services provided by each of these institutions. This methodology was applied for at least one of each type of institu- tion in six states: Paha,ng, Selangor, Penang, Kelantan, Johore and Kedah. This sample should provide a representative picture of the cost of health services in states at different levels of development, as is illustrated by the summary statistics of table 3. We shall also provide an estimate of the average cost of these services for the country as a whole.

A. The Cost of Medical Services in the General and District Hospital System

In this part, we shall describe the methodology applied to esti- mate the unit recurrent and capital cost of the services provided in the hospital system. These include (1) a visit to an outpatient clinic in general medicine; (2) an outpatient visit to a medical specialty clinic;

(3) a day of hospitalization (an "inipatient day"), and - (4) total inpatient treatment in a specialty inpatient service. Where possible, the unit recurrent costs are further broken down by the cost of their principal components; specifically, the staff cost of the clinic and of the subsidiary clinical services (X-ray, laboratory, pharmacy), the cost of drugs, X-ray film and laboratory materials, and the cost of ambulance services. Capital costs incluide both amortization and the foregone return to capital. We did not impute the cost of train- ing medical and paramedical personnel, for reasons outlined in part C. Outlining our methodological approach, total recurrent (R) ex- penditure, TR , in a hospital j, may be decomposed into expenditure on i R administration A., inpatient care in service i, I.., and outpatient care i ij in service i, 0~.., viz., TAB 3

SUMMARY SCCIO-ECONOMIC STATISTICS ON THE S7A1 ENCOhPASSED BY K SA E OF HOSPITAL&S AN RURAL RHET:T T IUINS: 1971

Pulau Negri PinaT g Selangor Kedah IKelantan ahang. Johore Trgannu Semhi-lam -

Population Stze: 775,440 1,630,70T 954,749 686,266 504,900 1,276,969 405,539 481,491 Z Rural a, b 40.87 43-11% 77.3Z 75.9% 65.2% &7.57 61.0Z 66.6Z Small urba/ 8.2Z 11.4% 1CJ.1% 9.07 15-8% 16.2% 12.0% 11.8Z Z Large urbari 51.0% 45.5Z 12.6Z 1517. 19.072 26.3% 27.0% 21.6Z Infant Maiortality Rate4-' 38.0 29.4 42.3 47.&8 43.3 3&.72 56-3 39.67 Maternal Mortality Rate-- .72 .76 2.48 42.34 1.8 1.18 2.61 .l91 Income Per Capita (M$) 938.7 1520.2 n.a. 42zf.3 855.4 834,8 535.7 907.2 Percentage of Production in 1970 Agriculture, Forestry & Fishing 17.8- 14.0Z 57.57.-! 42.67 41.8%. 40-1% 38.17 37.1Z Manufacturing 14.1% 23.9Z 6,8Z 6.0% 8.47 15. 5.4% 17.2 Miring and Q1uarrying 0.Z 5.6Z .6 - O.0Z 11.5% 2.3Z 14.4% 0.5Z Literacy Rate (in any language> 59.7% 67.1% 57.4Z 45.07 61.27 63.1% 48.7% 67.7Z Physicians Per lr,000 Population 2.6 4.6 0.8 0.7 1.4 1.5 0.6 2.0 Midwives Per 10,00G Population .67 .58 n.a. .83 2.4 1.7 1.27 1.5 Health Centers Per 10,000 Popu- 09 .17 n.a. .29 .49 .25 .34 .33 lation

Hospital Beds Per 10,000 Popu- 18.8 17.5 12.1c 11.4 24.7 18.1 13.9 37.6 lation (in public gector) Percentage of Households with: Piped Water 69.2% 70.2% 31.7% 13.47 40.3% 5&.9% 11.67 59.37 Electricity 74.9% 61.27 22.3Z 18.5% 33.3% 44.97 19.9% 46.87 Flush buckets or pit latrine 88.0% 94.7% 70.4% 39.2% 83.3% 91.7% 33.8% 90.5Z sewage system

a/ Towns of less than 1000 persons. - Towns of size 1000 to 10/000 perso j Towns of more than 10.00 persons. - Per 1000 births. - Kedah and Pefi,s

Source: Social Statistics Bulletin 1969-1971, (Department of Statiscics, Malalsia) Vital Statistics, W. Malaysia 1970 (Department of Statistics, Malaysia) *npub1ished data, (Economic Planning Agency, Malaysia) Corw-initv Groups, 1970 Population Census (DeDartmenc of Statistics, Malaysia) -23-

R = R (1)

By estimating the value of O~. for any i, we may relate this to the total 1j number of outpatients in service i for a given period, thus yielding the average cost of an outpatient, visit in i ((1) and (2) above). If we can obtain an estimate of T', we can then obtain (IR. + AR). Assuming that J i jJ J AR is not very significant, we may then relate this latter measure to data J on the number of inpatients and the average duration of stay by service, to obtain measures (3) and (4) above.

Total Hospital Expenditure: 1973 As we outlined earlier, estimates of total expenditure per hospital, TR, exist in cnly unusual instances. 1 However, per hospital estimates can--be made of the total level of spending for many specific objects of expenditure. For example, the expenditure on personal emoluments, transport and travelling, linen and stationary, can be estimated by culling from each state's financial ledgers the individual payments for each object-that relate to a specific hospital. Similarly, in some cases, the statels pharmaceutical chemist (SPC) can provide a crude measure of the total value of drugs and medical supplies allocated to a hospital during a given period. The hospital d±etician can usually estimate the value of food- stuffs purchased by the hospital itself. Since data exist for any given state on the percentage of total state hospital expenditures in that state attribut- able to each object, we have an exogenous measure of the quantitative signifi- cance of those objects for which estimates are impossible. From such data, we inferred that spending on the estimable items of expenditure accounts for close to 90 per cent of total state hospital expenditure. Assuming this is a rea- sonable approximation for both the general and district hospitals, our total estimates of hospital expenditure are probably not seriously under- estimated. In gener&l, our firmest expenditure estimates were for the

1Only in special cases can such estimates be readily procured, and usually only when the hospital is a separate accounting unit or "Re- sponsibility Center" in the Ministry's accounting system (i.e, Kuala Lumpur General Hospital, the tuberculosis hospitals, etc.). 2In Kedah, the SPC did not calculate drug allocations in value terms. In Johore, estimates existed ojily for half of 1973; in Pahang, his estimates for Kwantan General Hospital also included drugs used in health centers in the Kwantan area. -24- hospitals in Selaiagor, Penang and Kelantan; in Pahang and Johore, much rouglher costs estimates had to be accepted.

Outpatient Expenditure sums Out estlimate of total outpatient related expenditures, fOR,, expenditure on the following iinputs: (i) outpatient clinic personnel, the (ii) personnel engaged in outpatient-related activities in pharmacy, film, laboratory and x-ray departments, (iii) pharmaceuticals, (iv) x-ray of (v) laboratory materials. The methodology underlying the estimate These each component also allows an estimate of the cost per outpatient. cost estimates are presented in table 4.

Clinic Staff: An estimate of the unit recurrent staff cost of outpatient services was obtained from data on clinic staffing patterns. In each outpatient clinic of a hospital, we questioned the chief nurse or physician about the (1) weekly frequency of the clinic and its average either duration, (2) the number and types of staff working in the clinic, at- on a permanent or part-time basis, and (3) the volume of outpatient re- tendance during an average clinic session. The responses obviously was lated to the clinic's operation in mid-1974. However, measure (3) consistent with data of the Medical Records Office on total out- a patient attendance, in each clinic, in 1973 (table 5). Assume an aver- representative annual salary level for each type of manpower and inputed age numbcer of hours worked on a daily and annual basis. From the share of each person's time allocated to the clinic, we may calculate the total staff cost of a clinic, on both a daily and annual basis, and R R of 0 ij and SOij. The unit staff cost these ate used in our calculation ij per outpatient, for each specialty clinic, is the quotient of this annual 1974 expenditure estimate, O°i , and the 1973 outpatient attendance level attendance, at each clinic. Assuming a trend of rising expenditure and outpatient this implies we overestimated this component of unit cost. This is in an unavoidable bias, since there would have been greater inaccuracy trying to obtain precise in:Formation on staffing patterns 6 to 12 montlhs earlier. Estimates of the recurrent clinic staff cost per outpatient in diffeTent specialty clinics are shown in table 6. make Other Objects of Recurrent Expenditure: Outpatient clinics TABLE 4 OF PENINSULAR MALAYSIA (in Malaysian Dollars) OF OUTPATIENT AND INPATIENT CARE IN SELECTED HOSPITALS ESTIMATES OF THE UNIT RECURRENT AND CAPITAL COST PAHANG SELANGOR I JOHORE PENANG KELANTAN 848,690 771,479 17,821,000 649,455 917,2591 ,063,970 ¢ 283,653 4,399,095 406,178 2,465,000 Expenditure 6,549,321 1,055. 23.14% 26.2% 16.67% 25.30% Total Hospital 16.34% 31.28% 16.08% 16.83% 16.8% for Outpatients 25.56% 23.26%X 35.33% 81 260 1067 244 Share of Total Expenditure 789 75 368 200 2016 903 206 41 .ohore Beds Kuala Kuala Tanjong Bukit Balik Kota Jsharu Segamat Kwantan Mentakab Lumpur Krang Kajang Penang Mertajam Pulau Bharu Krai D.H. G.H. D.H. G.H. D.H. D.H. G.H. G.H. D.H. D.H. G.H. D.H. Costs 4.48 3.30 3.75 3.27 Outpatient 3.57 3.00 2.98 1.97 5.69 Outpatient 3.25 1.69 1.50 4.64 Total Recurrent Cost Per 3.97 6.13 7.17 Per Specialty OP 3.72 3.27 Total Recurrent Cost 2.16 1.97 3.52 4.48 3.30 2.77-2;87 2.81 1.69 1.50 3.15 3.00 Total Recurrent Cost per General Medicine OP (GOPD) Component Costs 1.53 3.69 3.38 1.80 2.54 2.42 1.22 1.19 2.30 2.29 Cost: Total-/ 1.98 2.58 Staff 2.15 4.75 4.22 OP Clinic Staff 2.10 1.13-1.23 Specialty 1.47 .77 1.65-1.98 Medicine OP Clinic Staff 1.34 .13 General .11 .19 .21 lia/ .26 Outpatient X-ray Staff .14 03 .08 .23 Outpatient Laboratory Staff .18 a .22 .18 . .13 Outpatient Dispensary Staff .31 .93 1.40 .68-.74 / .39 .25 .54 .71 Drug Cost per OP . 2.40 1.14 1.13J- OP 1.1 1.10 per Spec. 10-a/a 1.00 a 1.17 per GOPD - 1.0a .07 .06 .03-/ .03-8 .03a/ .03/ .03-/ .03- 0 7 X-Ray Film .03- . -/ b b bb .07-/ .0 7 b/ 0 7 Running Cost: per Spec. OP 07b/ .02 .02-/ .02-/ 02-1 .02 Lab ..02-/ .02' .02 02 b02 .02b/ .05- .05- .08 per GOPD .12 .Q5- .08 .05- .10 .05-' .03 .04 .05- 1.22 Ambulance Cost 56 .65 .84 .94 1.20 .84 .62 .42 .28 .79 .69 Capital Depreciation per Outpatient 1.62 2.10 2.34 3.00 2.10 3.05 1.05 .70 1.98 1.73 ] 40 Foregone Capital Earnings per Outpatient 1.55 10.46 Inpatient Costs 21.96 13.02 23.70 20.63 13.74 17.92 13.13 17.33 17.89 15.61 Recurrent Cost per Inpatient Day 102.60 220.41 107.03 110.04 74.14 71.03 92.08 182.91 85.20 202.83 Recurrent Cost per Inpatient 137.45 29.11 110.91 per Maternity Case 70.33 178.48 92.61 per General Medicine Case 3.88 4.07 6.46 4.93 5.14 4.44 5.33 4.44 5.45 5.61 per Inpatient Day 4.89 4.35 51.95 44.81 36.44 Capital Depreciation 24.24 50.28 44.20 36.08 21.10 37.51 23.54 23.57 54.49 12.85 Capital Depreciation per Inpatient 13.62 14.03 9.70 10.18 16.15 12.32 12.22 11.87, 11-.10 13.32 11.10 Foregone Capital Earnings per Inpatient.Day 110.50 90.20 52.75 129.88 112.03 91.10 58.85 58.93 136.23 60.60 125.70 Foregone Capital Earnings per Inpatient 93.78 by the number of specialty and general medicine Estimate of JohoreBharu G.H. used. c/ Weighted a Estimate of Kotalharu G.H. used.. outpatients. Table 5

HAIAYSIAN HOSPITALS: 1973 VOLUME OF OUTPATIENT AND INPATIENT SERVICES IN SELECTED OUTPATIENTS INPATIENTS In In Total Average Capacity Specialty Inpatient Duration of Utilization Total General Total Total Clinics Stay Rate Outpatients Medicine Hospital Beds Admissions Days (est.) 7.67 82.5% 531,493 245,181 314,943 Pcnang G. H. 903 35,467 272,033 99,621 10.22 71.4% 206,824 113,203 Kota Bharu G. H. 789 20,121 205,637 27,429 9.23 70.1% 135,109 107,680 Kwantan G. H. 368 10,202 94,170 306,882 9.30 85.0% 532,494 225,612 Kuala Lumpur G. H. 2,016 67,231 625,245 141,363 9.09 76.8% 273,050 131,687 Johore Bharu G. H. 1,067 32,966 299,665

145,292 -- 61,655 5.41 82.7% 145,292 Bukit Mertajam D. H. 206 11,398 67,041 -- 10,585 5.31 70.7% 67,041 Balik Purau D. H. 41 1,992 43,341 -- 17,885 5.46 65.3% 43,349 Kuala Krai D.H. 75 3,276 66,094 -- 49,275 7.88 67.5% 66,094 Mentakab D. H. 200 6,253 5.19 87.6% 25,585 25,585 -- Tanjong Karong D. H 81 4,995 25,915 8.04 51.9% 42,865 42,865 -- Kajang D. H. 200 6,126 49,275 7.09 68.0% 64,292 64,292 -- Segamat D.H. 244 8,551 60,590

(Malaysia). Source: Unpublished statistics, Ministry of Health Table 6

The Total Recurrent Cost per Inpatient Stay and Staff Cost per Outpatient Visit in General Hospitals: By Specialty, 1973-1974 (in Malaysian Dollars)

Staff Costs Per Specialty Outpatient Visit Total Recurrent Cost Per Specialty Inpatient Stay- Penang Kota Bharu Kwantan Kuala Lumpur Johore Bharu Penang Kota Bharu Specialty G.H. G.H. G.H. G.H. G.H. G.H. G.H.

1. General Medicine M$ 1.34 M$ 1.47 M$ .77 M$ 1.65-1.98 M$ 1.18 M$ 178.48 M$ -- 2. Surgery 16.10 1.83 3.00 3.77 1.46-8.00a 138.16 153.85 3. Dermatology 2.20 1.11 4.00-7.00 3.42 3.01 476.49 18,4.26 4. Pediatrics 5.87 2.75 2.88 2.68 7.13 166.12 123.44 5. Diabetes .33 6. General Medical 3.00 3.15 3.80 3.03 '3.21 Followup 7. Orthopedics 4.02 10.15 4.54 3.13 185.83 178.90 8. Eye, Ear, & Throat 4.94 3.27 3.74 332.77 9. Psychiatric 3.79 7.16 9.79 230.09 282.66 10. Tuberculosis .61 .56 .83 702.28 1921.00 11. Opthalmology 1.41 3.11 3.30-4.40 3.34 2.28 180.27 259.40 12. Gynecology l.42 . 43434.81 98.73 130.59

13. Neurosurgery 12.12 25.00-36.00 14. Urology 7.59 15. Nephrology 8.66

Average Staff Cost of 2.10 2.16 4.75 4.22 2.58 Specialty Outpatient Care (rows 2-15)

$1.46 for followup cases. $8.00 for new cases. b/ Average cost in specialty = (cost per day)(average length of stay in specialty) -28- heavy use of the pharmaceutical, X-ray and laboratory departments. Using the same methodology as above, one could estimate the total outpatient- related staff cost for each department. Since these units jointly service both inpatient wards and outpatient clinics, it was necessary to impute the share of staff time associated with the latter. The easiest and least reliable approach was to ask the staff of each department to make this imputation. As discussed below, an alternative method was developed for each of these subsidiary services. However, cost estimates by particular specialty, such as we obtained for clinic staff, were generally unobtainable. Using the pharmacies of four separate hospitals, a sample of the prescrip- tions for approximately 200 general outpatients and 100 specialty outpatients was randomly pulled for two days in 1973 (Table 7). Based on the wholesale drug prices of the government's Central Medical Stores, the value of each prescription was calculated. In table 7, average and median values per prescription are presented. Assuming that all outpatients receive prescriptions,2 we can obtain the total cost of outpatient prescriptions for a hospital in 1973 by multi- plying the average prescription cost by the total number of outpatient attendances. The ratio of this value to the total value of drugs used in the hospital was then used to estimate the share of pharmacy staff costs attributable to the outpatient care. In hospitals where this sur- vey was not undertaken, we applied the survey results to make a similar imputation. For the radiology department, we made a study of the cost of x-ray tests for the Kota Bharu and Kuala Lumpur General Hospitals. From discussions with personnel, it may be assumed that three film exposures are taken, on average, for each inpatient x-rayed relative to one for an outpatient. Given records on the number of outpatients and inpatients that were x-rayed, one may calculate the total film exposures for each.

1These were Johore Bharu, Kota Bharu, Kuala Lumpur General Hos- nitals and Tanjang Karong District Hospital.

2In Johore Bharu, we used the actual medical records of 350 pa- tients so that we could adjust these estimates for those patients not receiving any drugs (approximately 5 per cent). -29-

Table 7

The Average Cost of Outpatient Drug Prescriptions in Four Malaysian Hospitals: 1973

Number of Total Value Average Median Type of Outpatient Clinic Prescriptions

Johore BharuGeneral Hospital General Outpatient Clinics Casualty Outpatient Dept. (O.P.D.) 38 M$ 48.00 M$ 1.26 M$ .68-.82 Govt. Employees' O.P.D.* 43 73.35 1.70 .53 Female O.P.D. 56 43.82 .78 .90 Male O.P.D. 62 53.92 .87 .60 199 219.09 1.10 Specialty Outpatient Clinics Chest Clinic 25 1.57 .06 .05 Eye Clinic 30 10.92 .36 .10 Psychiatric Clinic 3 .96 .32 .32 E.N.,T. Clinic 3 1.12 .37 .46 Skin Clinic 20 62.99 3.15 2.78 General Medical Followup 10 26.24 2.62 1.32 91 103.80 1.14 *One prescription cost $42.52

Kuala Lumpur General Hospital General O.P.D.: May 15, 1973 101 90.21 .89 .69 Dec. 15, 1973 100* 147.00 1.47 .66 201 237.21 1.18 *One item cost $58.02

Tanjong Karong District Hospital General O.P.D. 90 65.00 .72 .21

Kota Bharu General Hospital General O.P.D.: Oct., 1973 100 89.00 .89 May, 1973 100 129.00 1.47 200 218.00 1.09

Specialty O.P.D. Oct. , 1973 50 56.00 1.12 May, 1973 50 46.50 .93 100 102.50 1.03 -30-

Multiplying by the price of film, one can derive the total value of film used for outpatient x-rays, and an estimate of the average cost of x-ray film per outpatient. Again, we used the ratio of the value of film for outpatients to the total value of consumed film to impute the share of x-ray department staff costs attributable to outpatient care. For hos- pitals where this estimation process was infeasible, the estimates of the outpatient share in the Kota Bharu General Hospital were applied to the x-ray staff cost calculated for each hospital. The estimates of x-ray film cost per outpatient in the Kota Bharu General Hospital were also used. For the laboratory department, records are usually kept of the different tests performed for outpatients and inpatients. These include tests of blood sugar, urine, hemoglobin, white blood cell counts, etc. Conceptually, the most precise allocation of staff time could have been obtained by timing each of the tests. Since this proved impossible, we used the proportion of total tests taken for outpatients, and multiplied this by the value of total laboratory staff expenditure. To obtain other costs per laboratory test, we used esti- mates of the non-staff recurrent expenditure of the separate laboratories for specialty and general medicine outpatient services of the Johore Bharu General Hospital. The former laboratory performs both inpatient and outpatient tests. The chief pathologist estimated that the cost per inpatient test was 1.5 times larger than that per outpatient test. Given data on the total running cost of the specialty laboratory and the number of outpatient and inpatient tests performed, an estimate could then be obtained of the cost per specialty outpatient test. Similarly, given the total running cost of the laboratory for general outpatients and the num- ber of tests performed in 1973, one could obtain an estimate of the cost per general medicine outpatient test. Given the homogeneity of these tests, these. estimates were assumed to be valid for the other hospitals. In table 4, these unit recurrent cost estimates are compiled for the five general hospitals in our sample. The relative importance of outpatient activities in total hospital spending is also indicated for each of the hospitals in table 4. On aver- age, outpatient activities absorb apprDximately 18.2 and 24.2 per cent of hospital spending in the general and district hospitals, respectively. -31-

Inpatient Expenditure Our methodology assumes that the total expenditure on inpatient services may be obtained by subtracting the total expenditure on out- patient services from a hospital's total expenditure in a given period. Conceptually this is an overestimate, since it includes such overhead and maintanance items as heating, electricity, transportation, administration and laundry. These items should also have been partially allocated to our estimate of outpatient services. To make this imputation would have re- quired detailed estimates of hospital expenditure by object category and this was not easily obtained. Since the share of these items is probably quite small, less than 10 per cent, the bias was probably not large rela- 1 tive to the biases already inherent in our basic estimation procedure. The cost per day of inpatient care may be crudely calculated by dividing total inpatient expenditure by total hospital admissions (IP). The recurrent cost of a day of hospitalization, Cd , requires data on the total number of inpatient days (IPDYS) where

IPDYS =(IP) (ALS) and where ALS equals the average duration of stay. We can derive IPDYS 2 from the data kept on the capacit:y utilization (CU) rate of each hospital, since

IPDYS = (CU)(365)(TOTAL BEDS)

It should be noted that the cost per inpatient stay, R R CR = (ALS) x (Cdy)

For any particular specialty inpatient service i, the same relationships apply with each of the variables being specific to the particular service. Estimates by specialty were obtainable only for the general hospitals of Penang and Kota Bharu. For any specialty i,

(ALS ) x C i cRIi = i dy,i

Moreover, since we underestimate total hospital expenditure it is probable that our estimate of this residual (QIj +) is also an underestimate. In other words, the residual is probably close to Zl,J. 2 In most countries, records of inaptient days and total admissions are directly kept, and CU is calculated using the above formula. It is not clear how the Malaysians obtain their estimate of CU but it probably is derived by using data on total daily bed occupancy. Records on ALS and on IPDYS are not directly kept in a reasonably accessible form. -32-

CIi simply If Cdy,i is assumed invariant across i, then we may calculate Cd by ALS. for any i. Given data on the number of in- by multiplying dyI by esti- patients and beds by specialty, an estimate of ALS. was obtained bed occupancy mating the average capacity utilization rates CUi from daily records (table 5). by In Malaysia, hospital inpatient capacity is also delineated classes is in three classes of service. The principal difference between (2) the quality terms of (1) the degree of privacy and space per inpatient, There are fewer of the nursing care and (3) the quality of diet provided. should be a inpatients in the first and second class wards, and there quality of medi- higher amortized capital cost per inpatient. Although the there is also more cal care is presumed to be the same across classes, wards. The diet nursing staff available per patient inrthe higher class the cost of is also unquestionably better.1 These differences increase cent but this is these higher class wards by approximately 10 to 20 per these watds. Un- more than compensated by the fees charged to patients in care and drugs. like third class patients, they must pay for both medical in the net For lack of time, we did not attempt to estimate the difference cost of treatment by class.

The Capital Cost of Hospit.al Services of On the basis of recent investment experience by the Ministry In Ap- Health, one may estimate the capital cost of hospital services. are pendix B, the capital costs of four recently constructed hospitals presented. Weighting the cost per bed by the number of beds in each If we exclude hospital, the weighted capital cost per bed is M $38,200. of capital to the possibility of capital gains or losses, the user cost of capital, the Malaysian government is the sum of the opportunity cost a user cost of r, and an annual amortization factor, 6. We shall assume cent. capital equal to 14 per cent, where r = 10 per cent and 6 = 4 per be- The allocation of this annual user cost of capital per bed and empirically tween inpatient and outpatient services is conceptuially

cost- 1In a March 1971 memorandum, the Ministry suggested a diet and first ing M $.86 -$1.45, M $1.80 and X 63.80 for the third, second the actual 1974 class wards, respectively. In Kwantan General Hospital, and $3..25 in daily expenditure on diet per inpatient was M $1.85, $2.20, the three wards, respectively. I -33-

capital expenditure on difficult. Besides the cost of land acquisition, equipping of (1) inpatient a hospital may include the construction and (3) subsidiary departments wards and kitchens, (2) outpatient clinics, pharmacy and medical (surgical theatre, emergency room, x-ray department, staff living quarters. Con- store, laboratory, etc.) and (4) hospital capital items as (4) ceptually, should expenditure on such nontrivial of providing medical services? In or land acquisition be imputed to the cost on staff quarters reflects the market the Malaysian case, public expenditure industry. The govern- failure of the private sector in the construction insuperable difficulties ment is compelled to provide housing or face personnel. Conceptu- in attracting and holding medical and paramedical of housing investment ally, one would want to impute only that share government's revenues necessary to overcome this market failure. If the net cost may be negligible. Sim- from housing rentals are considered, the (3) should be imputed to the ilarly, what component of items (1) through provision of outpatient services? government's invest- Lacking any information on the nature of the are fully included ment in housing, we have assumed that housing costs assume that the share of out- in hospital capital costs. We shall also may be used to prorate patient services in total recurrent expenditure and outpatient services. the user cost of capital as between inpatient area, we have further Since outpatient services require a smaller spatial by 20 per cent. The scaled down this outpatient capital cost estimate capital cost per outpatient is equal to (yj)(.8)(r+6)(M$38,200)(BEDS) Total Outpatientsi in total recurrent costs in where Y. = the share of outpatient services equals hospital j. The capital cost per inpatient day (r+6)(M$38,200)(1-.8y.j)(BEIDS). Total Inpatient Daysj

Observations on the Cost of Hospital Medical Services services emerge Several features of the cost structure of hospital cost of the outpatient from tables 4 and 8. First, the unit recurrent is higher than in the and inpatient services provided by general hospitals per outpatient and district hospitals. The recurrent cost of treatment Table 8

Estimates of the Average Cost of Inpatient and Qutpatient Treatment in a Sample of Malaysiati Hospitals (in Malaysian Dollars)

(1) (2) (3) For Patients Treated in: General District All Hospitals- Hospitals- Hospitals -

Outpatients Recurrent Cost Per Outpatient c M$ 4.39 M$ 2.75 M$ 3.63 Per Specialty Outpatient 5.47 Per General Medicine Outpatient 3.10 2.75 2.94 Capital Cost Per Outpatientc/ 2.70 3.05 2.84 Of which: Depreciation Cost Per Outpatient .77 .87 .82 Foregone Capital Earnings 1.93 2.18 2.05 Per Outpatient Total Post Per Outpatient 7.09 5.80 6,47 Inpatients Total Recurrent Cost Per Inpatient Day 21.14 13.54 17.60 TotalToa Recurrentieurn CosCost PePer InainInpatient Treatedrae '193.18131 90.779.7145.49 154

Share of Total Recurrent Expenditures on Out- 18.19% 24.21% 19.26% patients' Activities

Total Capital Cost Per Inpatient Day 16.13 18.52 17.24 Of which: Depreciation Cost Per Inpatient Day 4.61 5.24 4.90 Foregone Capital Earnings Per ' Inpatient Day 11.52 13.28 12.34 Total Capital Cost Per Inpatient 146.93 128.31 138.25 f which: Depreciation Cost Per Inpatient 41.98 36.66 39.50 Foregone Capital Earnings Per Inpatient 104.95 91.65 98.76 Total Cost Per Inp4tient Day 37.27 32.06 34.85 Total Cost Per Inpatient 340.11 219.02 283.77

Ratio of Recurrent to Total Capital Invest- i ment'Expenditures for the Institution 18.30% 11.10% 14.90% b/The estimates in columns (1) and (2) are weighted by the fraction of beds in General and District Hospitals, (53.44 and 46.56-percent respectively). a/The estimates are.derived by using as weights the number of beds for the hospitals in the sample for each particular type of hospital. c/if total outpatients are used as weights, we obtain an estimated recurrent cost per out- patient of $4.13 and $2.36 for general and district hospitals, respectively. Similarly, t,he capital cost per outpatient is $2.60 and $2.19 in the two types of hospitals, respectively. -35- per inpatient day is approximately 60 per cent higher in the general hospitals (M $4.39 vs. M $2.75 for an outpatient visit, M $21.14 vs. M $13.54 for inpatient day). For inpatient services, the longer average duration of stay further widens the differential, between the cost of treating the average inpatient in the two different hospital units (M $193.18 vs. M $90.77). This difference is not surprising. The higher cost of specialty care at both an outpatient and inpatient level is borne almost wholly at the general hospital level. The average cost of a specialty outpatient consultation is twice as high as for a primary outpatient visit. Since there is only a negli- gible difference in the cost of the latter in the two hospital types, the specialty outpatient cost differential is the principal source of the total unit outpatient cost differential. There is also considerable vari- ance in the cost of a specialty outpatient visit or inpatient treatment (table 6). A few specialty services, particularly surgery, are extremely costly; some are inexpensive (outpatients with tuberculosis or diabetes). Across general hospitals, the variance in the cost of an outpatient visit for given specialty clinics is not wide, for most specialties. Any such differential would suggest inefficiency in the allocation of resources between hospitals. For the outpatient clinics in pediatrics, general medical follow-up, obstetrics-gynecology, opthalmology, tuberculosis, otolaryngology and dermatology, the range in the cost of treatment is narrow, regardless of the hospital chosen. We have less information on the cost of specialty inpatient care, but sim- ilar observations appear to hold as with outpatient services. The average recurrent cost of inpatient treatment in the district hospitals is ap- proximately M $90.77, and this principally reflects treatment for general medical cases. For the two general hospitals where we have estimated the inpatient cost by specialty, the cost of most specialty inpatient treatment is more than double. Only gynecological and obstetrical cases are fairly inexpensive, primarily because of the short duration of stay. To summarize, the higher cost of treatment in the general hospitals merely reflects the higher percentage of their outpatient and inpatient case load in specialty services. Secondly, the unit capital cost of treatment is higher in the district hospitals than in the general hospitals, although the cost -36- differential is too narrow to overwhelm the difference in unit recurrent costs. The unit capital cost of an inpatient day is M $18.52 and M $16.13 in the district and general hospitals, respectively; for outpatient treat- ment, the cost is M $3.05 and M $2.70, respectively. In fact, the unit capital cost of care is higher than the unit recurrent cost for the dis- trict hospitals. The lower capital cost in the general hospitals suggests that economies of scale overwhelm any higher costs arising from more com- plex equipment for specialized services. For both types of hospitals, the inclusion of user capital costs in the cost estimation raises the total cost of treatment by 70 to 100 per cent over the unit recurrent cost. Thus, the sensitivity of total cost estimates to our assumptions concerning the level of r and 6, and the appropriateness of their inclu- sion, must be recognized. Thirdly, from our cost estimation process, two-thirds of the average cost of treatment is accounted for by the cost of staff, at the clinic and subsidiary departments. The bulk of the residual is accounted for by drugs. A caveat in the use of this data is that these are mean estimates. It is likely that the median cost of treatment is lower in these hospital units. For example, in table 7, the median cost of drug prescriptions in the primary outpatient clinics is almost uniformly lower than the mean cost. A few high cost prescriptions may easily-boost the mean cost sharply above the median.1 Thus, a large percentage of patients may be treated at a lower cost than would be suggested by these cost estimates. This is particu- larly significant when we compare these costs with those of outpatient treatment in the main and sub-health centers of the Rural Health System. In the district hospitals, the possibility of a long consultation with a physician or the prescription of expensive drugs is real and sig- nificant. The pharmacies are stocked with such drugs because they are also servicing inpatients. At a health center, this possibility will not exist; consultations with a physician will occur at a physician's clinic separate from the regular primary outpatient clinic. Similarly, the supply

1For example, the cost of one hundred prescriptions sampled at the outpatient clinic of the Kuala Lumpur General Hospital was M $147.00 One of these prescriptions alone cost M $48.02. -37-

care of drugs is far more limited. Consequently, the average outpatient to the cost will be higher in the hospitals since it is possible to move extreme end of the cost spectrum if it is required for treatment. Fourthly, the special role of the Kuala Lumpur General Hospital stands out from tables 4, 6 and 7. The cost of services in this institu- tion, on average and for particular specialties, is clearly higher. Finally, the level of these unit costs may be compared with simi- lar estimates by the author of the cost of hospital treatment in Tunisia. struc- Tunisia is a reasonable basis for comparison since it has a similar ture of hospital referral capacity. The cost of inpatient care in Malaysia the differential is approximately sixty per cent higher. More interesting, is wider at the outpatient level. This reflects the different effective priority given to inpatient and outpatient care in the two hospital sys- tems.1

Table 9 Comparison of the Average Cost of Care in the Public Hospitals of Malaysia and Tunisia (in US $)-

Tunisia Malaysia Inpatient Inpatient Average Recurrent Cost in: Outpatient Day Outpatient Day District hospital $.43 $3.03 $1.17 $5.76 Regional-general hospital .80 5.55 1.86 9.00

using official exchange rates B. Estimates of the Cost of Medical and Health Services in the Rural Health System

The multiplicity of outputs provided by the Rural Health System suggest that an estimation of the unit cost of outputs will confront prob- lems similar to those encountered in the previous part. The methodology must pxecisely allocate staff and other inputs to particular activities with identifiable outputs. Knowledge of the magnitude of a center's total expenditure and different outputs would be insufficient for accurate

1See P. Heller, "An Analysis of the Structure, Equity and Effec- tiveness of Public Sector Health Systems in Developing Countries: The Case of Tunisia, 1960-1972," The University of Michigan, Center for Re- search on Economic Development, Discussion Paper, January, 1975. -38- cost estimates. Each of the outputs must be weighted by their require- ments in terms of staff time, skills and raw material,. Fortunately, there is clearly a specialization of functions between the curative, maternal-child health, environmental and denital personnel. As a conse- quence, the number of possible outputs for each member of the staff is few in number. Two alternative estimation procedures could be used. The most tliorough and accurate, and also most expensive, would be an operations research approach. Specifically, a project team would record, over a fixed time period, how each member of a center's staff allocated each minute of each day. Such a methodology would allow an accurate estima- tion of the time devoted to each output as well as to, slack time. Such a methodology was used by a W.H.O. operations research team in a pilot study of a small number of Malaysian health centers in 1970.1 Such an approach was infeasible for our study, given the limited availability of time and resources. The alternative methodology chosen was a set of detailed open- ended interviews with the staff members in charge of maternal-child health and general outpatient activities (the staff nurse and hospital assistant, respectively). Each was asked to estimate how each member of their respective unit spent each day of the week, the number of hours per activity, and the average attendance per activity. Since the centers are required to make public up-to-date schedules of their activities for the benefit -of their client populations, these proved a useful starting point for the interviews. 2 From these interviews, we reconstructed the total staff hours

World Health Organization, Special Report on the Study of Local Health Services (Operations Research 'Unit, Ministry of Health, Malaysia), Nov. 9, 1973, W.H.Q. Document Malaysia-4002E.

2One difficulty encountered was that the staff were available only during working hours and their time was budgeted fairly tightly. Often, some of the staff were engaged in clinics at the center or in mobile dis- pensaries. Thus, the research was severely limited by our unwillingness to excessively impose on the staff, particularly in the context of ill patients awaiting treatment. Although more time could have been spent at any institution, this would have sharply reduced the sample of units studied. -39- attached to a given activity by different personnel. Assigning specific the average hourly wage rates to each personnel category, we calculated output total staff expenditure per activity. By choosing an identifiable biases for each activity, unit recurrent staff costs were estimated. The or in this analysis are obvious. It is influenced by the best judgment biases of the personnel involved. The actual flow of services received the by a patient are overestimated, since it is effectively assumed that entire period devoted to an activity is devoted to patient care. Yet there are undoubtedly slack periods. Moreover, any clinic activity may produce multiple outputs. Finally, the variance on the time spent per patient at a clinic was not estimable. Since personal emoluments absorb 85 to 90 per cent of a health remains centert's total budget, only a small fraction of recurrent inputs to be allocated. Drugs are principally used for general outpatient care, and it is possible to make crude estimates of the average drug cost for a set of commonly diagnosed maladies. Overhead and general supervision costs remain as a residual. In the limited time ava'lable for this study, the choice of a set of outputs to be costed was dictated by the concurrent household survey on the consumption of publicly provided goods and services. A subset of any center's activities can be accurately conceived as consumed by parti- cular members of the community. The public sector's expenditure to oper- ate outpatient clinics, maternal-child health clinic services, school health clinics, or dental care services is conceptually imputable to a particular set of individuals. However, there remains a significant portion of a center's recur- rent expenditure which is not easily allocable on an individual basis. This residual is primarily accounted for by expenditures on environmental health services, medical record-keeping and on the general supervision of health programs -in the community. A similar imputation problem arises with 'respect to the amortized capital cost of the center. Conceptually, there may be controversy over identifying the precise recipients of these services. Are they the members of the community who actually utilized the services during the year? Or does the total client population of the center benefit from the option value of having these services available to the entire community? In the latter case, one could allocate these residual -40-

client population. expenditures on a per capita basis to the entire of the center, In what follows, we shall outline the activities drugs required to produce their identifiable outputs, and the staff and of these outputs for a these services. We have estimated the unit cost states of Peninsular Malay- sample of main and sub-health centers in five 12. In Appendices C sia, and these are presented in tables 10 through for the Machang Main and D we have illustrated the methodology used Health Center of Kelantan.

Maternal-Child Health Activities Pregnant women are 1. Ante-natal clinics at the health center: midwife to have at least strongly encouraged by the government or private t.rained staff nurse. The one ante-natal examination by a physician or scheduled appointments. Ante- clinic is usually held once a week, without come to the clinic. An aver- natal services are provided to all women who or staff nurse, an assistant age clinic will be staffed by a physician an ante-natal clinic visit. nurse, and a midwife. The output measure is is indicated in tables 10 The staff cost of this output for each center and 11. Although in theory 2. Child health clinic at the health center: 3, it is primarily for in- these weekly clinics serve children up to age have recently given birth. fants of less than a year and for mothers who and infants. The clinic Often, separate clinics are held for toddlers and midwife. The output is staffed by an assistant nurs.e, staff nurse regardless of whether measure is the family child health clinic visit, or the infant. the actual recipient of the service is the mother held by a 3. Subsidiary clinics--ante-natal or post-natal--are usually at a midwife nurse from the center outside the health center, may go to one or several clinic. The staff nurse and assistant nurse measute is a visit to a MCQs in a day at scheduled times. The output to delineate which clinmtcs clinic. For this estimate, it was necessary at each, and the distance are visited, the average nuflber of patients travelled. pregnant women are 4. Home visits: A very high fraction of all at least once during the visited by a governmenit midwife at their home, th.e delivery. If the delivery course of pregnancy and several times after Tabla 10

Eatitates of the Unit Recurreat and Capital Cost of, the liedical and Hetornel-Child Health Servicus of the Rural 11ealth Systemt Selected Unite in Kolanten, Penang and Selangor (in MalaysLan Dollars)

Penang Kelantan Selangor hayen Ayer K. Semang Tanaernarh MWehang Ayer Sabak Sungei Lepas Putoh HR1C IHC NmC Lopas Bernam Besar MHC SHC 1C0 SSIC HIIC

Ceneral Outpatient Visit at Centers StAff Cost Per Outpatient 14 .69 M$ .80-0.97 14$ .91 14* .72 K1$.93-2.30 H$ .71 M$ 1.00-1.24 Drug Cost Per Outpatient .10, .09 .22-0.32 Doctor's Referral Clinici Staff Coat 4.17-6.20 4.44-8.87 Traveling Dispensary: Staff Cost Per Outpatient .17 .44-0.56 .40-1.28 .58-4.40 1M63 .33-0.65 Drug Cost Per Outpatient .Ol-C.lS Antonatal Clinic at Centert Staff Coat 1.U4 1.70 .53 1.16 1.09 2.58-3.88 2.54-3.39 Child Health Clinic at Center: Staff Cost Per Clinic Attendant .30 .50 2.83 .35 1.14 .79 1.80-3.37 .71-0.86 Drug Cost Per Clinic Attendant up to 3.00 Subsidiary Child Health Clinic at Mldwife Clinic: St:sf Coat Per Clinic Attendant .77 .83-3.17 1.10 .5& 3.06-4.59 Subsidiary Antenatal Clinic Midwifa Clinict Staff Coat Per Clinic Attendant' .54 3.60-4.34 llome Visit by: Staff Nurna 1.61-2.00 .42 2.50-5.01 3.88 3.81 Assistant Nurse .45-0.89 .24 2.12 2.97 Mdvidfe 1.42 School Health Clinics Per Pupil .33-0.50 .38-0.51 .63-0.79 .41 .67 .37 .61 .80-1.07 Maternity Care: Per Delivery t max-16.32- -20.72 Amortization Cost Per Attendant at Outpatient or M.C.H. Clinic .37 .58 .24 .32 .33 .33 .46 Capital Service Coat Per Attendant at Out- patient or H.C.H. Clinic .93 1.45 .61 .80 .82 ,81 1.15 Totnl Staff Costs 85068 39648 70669 71768 1187PO 30728 42212 1040`88 EnvIronmnental Staff 14700 8880 8880 1C280 10280 3060 6140 15020 Supervisory: Medical in District 9059 12792 11660 23930 -- 14042 Maecrnal-Child lIcalth 8580 8580 ; 4290 Matcrnal-Child llealth 18979 14664 18768 21652 26261 10850 18586 29871 General Curative Care 17416 7256 13740 14250 25919 6195 11916 19858 Schnol lealth 3848 1374 2818 lice 2091 1961 2574 2865 (Itl,er Staff Costsi Not Easily Attributed 12480 7211 12560 lt21S 2l639 8662 2996 18144 Nuastaff Costa 8220 7350670 17850-21350 drugs 2i500 2800 2000 !7500-11000 Telephone lo00 1000 480 1450 W.lLer and Lights 720 550 4 50 3200 VY01Ictes 4000 3000 * 900 270Q Launidry 840 3000 Nons.-taff Cost Per Attehdant at Clinic .21 .11 .21 .63, Table 11 Estimates of the Unit Recurrent and Capital Cost of the Medical and Maternal-Child Health Services of the Rural Health System: Johore and Kedeh (in Malaysian dollars)

Batu Pahat JOHORE KEDAH Maternal Bakar i Child Parit ALr Yen Langkawi Baling Bata Health Kulai Jawar Baloi Paloh Endau Tengelu Besar SHC SHC SEC Center SilC MHC MHO SHC MHC SHC SHC

General Outpatient Visit at Center: .27 .74-.88 .88-.97 .66 2.05 .91 .80 1.11 Staff cost per outpatient .281 Doctor's Referral Clinic Travelling Dispensary: .84 .22-.35 .85 .66-2.25 1.67 Staff cost per outpatient .20-.77 Antenatal Clinic at Center: .46 2.36 1.61 1.12 1.79 1.72 1.23 1.11 Staff cost per clinic attendant 1.10 .52 1.88 Child Health Postnatal Clinic at Center: a .63 .48 .96 .93 1.15 1.02 .96 1.99 Staff cost per clinic attendant .72-1.60-- .44 .47 Drug cost per clinic attendant .02-.315 Subsidiary Child Health Clinic at Midwife Clinic: 2.40-5.60 .75 .81 .84 Staff cost per clinic attendant Subsidiary Antenatal Clinic at Midwife Clinic: Staff cost .77-2.10 Home Visit by: 3.22 Staff Nurse 1.99 Assistant Nurse 2.01 Midwife School Health Clinic per pupil .50 .68 Amortization Cost Dlr Attendant at .29 .45 Outpatient or MCHClinic: .36 Capital Service Cost per Attendant at 1.12 Outpatient or MCH Clinic: .72 .91 56728 29528 54898 27108 32364 35096 37428 TOTAL STAFF COST 33428 61278 3830 3070 3830 3060 Environmental Staff 3830 11190 4600 Supervisory: 14043 Medical in District 14043 12516 Maternal-Child lHealth 15060 17240 10392 15365 Maternal uniid iiealtji 15764 15306 14209 8079 15189 8454 8704 General Curative Care 8455 15234 18975 1382 (incl. in MCH) 1780 2479 School Health 2868 2820 2800 1177 5356 2652 2756 Other Staff Costs not easily attributed 2511 2685 3178

a! M1$.72 for Lhe child-health clinic; M$ 1.60 for the postnatal clinic. Table 12

The Cost and Volume of Curative and Maternal-Child Health Services Provided at a Sample of Rural Health CentersinMalaysia: 1973-1974

Outpatient Outpatient Ante-natal Child-health Subsidiary Medical School Visits at Visits at Clinic Visits Clinic Visits M.C.H. Clinics Officer's Health Center Traveling Clinic Clinic Dispensary Main or Sub-health Center (1) (2) (3) (4) (') (6) (7)

Penang

Bayan Lepas M.H.C. 21419 13042 720 4080 -- n.i.R/ 8000 Ayer Puteh S.H.C. 12000 11250 1750 3000 2000 n.l. 2800 Kubang Semang M.H.C. 22053 10384 1488 1200 -- n.i. 3600 Kelantan

Machang M.H.C. 28375 7561 3840 4800 -- n.i. 1950 Tanamerah S.H.C. 16786 5839 3600 4000 2500 n.i. 2520 Ayer Lenas S.H.C. 11308 4784 2160 2640 33(0 n.i. 4800 Selangor

Sungei Besar H.H.C. 23758 -- 1680 5280 500 720 2800 Sabak Bernam S.H,C. 19875 -- 1200 1584 7,0 1200 4500 Johore

Parit 4awar M.$.C. 4984 17856 1536 5664 n.i. n.j. 3200 Endau M.C.H. 9819 4380 2250 2750 4(8 n.l. n.i. Ayer Baloi M.H.C. 10422 4145 1152 5664 o.J. n.i. n.i. Kulai S.H.C. 19250 6168 4650 5500 n.i. n.l. 8000 Palob S.H.C. 7922 5376 1440 2400 n.i. 500 1600 Tengelu S.H.C. 2208 3750 400 2100 1526 n.j. n.i. Batu Pahat M.C.H. Center n.i. n.i. 7500 13000 3240 n.i. 5400 Kedah Yen Besar S.H.C. n.i. n.i. 1600 2750 4000 n.i. 1400 Langkawi S.H.C. 2250 n.i. 2250 2250 84(0 n.i. n.i. Baling S.H.C. 2500 1790 1750 1600 1800 n.i. n.i. Bakar Bata S.H.C. n.j. n.i. 10o00 7500 n.i. n.i. 1200

Average Unit Recurrent Staff Cost of Output Category: .77 .85 1.24 .73 1.34 5.72 .56 Assumed Drug Cost'of:. .07 .07 .06 .06 .06 .15 n.i. Average Recurrent Cost: .84 .92 1.30 .79 1.40 5.87 n.i.

atno information.

Souce: Unpublished statistics, Ministry of Health (Malaysia). -44- is not made by a private village midwife (bidan), there may be five to ten visits per delivery. Usually, the midwife will be joined by a staff nurse or asiistant nurse once after the delivery, at which time the mother will be clinically examined, and instructed on the proper care and feed- ing of the child. An assistant nurse will also visit ante-natal or post- natal defaulters--mothers or pregnant women who have not appeared at the clinics.1 The relevant output measure is the number of homes visited by a staff member during a given time period. Obviously, the more distant the set of homes visited, the higher the cost per home visit. 5. Supervision of midwife clinics under the center's jurisdic- tion: The staff nurse or nursing sister is responsible for the super- vision of the care given by the government midwives. Consequently, one morning per week the nurse will visit a given midwife clinic to observe the midwife's performance. In addition, once a month, all village mid- wives are required to come to the health center to have their medical bags checked for cleanliness. 6. School Health clinics: Once a week, two nurses, an attendant and occasionally a physician will hold a school health clinic at one or two primary schools in the district. They will examine the children of one or two standard I classes (first and second grade) for malnutrition, skin diseases, dental problems, etc. Often the children will receive smallpox or tetanus immunizations. The usefulness of these clinics is questionable, since there is minimal follow-up to assure that children needing further treatment or medical supervision actually come to the center. Drug costs of maternal-child health care: The drug cost per MCH clinic attendant is small. The dispensers at these centers almost uni- formly estimated that only 10 to 15 per cent of their drug budget is allo- cated to MCH activities. With an average drug budget of M $2,000 to $3,000, MCH drug expeniditure would range from 14 $200 to M $400. From table 12, the volume of MCH attendants at a cernter may range from 3,000

1All pregnant women are required to register with the government midwife at least three months prior to delivery. Although they may de- cide to use a village midwife for the actual delivery, they are usually seen by a government doctor of the clinic once prior to delivery. It is estimated that the registration rate is close to 70 to 80 per cent of all pregnant women in the rural areas. -45-

to 8,000, with more than half in child health clinics. In addition, per- haps 2,000 additional mothers and children are seen at subsidiary clinics. This suggests an average drug cost of less than M $.06 per attendant. Alternatively, we may price the drug cost for specific preventive or curative MCH prescriptions. At one health center in Johore, detailed discussions with the physician facilitated the following estimates for most ante-natal or post-natal (well-baby) prescriptions: Post-natal Immunizations: Triple Antigen M $3.00 per course Double Antigen M $2.00 per course B.C.G. M $ .50 per course Cholera M $ .50 per course Ante-natal: to all mothers: 1) two iron tablets, three times per day for one week = M $.315 2) Vitamin B complex: one tablet, two times per day for one week = M $.006. If cramps and pain: Calcium lactate, one tablet,two to three times per day for three to five days = M $.001 to $.003. If anemic, folic acid. One tablt.two times per day for one week = M $.018. If bleeding gums: Tablets per course, M $ 002. For the purposes of subsequent calculations, the earlier estimates are more useful.

General Outpatient Activities of a Main or Sub-Health Center For the rural population of Malaysia, the main and sub-health cen- ters are the primary source of modern curative medicine. Paramedical per- sonnel play a central role in the delivery of these services, which makes the Maleaysian system unusual among other LDC medical systems. Hospital assistants have the responsibility for the initial diagnosis and treatment of any sick patients. If the hospital assistant determines the case is beyond his medical skills, it is referred to a physician for further diag- nosis and treatment. Generally, the patient would return during the regu- larly scheduled physician's outpatient clinic. If a case is extremely urgent, an ambulance from the center or from the nearest district hospital -46- is called. The activities of the curative staff fall into the following categories. The relevant output measure for each is the number of outpa- tients seen at a given clinic. 1. General outpatient clinic at the health center: There will be a daily outpatient clinic three-and-a-half to five-and-a-half days per week, the frequency depending on the size of the client population and the volume of outpatient demand. It is usually managed by a hospital assistant, although in some centers a physician may also be present. In addition, an assistant nurse, dispenser and male attendant will assist in the registration and treatment of patients. 2 2. Physician's referral clinic: The physician based at the main health center will have a regular schedule of visiting each sub-health center under his jurisdiction, once per week, in order to see all general outpatient or maternal-child health cases referred by the paramedical staff. He is usually assisted by an attendant and an assistant nurse. 3. The mobile or traveling dispensary: The hospital assistant will usually manage a regular mobile clinic to areas under the center's jurisdiction that have physically poor access to the center. The hospital assistant will go to a fixed site, either by car or by boat, and will be accompanied by an attendant and a driver. Drug costs: Assuming that 90 per cent of a center's drug budget is allocated to general outpatient services,, a reasonable estimate of the average drug cost per outpatient appears to be M $.05 to $.10. The fol- lowing are estimates of the cost of the drugs commonly prescribed for some of the ailments of children in the rural areas: Running nose: infant: M $.003 to $.008 1-2 years: M $.00l; to $.017 Cough: M $.10 to $.45, dependiLng on the severity of the cough and age of child (Syrup Benedrol or Syrup Phensedyl) Fever: M $.003 to $.005 (Syrup Paracetamol)

kIn the absence of a telephone, the center usually has access; to a police radio in order to "obtainemergency assistance from the nearest hospital.

2In many sub-health centers, the hospital assistant will also dis- pense drugs at the clinic. -47- Diarrhea: M $.009 to $.02 (mixture Kaoline Alkaline BPC) Scabies: M $.214 (25 per cent emulsion Benzyl Benzoate) Roundworm Infe§tation: M $.01 Oral Thrush: M $.01 (1 per cent Gentian Violet or oral Nystatin) Anaemia: M $.017 Malaria: M $.151 per course.

Dental Clinic Activities Basic dental services are also provided in the context of the Rural Health System. A furnished dental wing is a standard component of most main and sub-health centers. In recent years, most centers have had a full complement of trained dental staff--dentists and nurses. Mobile dental clinics also operate out of the health centers, with particular focus on dental clinics for primary school children. In 1972, the dental care unit of the Ministry of Health undertook a fairly detailed exercise in costing their services. This involved an analysis of the desired staff input requirements associated with alterna- tive dental care outputs. Although the assumed standard of service may not be fully realized, the assumed proportions of different manpower types 1 per output probably reflects accurately on the actual proportions. The unit staff costs of the five principal rural dental services may be summarized as follows' (1) (2) Cost per Cost per hour 2 consultation 1. Main dental officer clinic3 M $19.86 M $ 8.28 2. Main dental nurse clinic 8.17 1.90 3. Main prosthesis service clinic 4.67 83.40 4. Mobile dental officer clinic 16.56 4.14 5. Mobile dental nurse clinic 8.15 1.36

1 This exercise represented one of the few serious efforts by an operative department of the Ministry of Health to cost particular medical services. It is also interesting that the Dental Service has b.een reluct- ant, as a matter of policy, to establish new dental clinics unless an ade- quate level of recurrent funding was also provided. 2 These cost estimates are based on 1972 salary estimates.

3From Appendix C, it should be noted that this includes the cost of paramedical personnel assisting the dentist. -48-

One may crudely test the accuracy of these statistics by relating the total dental health service expenditure in 1973 (totalling M $8,819,000) to treatments given by dental officers and nurses during the same period. From the above estimates in column 2 (rows 1 and 2), the cost per consulta- tion done by a dental officer is 4.36 times as expensive as that done by a dental nurse. From dental service statistics, there were 1.36 million and .98 million treatments by dental officers and nurses, respectively. Weighting these by 4.36, one would obtain M $5.55 and M $1.28 as the aver- age cost per consultation by a dental officer and dental nurse respectively for 1973.

Total Recurrent Health Center Expenditure and its Allocation Across Activities As mentioned earlier, there remains a set of activities, notably relating to environmental health and general supervision, the cost of which cannot be imputed to an obvious set of individuals. The magnitude of ex- penditure on these activities may be estimated by subtracting the cost of the aforementioned services from total health center expenditure. We can also obtain a breakdown of health expenditure as between the various activi- ties: general outpatient, maternal-child health, school health, environ- mental, etc. Since dental services are financially autonomous from the rest of the center, this will be excluded. An estimate of the total expenditure on staff may be derived from the semi-annual reports of district health officers on the personnel work- ing at each MHC, SHC and MCQ. Averaging the staff of a center in Mar-' and September, and multiplying the number in each personnel class by aT average annual salary, one may estimate the core staff cost for each cen-- ter. Since over 85 per cent of the recurrent costs of the centers are for personnel, this in itself gives a fair estimate of the cost of these centers.1 Such a calculation was made for all the health centers in our sample. On average, the total staff cost of a main health center and sub- health center was T1$78,775 and M $37,930, respectively. For a smaller set of centers, we collected data on non-staff costs--drugs, telephone, laundry, water, electricity--in order to verify their relative share of

1This may be inferred by examining total state rural health system expenditures broken down by object of expenditure. -49- total expenditure. Non-staff costs ranged from M $4,700 to 4 $7,400 for sub-health centers, and from M $8,200 to M $19,000 for main health centers. Our data on the staff imputable to specific maternal-child health, school health, general outpatient clinics--mobile and center-based--allowed us to easily estimate the value of the total staff of a center, allocated to these activities.1 The salaries of the public health inspectors, public health overseers and sanitary laborers were allocated to the category "en- vironmental health." The portion of the salary of the medical officer and public health sister not allocable to direct participation in maternal- child health, outpatient or school health clinics, was allocated to the category of supervisory activities--medical and MCH, respectively. The residual staff expenditure includes the cost of the gardener, and unallo- cable portions of the salaries of the nurses, dispenser, clerk, attendants, drivers, and hospital assistants. This residual is associated with the upkeep of the ceniter's activities and to general slack time. In general, maternal-child health activities absorb the largest share of a center's staff budgets--22 to 31 per cent in main health centers, 31 to 51 per cent in sub-health centers. The staff involved in general outpatient care consumes 22 to 31 per cent of the budget. The share of school activities is low, averaging only 1 to 5 per cent of the budget. Environmental activities absorb 10 to 20 per cent of any center's staff budget. Supervisory activities by the physician of a main health center consumes 19 per cent of total staff cost. This leaves an average of 12.3 per cent of the staff budget unallocable to specific activities. Thus, curative services do not absorb the lion's share of the budget, at least in the Rural Health System.

Capital Costs The Ministry of Health's Planning Office provided the following estimates of the capital expenditure required for construction and equip- ment of an average main and sub-health center and midwife clinic:

1We have not included the cost of any staff that occasionally works at a center but is based at another operating institution. This primarily relates to the physician and public health sister, based at the main health center, who regularly visits each sub-health center for several hours per week. We have included this activity within the category of medical and maternal-child health supervisory activities at the main health center. -50-

Rural Health Institutions Total Capital Cost Annual User Cost Main health center M $360,000-440,000 M $50,400-61,000 Sub-health center 180,000-220,000 25,200-30,800 Midwife clinic cum quarters 20,000- 25,000 2,800- 3,500 The annual user cost is again estimated, assuming an annual depreciation rate of 4 per cent per annum and a foregone return of 10 per cent per annum. As with general overhead expenditure, there are conceptual diffi- culties in allocating this capital cost to particular identifiable outputs. Perhaps the simplest assumption is that the capital plant is consumed equally by all persons who attend an outpatient or maternal-child health clinic originating out of the center (regardless of whether it is a center- based or a mobile clinic). Thus,-the annual user cost of capital would be divided by the sum of all outpatient and MCH visits. This was the approach used in our costing exercise. The relevant user cost of capital would be that associated with a sub- health center. The higher capital cost of the main health centers reflects the additional cost of living quarters for supervisory staff, and additional facilities relating to the activities of the entire health district. The additional capital cannot be imputed to the consumers of the main health center's clinic services since these services appear to be identical to those received at the sub-health centers. Assuming a constant user capital cost per center, lower activity units will have a higher cost per attendant. This difference may be ac- centuated in the remoter rural areas if we allow for deviations from this assumption. Although the core of any center is architecturally standard in all areas, localities differ in their need for staff living quarters constructed by the government. This need is probably greatest in just those remote areas where attendance is lower due to a dispersed population distribution. A second approach would allocate the capital cost to all persons who attend different clinics, weighted by the relative recurrent cost of a visit to each clinic. This would imply that if a visit to a general

'Attendants at mobile clinics are included because it is unlikely the clinic would occur without the pre-existence of the health center. -51--

outpatient clinic is twice as expensive, in recurrent terms, as an ante- natal clinic visit, the capital cost differential is in the same propor- tion. Since many factors, irrelevant to the capital plant (numbers of staff inputs, drug requirements) explain these differentials, this would appear less accurate than allocation on a per patient basis. A third approach would apply the concept of option-value to allo- cate the capital cost of a center to the entire population under the cen- ter's jurisdiction. This yields the cost of providing this option-value per member of the community. For the main health center, one would de- lineate the core cost associated with provision of services to its narrow client population, from the marginal capital cost associated witlh its supervision of health programs to its larger client population of the district.

Observations on the Unit Cost of Rural Health Services In table 12, we have presented an estimate of the unit cost of different rural health services. The cost of these services is quite low, particularly when compared with the cost of outpatient care in the hospital system. The staff and drug cost received per outpatient visit in a health center (equalling M $.84 or US $.35) is one-third that in the district hospitals. Inclusion of capital costs does not narrow the differential. The unit cost of the different maternal-child health services is at a comparable level. A visit to a child-health clinic costs M $.73; an ante- natal clinic visit, $1.24, and a school health visit M $.37. In fact, the highest cost' service is associated with the physician's clinic, where the cost per outpatient ranges from M $4.00 to M $9.00. When these cost esti- mates are compared once again with estimates for Tunisia, there is a sur- prising reversal from our earlier results. The unit outpatient cost in a Tunisian dispensary becomes higher (ranaing from US $.73 to US $.30). Whereas Tunisia's hcspital expenditure per outpatient was unambiguously lower, the opposite is the case at the dispensary. This is an important result. It would be tempting to draw infer- ences from the relative expenditure differential to similar differences in the quantity and quality of output. However, Malaysia's rural health sys- tem is based on an alternative technological delivery system. This may explain the observed differences. Specifically, outpatient clinics in the Rural Health System are manned by hospital assistants, a category of para- medical manpower. They make all initial diagnostic and treatment decisions. Since their salaries are far less than for physicians, the cost of the clinic is reduced relative to the hospitals where physicians provide primary outpatient services. Drug costs are also lower, since the health center is stocked with a restricted set of relatively inexpensive pharmaceuticals. This reduces the potential variance of drug prescriptions relative to a district hospi- tal outpatient clinic. Have these substitutions lowered the quality of care available to the rural population? A conclusive judgment cannot be made, but several arguments suggest the answer is probably not. It is unlikely that the marginal product of a physician for a clinic consultation at a health center will be much higher than for a well-trained hospital assistant. The quantity of outpatient demand during the fixed hours of each clinic precludes more than five minutes, at most, per outpatient. With the limited time, and the narrow set of laboratory, radiological and capital services available at a center, the quality of the diagnostic decision and treatment will primarily be determined by the quality and the rapidity of judgment that the medical manpower bring to bear on each case. For the set of disease problems confronted on a daily basis, it is likely that a seasoned hospital assistant's judgment would be comparable to that of a young physician in these circumstances. Thl,, argument is reinforced, if one accepts the assumption of the W.H.O. Opera-

tions Research team3 that only a fraction of cases are medically "remedi- able," in the sense that medical care can influence the ultimate outcome. The residual, perhaps 50 per cent, are cases that are either incurable or would be cured even in the absence of medical care. There are potential losses in the effectiveness of medical care that arise from the technology of Malaysia's medical delivery system. These stem from (1) the limited range of diagnostic and treatment options available at a health center, and (2) the lower probability that a hospi- tal assistant will be sensitive to subtle differences in case symptoms. The former loss arises because the consultation occurs at a health center rather than a hospital. The magnitude of the loss will be contingent on

1Similarly, in the Tunisian medical system, all outpatient consul- tations are provided by physicians. There is no equivalent to the hospital assistant. -53- the efficiency and rapidity with which referral can occur in the event a patient needs more sophisticd±ted modes of diagnosis or treatment. If the referral system works well, the lower cost of a health center's outpatient services is because the external hospital system has taken care of the need to provide sophisticated options. The latter loss prinarily stems from the substitution of paramedical manpoqwer, and is not easily quanti- fied. However, the physician's clinic is frequent enough that hospital assistants need not assume too many risks in diagnosis and treatment de- cisions. In conclusion, a strong case can be made that the lower cost of outpatient services in t1e Rural Health System is principally gained by an increase in efficiency rather than a loss in the quality of outpatient services.

Another characteristic of the Rural Health System is the variabil- ity in the cost of providing a given service. At the primary clinic level, maternal-child health and Putpatient services should be reasonably homogeneous. Yet for any particular service, such as ante-natal examinations, the cost ranges from M $.46 to M $3.39. This variability suggests inefficiencies in resource allocation, a phenomenon not immediately apparent in the absence of a costing exercise. The fixed complements of staff assigned to any given clinic partially explain this. Given variability in the level of clinic demand, differences emerge in the cost per clinic attendance. This "overhead" cost phenomenon is also char- acteristic of the travelling dispensaries and subsidiary clinics held out- side the center. Some clinic sites are further from the center and service low density population groups. With a minimum fixed staff input, the cost per attendant will be unavoidably higher. This is the fixed cost of pro- viding minimal medical and health services for low density population groups in the rural areas. Finally, the inclusion of the user cost of capital virtually doubles the cost of providing services. If we amorfize the cost of capi- tal over all attenders of outpatient and MCH clinics arising from the center, we obtain a per visit average depreciation cost and foregone earnings cost of M $.37 and M $.93, respectively. This virtually doubles the cost of rural health services from the unit recurrent cost level. As with the hospital system, our estimates are thus extremely sensitive to the choice of user capital cost parameters. -54-

C. Imputation of the Cost of Training Medical and Paramedical Manpower

The government of Malaysia spends a considerable sum on the train- ing of medical and paramedical manpower. Paramedical manpower training alone absorbs M $9 million, or 3.8 per cent of the Ministry of Health bud- get. For many trainees, the government has underwritten a substantial fraction of the total training cost. For others, the government has pro- vided loans for tuitions and living costs. The gross cost to the govern- ment of training some of the principal categories of personnel are listed below: Hospital assistants: M $7,500 to M $9,000 (over 3 years) Staff nurses: 7,500 to 9,000 (over 3 years) Assistant nurses: 5,000 to 6,000 (over 2 years) Medical officers: 60,000 (over 5 years) Should this investment in human capital be imputed as an additional cost of providing specific health and medical services? Several conceptual and methodological problems are immediately raised. For the purpose of exposition, we shall examine the components of the gross cost and the revenue flows separately. We shall i iore issues of social time preference rate in this discussion. Our immediate objective is to assess the quantitative importance of this issue to our cost estimates. The gross cost of the government of this training investment is the value of the investment plus the foregone return on this capital. Since we are trying to impute the cost of this training to the costs of the specific services rendered by the "human capital" produced, it is logical to amortize the value of the investment over its useful life. The rate of amortization of the investment will be continrc -4.on the time period over which the investment yields value to the government (or its decision makers). If the government's objective is narrowly interpreted to be the provision of medical and health services, then only during a trainee's sub- sequdnt period of government service does the government receive value from its investment. If a physician served the two years of compulsory medical service for the government, one would want to amortize the iLnvest- ment over only two years. After that, the type of private practice chosen is at the discretion of the physician, and the returns from the govern- ment's investment are thereafter wholly appropriated by him. There is no -55- guarantee that the government's objectives would any longer be fulfilled. A liberal interpretation of the government's objective function might suggest an additional source of benefit to the government. The mere existence of an additional physician in the country, in the private or public sector, may be of value to the country. It may reduce the level of medical services that the government must provide in order to meet the population's minimal medical needs. This benefit may be measured by the savings to the country of not having to import an equivalent physician from abroad. Eowever, an alternative hypothesis is that the government's objective function may not be served by additional doctors in the private sector, since this may lead only to an increase in the consumption of medi- cal services (arising from the lowered cost of care) by the upper income groups, without any expansion in the care available to lower income groups. This argument obviously requires specific assumptions on the income dis- tributional weights of the government's objective function. The choice among interpretations is quantitatively important, since it implies the difference between an amortization period of 5 to 7 years (which we can assutie is the a-verage length of government services by new graduate physicians) relative to 30 to 35 years; the gross amorti- zation cost per annum will be M $8,600 to M $12,000 and M $1,800, respec- tively, under the alternative assumptions. For paramedical manpower, there is a far lower probability of rapid departure from the public sector, and one can assume an amortization period of 15 to 20 years, or an annual amortization cost of $450 to $600 per annum. The foregone return to capital would not be dependent on this choice of objective function. The government would have realized an alternative stream of earnings over a period equivalent to the average life of a capi- tal asset in the private sector (20 years). If we assume an opportunity cost of 10 per cent on the capital investment, this would imply approxi- mately $6,000 per annum as the foregone capital return due to the invest- ment'in training a physician. For paramedical manpower, the foregone capital earnings are far lower--approximately $500 to $800 per annum. The benefits to the government from training this manpower would need to be subtracted from this capital cost to obtain the net cost of training. In the case of medical manpower, this includes (i) the net savings in salary costs to the government due to the compulsory two years -56- of service required of the physician in the government sector. The gov- ernment's starting salary of approximately N $12,600 is approximately M $12,000 less than the cost of hiring a comparable physician in the private market (domestic or international). Moreover, during the year in which the new graduate physician serves as a "houseman" (or intern), the salary cost of M $7,800 is again lower than the cost of comparable services on the free labor market, and a further savings of M $6,000 can be assumed.1 The net savings to the government will fall after the first two years, as the physician's salary rises. Consequently, the savings will be only M $3,000 to M $5,000 in the subsequent years and M $2,000 there- after. If we assume that the average new graduate will serve in the government 5 to 7 years, this would yield a net salary savings to the government of approximately M $42,000 or M $8,400 to M $6,000 per annum. The saving in salary costs in the case of paramedical personnel is more negligible. A second narrow financial benefit is the increase in the income tax revenues accruing to the government over the productive life of the new manpower. Using estimates of the marginal tax rates of different in- come brackets in Malaysia,2 and assuming that a medical graduate has an average annual income of M $20,000 relative to an income of M $10,000 in the absence of the medical degree, the net increase in tax liability would be approximately $2,800 per annum over his productive lifetime. The marginal increase in annual income caused by the training of a paramedical personnel is probably no more than M $4,000. The change in marginal tax brackets would not be significant. This would suggest an additional M $620 (applying a marginal tax. rate of 15.5 per cent). The increased tax burden of paramedical manpower is probably sufficient to compensate the government for its foregone return on capital. A broader view of the return from the investment would include one additional benefit. It can be assumed that the physician, whether in

1We will assume that these savings are realized by a higher level of current consumption in the period in which they are realized.

2Charles E. McLure, Jr., "The Incidence of Taxation in West Malaysia," Malayan Economic Review, Vol. XVII, no. 2 (October, 1972). -57- the -orivate or public sector, is not fully recouping all the consumer's surplus produced by his services, and to the extent that the government has a broadly defined objective function, this would also be a return to the government. Two principal conclusions emerge from this analytical exercise. For paramedical manpower, our cost estimates would not be significantly changed by imputing a value to the government's investment in training. The foregone return on capital appears almost wholly offset by the in- creased tax burdens over the working life of the staff. The amortization cost is less than 10 per cent of the annual salary assumed for paramedical staff. For physicians, let us assume the narrow interpretation suggested above. If graduate physicians serve an average of 5 years in the public service, the net cost (or the amortization cost less the net salary sav- ings) would be approximately M $3,600 per annum; for 7 years, it would fall to M $2,600 per annum. In addition, one would have a net foregone capital cost of approximately M $3,200 per annum during the entire produc- tive life of the physician, although we have excluded consideration of the consumer surplus return to the marginal physician. This would raise the cost of a physician by a third to a half over our present salary estimate of M $17,100 per annum, during the initial 7 years. If we took the broader view of the government's objective function, and assumed an amortization period of 30 years, then the net salary saving (totalling M $42,000) would be concentrated in the earlier periods, where- as the low annual amortization cost of M $1,800 would be spread over the longer period. It is probable that if we assumed any reasonable social time preference rate, the ultimate cost would be negligible. Clearly, in those cases where the student self-finances a large share of his tuition by borrowing, the cost to the government is even lower. We have chosen not to incorporate estimates of the imputed cost of training in our estimates of the service cost of different medical and health services. 'Using the most narrow interpretation, it is likely that the imputation would have its largest effect in the cost of hospital-tied inpatient and outpatient services. In the rural health system, the

1Foregone capital return less increase in tax revenues received. -58-

doctor's role is not significant for the large majority of maternal-child health or general outpatient cases.

V APPLICATIONS OF COST-ESTIMATES: THE INCIDENCE, DENSITY, AND TECHNOLOGY OF HEALTH EXPENDITURE IN MALAYSIA inpluts The cost-estimates developed in section IV may be used as to an analysis of the technology, incidence and density of health spending. In this section, we shall briefly (1) estimate the incidence of hospital on inpatient expenditure, (2) calculate the density of health expenditure a district level for Peninsular Malaysia, and (3) examine some of the process. technological characteristics of the health sector's production

A. The Density of Health Services and Expenditure in Peninsular Malaysia on By combining the cost estimates of this study with statistics Health, the infrastructure of health facilities provided by the Ministry of pos- a partial picture of the expenditure density in the health sector is and sible. It is partial, in that it excludes expenditure on the central pro- state health administration, on non-institutional environmental health we do grams, training, and specialty hospitals. It is approximate since not know the actual level of spending in each of the medical and health units of the country. In table 13, we have indicated the quantity and where possible, of capacity, of the following medical and health institutions within each the 77 health districts: (1) general hospitals, (2) district hospitals, (3) main health centers, (4) sub-health centers, (5) midwife clinic-cum- and quarters, (6) dental clinics, and (7) urban-based static dispensaries sys- maternal-child lhealth centers. As is normal for any medical referral tem, the density of institutions (3) to (7) is much greater than the urban- easily based hospitals. The institutional density of these services can be calculated on a district-basis for most cases. For some of the districts, we could directly calculate the expendi- 12 we ture level from our earlier cost estimates. From tables 4 through in each shall assume the following estimates of the recurrent expenditure institution: TABLE 13 EUPENDITURE IN' PENINSULAR MALAYSIA. BY HEALTH DISTRICT., 1973 THE DISTRIBUTTON OF GOVERMENT HEALTH 1ANDMEDICAL INSTITU.TIIONS. ANU

Coot in 1'LDCO OF TOTAL lOSPTAL ALINHEALTIF SUB IHrkLTH iV MI DII FE OTHER OP-H.C11 DENTiAL ESTIMATES GE'ERA IISPIAT.DI-TRIT (s CLINICS COV'T EXPENDITURE GEEA IS1A. DSRC OPTL C 'oNr CENTI:L CLINICS C.I M4I Fstira. PER OIISTRICTga DISTRCT Estilrn. - Ti-Cu . TThtIt.c; Esi xTX T b7 Estint. STATE AND DISTRICT 5Hospitals Estim. iHospitals Cost Corst PPLTO (Beds) Cost (Beds). Cust Cost Cos t Cosit

PERI.IS5 TOTAL:. 45. TOTAL: 197 2 57 7 10- 2,04.9.200 Arau 1 (299) 1,88.3 1 100 1 50 11 6h, 2 31 247.000~ Sanglang 1 50 4 24 2 31 105.000 Perlis K. 1 511 4 241 1 15 89.500Ml9r B.-rserl 2 100 4. 24 2 31 1_55.0(10 Tinggi 30 1 15 Titi Or 50 5

KEf3AP!zh,o 489.130 23,~819 391 1 50 5 30 2 18 Pulau LangkaJIi 1 (85) 18,403 1 100 4 '200 15 90 1 10 5 45 445.325 Kubaxng Pasu 124 15 135 6,686.9753030 3,465 1 (550) 2,530 1 100 4 200 22 132 5 Kota Setar 1 (5150) 36 2 1s 154.130 542,372 Yn2 100 6 54 1,791.i9G 160,070 1 (324) 1,490 2 1qo 15 90 2 57 j6 Kuala Muds 54 1 9 113.065 360,307 50 9 3,5 PaiLanp Terp 2 1GQ 7 42 2 18 160.130 SLik 45 590.525 394,051 (72) 331 2 100f 19 114 5 2 Ii,41 88,429 3 150 16 96 1 47 7 63 1,340.855 Kii 1 (214) 984 332~10 1 100 1 50 7 4+2 1 10 1 9 211.0t,5 Bi:idar Bahru 11,984.000 PULAOu PINANG 11 10 17 334 6,893.000G- Geurgetown City Council 1 (1001) 6,549 372,200, 12 100 3 18 2 Q- 2 39 200.340 '..E. Penang Island 49 5b2.20560 0 1 (41) 283 1 100 1. 30 10 60 1 10 ~4 S.W. Perrang Island 2 1(10 20 120 11 5&, 5 98 1,9.2 ro.WlelyNrh113) 720 1 300 V67 117,714 1,055 1 .100 I ,0 II 14 5 9 Prov. Wellesley Central I (1.70) 111,053.809 633587 424 3 1 Pr*-. Weullesley South 1 (120) 3 IOC 12 100 14 8L4 I 1 1 1062 I 53,5363.7 PEP.AKPerak 1 (40) 18411 ;1O 206 3,024.b6606.3 1 (569) 2,617 2 0 4 1 47 L,trut 41164.524 2102 ca2 100 94 2 1 100 1 502 41 190.52422,9 Mlatang 4" .19361 1 (108) 496 1 IIDC 1 6681 I iFt-rian 186 2, 188,651 2 (314) 1,44.4 1 10G 5 2j4. !~4 77 9 Vx~a1a Kangsar 17 j5 S,b87,000 4882,9601 (430) 2,070 1 110 3 1." 54' 1 10 1-Inta 1 (99-5) 6,268 2 7 144 1,V9.52 2818 1 (162) 745 Is 250 U 90 DlnJ2ings 9 186 -2,076.2341810 2 (321) 1,476 2 '0' 2 100 19 114 Bating Padang 47 12 248 2,4'24.112 121,277 1 (346) 1,591 2 20C 4 200 23 138 1 Pillir Perak 21,381.3q621,4 C'~~ J/IR 196 1, 1 (170) 594 2 f72 1' 19 ~:2,t 2,1074 4 34 741 F2.~. Lumpur 1 (2100) 17,821 5 109 1,34 48 ~ 876,373 (230) 917 1 "Y- 4 1 37 I1 i~ ',t 5 09 .-. 96,157, ~ 8trna ' 1 . 9 '1 1 10 4 87 135,59877,99 Inz 1(75) 64.9 1 - .. 7 '53 J 3' (450) 3,105 ',I3 9L4 V1 . -Z , , C,jst in ~.:000 1N. 1 MAIN HEFALTHISUB HEALT11 MIDI Olil P1CIDNA SI19'SO OA MIDW OCL O-C DNAL ETMAE F OA cIEA TOPEAC EAL'SPTLC;:NT1IRs DISTRICT IIOSPIT'ALIC,TR C3TRS CINICS CLINICS CLINI1CS G±' EPNDITURE DISTRICT Estim. PER DISTRICT POPULATION STT N #tospitals H!;RCHositasEstim. . stim , Estimn.jEstim.1U Estim. IF Cost NRI E2IL (Beds) Cost (Beds) Cos Cost Cost i Cost Cost

13 292 9,050.467 168,948 Seremban 1 (1345) 8,473 (5)3 150 13 78 2 57 67 705.779 32,868 Jlelebu 1 (99) 455 2 100 6 36 1 47 3 3 67 922.177 76,244 P'ortDickson 1 15) 7 1 50 9 54 1 47 270 2,474.108 115,434 K~uala PUlah i (366) 1,684 1 M0 5 25 19 114 2 57 12 4 90 938.836 48,156 Tampin 1 (135) 621 3 150 13 78 2 45 V%Y0q18 39,841 Renrbau 1 IOU 1i s 8 48 MELAKA 114,334.29 163 1,225.120 114,523 Me'laka Utaira 1 (120) 5921- 1 100 5 2.50 25 150 1 10 10 57 15 245 6,162.980 204,808 MQlaka Tengab. 1 (911) 5,739 I1 50 12 72 2 7 114 .1c3318~13 84,804 Me I nka Scla,tan I 100 5 250 19 114 2 57 JOFOLI I8,023.284 127,579 Swsa (244) 8419 3 390 19 114 2 57 5 84 1,253.610 2 (559) 2,413 1 lOt) 8 400 92 312 2 57 17 285 3,507.232 279,161 i12 201 1,816.408 250,000 F.atuPahiat 1 (210) 91n I 2 200) 4 21)0 32 192 2 57 1,843.656 134,650 Keluang L (326) 1,500 2 100 6 36 2 57 9 151 57 134 1,202.292 117,729 Pe atcian 1 (135) 621 1 100 4 200 19 90 2 8 19 319 106946271,929 Johor Bahru 1 (1201) 6,063 5 250 24 144 2 57 67 i,020.136 61,551 Ko'ta'f1nggi 1 (165) 759 1 1(10 I1 50 4 24 2 20 4 5 84 591.020 34,057 M,.'rsinti1 (10(1) 327 3 150 5 30 NEG~ PAIANO21,973.820 1,052.422 70,270 Ickn1 (129) 593 1 100 j3 50 30 18(1 3 ~3U 7 99 141 1,597.934 119,747 'rverlh1 (200) 771 1 1(11 7 350 34 204 1 31 ~10 1 (192) 881 1 100 2 100 13 75 4 57 1,217.784 56,820 Petntong 1,126.476 57,548 Rau. (191) 699 1 1(11 100 15 90 2 57 6 85 1 14 94.146 16,022 fa-cr,rn I1Iigh lands 1 5 5 30 fi6 1 42 . 3 42 1,115.866 50,811 KZuala I.LvIs 1 (202) 866 2 1(10 11 3 42 364.438 36,900 Jv'rantIt. I 1 1o( 3 150 12 72 99 96,883 Ru lt!tan I 1 (368) 2,465 1 10(1 3 150 12 72 7 I2,8P86.022 9,455.088 TR,F1EC.ANU 5 69 808.950 44,903 Kaman.iin 1 (114) 524 1 10(1 I 50 11 66 1 (96) 442 2 *100 8 48 1 54 5 69 712.266 54,469 4 55 32b.840 33,694 Ulu Trcngranu 1 100 I2 100 12 72 10 137 2,482.192 173,534 Kuiala Treng~ganu 1 (306) 1,928 1 100 3 150 13 78 1 89 1 14 93.910 19,695 'larang 1 50 5 30 16 100 793.060 79,244 flequt 1 (78) 359 1 111 3 150 14 84 KELAX.\K 15,217.218

5 1754.098 61,809 UtIu Klaentan (75) 406 1 100 2 100 S 30 1 47 I1. 2 28 220.368 51,636 Mach:anz I to10 1 50 7 42 3 43 190.552 57,925 Tan.:i M,'rah 2 100 8 48a 4 57 266.736 62,182 Bachock 3 (50 11 6 4 57 316.736 71,138 Vasir Putc~h 1 100 2) (00 lo10 0 4 57 I 310.736 100,689 Pasir Mas I 100 i 2 100 9 54. !I1 156 4,930.119 207,837 Kota Bharu 1 (789) 4,400 1 100 3 150 13 78 1 47 5 7 726,247,05 Tuampa t 3 150 6 lb TOTAL: i11 MS65,054 46 41,086 48 4800 198 9900 978 5868 81 22 9 24 107,26,245

Aincludes government health administration costs. -61-

(1) Per general hospital bed: M 06,3Q0 per annum (2) Per district hospital bed: M $4,600 per annum (3) Per main-health center: M $100,00Q per annum (4) Per sub-health center: M $5Q,000 per annum (5) Per static dispensary: M $10,000 per annum (6) Per matern4l-child health center: M $47,000 per annum (7) Ppr dental clinic N $9,065 to M $22,950 per annum (8) Per midwgife clinic N $6,0QO Per annum The total expenditure ip any district is indicated in table 14, Two measures are of interest. Hospital expenditure per capita shows a wide variance, even if one excludes thpse districts which include the gen- eral hospital of a region. The latter districts obviously have higheT levels of expenditure per capita, This variance can be a misleading indi- cator of the variance in the incidence qf hospital expenditure, since many hospitals are intended to serve more than the4r own district's popultion. Given the structuro of the primary care system, a clearer measure of equity i.n inter-district spending is the health center expenditure per capita, The density of the clinic infrastructure is sufficient to yield a low vari- ance i n per capita spending by this measure,

B. The Incidence of Hospital Inpatient Expenditure

Our cost estimates in table 4 may alsQ be applied to an analysis of the incidence of health expenditure, The World Bank household survey in W. Malaysia should yield estimates of the relative cqnsumption levels of any health or medical activity by different income groups, iural and urban. Our estim4tes allow a valuation of this consumption in terms of the cost of production. An alternative type of incidence analysis is to survey consumers at the source of service. In a separate paper, we have described a survey undertaken by the author of the socio-economic charac- teristics of inpatient admissions in seventeen hospitals in eight regions of Malaysia. In this part we shall briefly apply the survey results to distribute our estimates of the cost of inpatient expenditure across

1Peter Heller, "The Incidence of Hospital Inpatient Expenditure in Peninsular Malaysia" (unpublished). -62- Table 14.

THE DENSITY OF HOSPITAL AND HEALTH CENTER EXPENDITURE PER .CAPITA BY HEALTH DISTRICT, 1973

Total Cost Hospital Costt- Rural Clinic/Center CostC/ State/District Total Population opulation Population

7.G/ 22.65 PERLIS 15.56 3.69 KEDAH 4.11 20.53 Pulau Langkawi 16.41 3.75 3.76 Kubang Pasu 0 2.28 13.74 Kota Setar* 11.46 2.80 2.80 Yen 0 1.88 11.19 Kuala Muda 9.30 3.71 3.72 Pedang Terap 0 4.09 4.10 Sik 0 2.49 5.67 Baling 3.18 4.03 15.16 Kulim 11.12 6.35 6.35 Bandor Bahru -- 3.99 PUIAU PINANG Georgetown City Council* 0.53 18.13 & N.E. Penang Island 17.59 4.97 9.67 S.W. Penang Island 4.70 2.94 7.40 Province Wellesley North 4.46 3.55 12.52 Province Wellesley Central 8.96 4.49 11.16 Province Wellesley So.th 6.66 3.50 PERAK 4.09 8.63 Ulu Perak. 4.54 2.99 15.28 Larut/Selama/Matang 12.28 1.28 4.35 Kerian 3.07 3.48 11.66 Kuala Kangsor 8.18 .71 17.97 Kinta* 17.26 3.78 9.59 Dindings 5.81 4.94 17.11 Batang Padang - 12.17 3.95 11.49 Hilir Perak 7.54 4.49 SELANGOR 4.99 12.65 Ulu Sea ngor 7.65 9.09 29.43 Kuala Lumpur* 20.33 4.47 14.01 Ulu Langat 9.53 6.08 6.08 Sabak Bernram 0 3.40 8.19 Kuala Selangor 4.78 2.10 15.39 Kelang 13.28 5.89 5.89 Kuala Langat 0 6.00 NEGRI SEMBILAN 3.41 53.56 Seremban* 50.15 7.62 21.47 Jelebu 13.84 2.86 12.09 Port Dickson 9.23 6.84 21.43 Kuala Pilah 14.58 6.60 19.49 Tampin 12.89 6.09 6.09 Rembar 0.00 KELAKA -63- 6.67 Melaka Utara 4.81 5.87 10.69 Melaka Tengah* 28.02 2.C 30.09 Melaka Selatan 0 7.48 7.49

JOHORE 4.31 Segamat 6.65 3.17 9.82 Muar 8.64 4.13 12.77 Batu Pahat 3.86 3.40 7.26 Keluang 11.30 2.55 13.69 Pontian 5,27 4.93 10.21 Johore Bahru* 22.29 16.97 39.27 Kota Tinggi 12,33 4.24 16.57 Mersing 9.60 7.75 17.35

NEGRI PAHANG 6.77 Pekan 8.43 6.53 14.97 Temerloh 6I.41 6.90 13.34 Bentong 15.54 5.89 21.43 Raub 11.99 7.44 19.43 Cameron Highlands 0 5.86 5.87 Kuala Lipis 17.04 4.91 21.96 Jerantit 0 9.86 9.87 Kuantan* 25.44 4.34 29.78

TRENGGANU 6.24 kamamaan 11.66 6.34 18.01 Dungun 8.11 4.96 13.07 UlU Trengganu 0 9.70 9.70 Kuala Trengganu 11.11 3.19 14.30 Marang 0 4.77 4.76 Besut 4,53 5.47 10.00

KELANTAN 4.71 Ulu Kelantan 6.56 5.63 12.20 Machang 0 4.26 4.26 Te.nah Merah 0 3.29 3.28 Bachok 0 4.39 4.28 Pasir Puteh 0 4.45 4.45 Pasir Kas 0 3.08 3,08 Kcta Bharu* 21.17 2.55 23.72 Tutmpat 0 3.51 3.51

Diistrict Mean 6.04E' 5.22 District Standard Deviation 5.25 2,46

*DA,stri&t with General Hospital.

qxcludes districts containing a General Hospital.

Hospitals -CThis was calculated from Table 13 by summing the estimated cost of General and District Hospitals in any state.

C/This was calculated from Table 13 by suiming the estimated cost of Main and Sub-Health Centers, Midwife Clinics, other outpatient-MCH clinics, and dental clinics. -64- income groups in urban and rural areas. Our methodology is fairly primitive. For nine of the hospitals surveyed, a direct estimate of the level of recurrent inpatient expendi- ture was available. If we assume that the quantity of services consumed is independent of the patient's income bracket or location, we may appor- tion this expenditure by the fraction of patients from each monthly per capita household income bracket (table 15). Since we can also estimate the total user cost of capital for each hospital, a similar breakdown may be obtained 'table 16). A more useful measure of incidence may be obtained by further stretching the applicability of the survey results. By making several strong assumptions on (1) the representativeness of the survey data in any region for all the hospitals in that region, and (2) the accuracy of our previous cost estimates, we can distribute total public hospital in- patient expenditure in eight regions, by income bracket and urban-rural location (table 17).l The results suggest that 52.2 per cent of expenditure is consumed by inpatients from the rural areas. Of these rural patients, 26.3 per cent are from the monthly per capita household income bracket of less than M $25, or the cutoff bracket for those in poverty in Western Malaysia. From Anand's study, this suggests an underrepresentation of the rural poor, since they constitute 45.1 per cent of rural households. Of the remain- ing urban households, the percentage in the poverty group is lower, 15 per cent, and this is closer to the percentage of the poor inthe total urban population. A complete characterization of the incidence of inpatient

'The following methodological assumptions were required. (1) Where we had survey data on a hospital in a region, the urban-rural and income distributional breakdown were directly applied; (2) in the absence of survey data, (a) the survey results of district hopsitals in a given re- gion were generally applied to all other hospitals in the same region; (3) where survey data existed for more than one district hospital, the survey results were averaged; (4) from table 4, row 2, we assumed that 81.8 and 75.8 per cent of total hospital recurrent expenditure in general and district hospitals, respectively, could be allocated to inpatient ac- tivities, unless we had direct expenditure estimates to the contrary for a given hospital; (5) we applied the estimates of total hospital expendi- ture from table 4.

S. Anand, The Size Distribution of Income in Malaysia (unpub- lished draft, IBRD, Washington, D.C., December 30, 1973). TABLE 15

DISTRIBUTION OF RECURRENT ROSPITAL INPATIENT EXPENDITURE ACROSS INCOME BRACKETS OF RURAL AND URBAN INPATIENT HO!USEHOLDS IN SELECTED HOSPITALS: 1974

Expenditure b spital Kota Bharu Kuala Lumpur Kwantan Johore Bharu K. Krai ientakab TjgKarang Segamat Penang Income Bracket G.H. G.H. G.H. G.H. D.H. D.HE. D.H. D.H. G.H. Percentage of Patients 15.6X 82.2% 67.2% 63.Z% 17.6% 21.7% 45.9% 60.4% 80.1% From Urban Areas Recurrent Expenditure on Urban Patients with Monthly Household Per Capita Income Bracket <25 38,461 1,157,143 116,766 76,525 --- 69,622 30,932 81,942 925,248 26-50 114,809 2,667,519 309,986 998,026 4,077 34,811 9Z,058 122,913 1,772,769 51-75 76,348 1,778,346 308,596 921,500 4,077 --- 30,686 54,756 460,672 76-100 76,348 1,510,376 115,376 424,081 4,077 ------30,686 4j,971 230,381 101-200 191,732 2,302,105 462,894 615,396 32,767 34,811 46,152 40,971 308,477 13,785 156,191 201-300 ------1,680,903 77,844 76,525 4,077 - 301-400 38,461 438,496 ------76y525 ------401-500 38,461 353,233 ------15,465 13,785 ------501 > - -- 267,970 ------13,785 ------Total Recurrent Expenditure 574,048 12,180,453 1,390,072 3,188,581 49,126 139,245 245,489 38:2,908 3,853,738 On Urban Inpatients Percentage of Patients 84.4% 17.8% 32.8% 36,8% 822.4% 78-.3% 54.1% 39.6% 19.9% From Rural Areas Recurrent Expenditure on Rural Patients with Monthly Household Per Capita Income Bracket <25 1,223,664 801,835 285,643 35,989 29,210 88,428 72,337 52,970 388,04.0 26-50 1,006,261 572,362 178,442 969,167 104,650 177,360 173,608 79,330 426,844 51-75 596,303 458,945 107,201 503,150 33,350 118,072 14,467 26,360 77,608 76-100 ------229,473 ------154,101 33,350 88,429 ------26,360 -_ - 101-200 130,441 342,890 71,241 77,979 20,930 29,643 28,935 39,665 201-200 86,961 229,473 115,112 8,280 - 26,360 ------301-400 43,480 - 34, 603 ------401-500 ------.------

Total .urrent Expenditure 3,105,745 2,637,616 678,488 1,856,642 230,001 5f,12435 289,346 251,045 970,101 on Urban Inpatients Total Recurrent 3,679,793 14,818,969 2,068,560 5,0'45,223 279,127 6,41,6.80 534,835 633,953 4,874,849- Inpatient Expenditure 3 1 2 TABLE 16

OF RURAL AND URBAN INPATIENT HOUSEHOLDS IN SELECTED HOSPITALS: 1974 DISTRIBUTION OF CAPITAL HOSPITAL INPATIENT EXPENDITURE ACROSS INCOME BRACKETS

1.

K. Krai Mentakab TigKarang Segamat Penang by Hospital Kota Bharu Kuala Lumpur Kwantan Johore Bharu Expenditure G.H. D.H. D.H. D.H. D.H. G.H. Income Bracket G.H. G.H. G.H. 17.6% 21.7% 45.9% 60.4% 80.1% Percentage of Patients 15.6% 82.2% 67.2% 63.2% From Urban Areas Capital Expenditure on Urban Patients with Monthly Household -- 83,609.0 22,479.9 138,534.9 88,329.2 Per Capita Income Bracket 40,077.1 663,963.8 79,735.6 78,365 1,629,427.1 211,679.0 1.022,523 4,057.8 41,800.6 66,907.3 207,807.7 26-50 119,617.7 1,528,348.9 22,301.1 92,574.6 439,756.4 79,540.6 1,018,899.2 210,729.8 944,106 4,057.8 ------4,057.8 ------22,301.1 69,262.1 219,501.5 51-75 79,540.6 865,400.4 78,786.4 434,473 630,490 32,626.4 41,800.6 33,543.6 69,262.1 294,458.6 76-100 i99,810.3 1,319,107.4 316,094.7 149,114.2 53,157.0 78,365 4,057.8 ------23,301.7 101-200 ---- - 963,107.4 ------201-300 40,084.0 251,245.1 ------78,365 ------202,392.08 ------11,238.0 23,201.7 301-400 40,084.0 ------2 20 7-- - - - 401-500-- - - -15 53 8 ------_____--__ 501 > 48,913 167,233 178,420 647,389 3,679,127 Total Capital Expenditure 598,820 6,979,036 949,233 3,266,947 On Urban Innatients 82.4% 78.3% 54.1% 39.6% 19.9% Percer.tage of Patients 84.4% 17.8% 32.8% 36.8% From Rural Areas Capital Expenditure on Rural Patients with Monthly Household Per Capita income Bracket 52,575.0 88,715.9 370,458.4 1,275,295.8 459,427.5 195,055.9 39,906 29,082 106,197 <25 126,180.1 134,118.9 407,504.2 1,048,716.3 327,946.3 121,852.0 992,956 104,199 213,003 26-50 10,511.1 44,566.9 74,091.7 621,444.5 262,961.8 73,203.4 515,475 33,204 141,802 51-75 ------44,566.9 131,481.2 ------157,868 33,204 106,197 76-100 ------67,054.1 74,091.7 196,465.7 48,648.0 79,865 20,839 35,597 21,030.0 101-200 135,917.2 ------44,566.9 ------90,624.1 131,481.2 ------117,909 8,244 ------201-300 ------301-400 45,292.9 ------23,629.2 ------401-500 ------501 >------424,436 926,146 1,511,275 463,316 1,902,221 229,016 603419 210,300 Total Capital Expenditure 3,236,811 I On Rural Inpatients 388,725 1,071,837 4,654,000 Total Inpatient 3,835,130 8,490,827 1,412,550 5,189,221 277,932 770,661 Table 17

Distribution of Total State Recurreent Hospital Uapatient Expenditure Across Per Capita Household Brackets for 8 States -of W. O4alaysia 197 3-197 4 (in 1000 Malaysian dollars)

Total Expenditure Total Expend- Population Relantan Selangor Pahang Johore Negri Sembila Trengganu Penang 'edah on Urban (Rural) iture on All Inconme Inpatients in Inpatients In Distribution these 8 Region these 8 Regions Expenditure by Income Bracket

'on Urban Recurrent Expenditure URBAN AREAS Patients with Monthly House- hold Per Capita Income Bracket 4525.2 (15.0) 13201.6 (20.9) 39.00 38.5 1394.8 434.2 520.0 821.7 153.9 1046.5 115.7 <25 9065.5 (30.0) 21995.5 (34.8) 37.00 118.9 3374.9 468.1 2053.5 410.8 171.7 2005.1 462.6 26-50 4339.7 (14.4) 10192.9 (16.1) 13.40 80.4 2014.1 308.6 1358.3 57.2 5.21.1 -- 51-75 3072.6 (10.2) 5209.0 ( 8.2) 5.30 80.4 1746.1 115.4 599.3 39.4 260.6 231.3 76-100 5077.8 (16.8) 7214.2 (11.4) 4.00 224.5 2656.7 621.1 994.6 116.4 348.9 115.7 101-200 2507.2 (08.3) 4989.2 C 7-9) .60 4.1 1680.9 77.8 215.2 101.0 135.*9 176.7 115.7 201-300 579.1 ( 1.9) 804.9 t 1.3) -50 38.5 438.5 -- 102.1 -- 301-400 15.7 680.6 ( 2.3) 732.9 1.2)1 .20 38.5 472.1 -- 54.4 - 401-500 342.1 ( 1.1) 394.4 C 0.6) .03 - 268.0 -- 54.4 19.7 >501 645.0 4358.8 1156.5 30177.2 (100.0) 63143.3 (100.0) 100.00 Tctal Recurrent Expend.- 623.2 14066.7 2025.0 5955.0 1347.0 cn Urban Inpatients 23.8 24.0 10.0 15.0 Percent. of Urban Patients 6.2 9.9 21.4 8.7 60.9 in <25 Bracket Percent of Ujrban Popula- 30.6 18:2 19.7 17.4 tion in <25 Bracket-/ 43.6 10.2 7.0 17.1 15.3

on Rural Recurrent Expenditure RURAL AREAS Patients with Monthly House- hold Per Capita income Bracket 8676.4 (26.3) 1252.9 1338.6 681.8 409.7 1362.9 800.3 935.8 1894.4 <25 12930.1 (39.2) 1110.9 1860.6 973.0 2360.7 3452.3 564.5 1029.4 1578.7 26-50 (17.8) 566.3 636.2 1161.1 2212.6 231.6 309-2 106.6 5853.2 51-75 629.7 2136.4 ( 6-5) 33.4 229.5 396.2 360.5 701.9 49.6 49.6 315.7 76-100 2481.9 77.5) 151.4 557.6 204.0 398.4 402.3 240.8 318.4 209.1 101-200 901.9 ( 2.7) 95.2 229.5 -- 98.0 90.3 24.9 24.9 201-300 24.9 225.8 ( 6.9) 43.5 -- 34.6 52.4 -- 24.9 301-400 52.4 C 1.6) - - - 52.4 ------401-500 52.4 ( 1.6) >501 - -- -- 1937.2 2339.5 4100.5 32966.1 (100.0) Total Recurrent Expend.- 3335.7 4784.6 2929.5 5329.1 8210.0 on Rural Inpatients Percent. of Rural Patients 16.6 41.3 40.0 46.2 26.3 in <25 Bracket 37.6 27.9 22.9 7.7 Percent. of Rural Popula- 35.0 61.2 40.4 53.3 45.1 tion in <25 Bracketa! 68.6 27.5 37.2 38.6

Total Recurrent Expenditures 9557.0 2582.2 6698.3 5257.6 on All Patients 3958.9 18851.3 4954.0 11284.1 Percent. of All Patients 22.9 36.9 29.6 38.2 in <25 Bracket 32.6 14.5 22.5 8.2 Percent. of Population in 1 32.1 54.6 29.7 48.6 <25 Bracket 65.2- 19.1 30.7 32.9

draft, I.B.R.D., Washington, D.C., Dec. 30, 1973) ,'frcm Subir Anand, The Size Distribution of Income in Malaya (unpublished -68- expenditure is obtained by summing up the expenditure for the urban and rural groups. From the last two columns of table 17, the poor are clearly underrepresented. Only 20.9 per cent of hospital inpatients are from households in the poverty bracket compared to 39 per cent for the entire population. Households in the two brackets from M $26 to M $75 are pro- portionally represented (50.9 per cent of patients, 50.34 per cent of the households in the total population). The principal groups overutilizing the hospital inpatient services, relative to their share in the popula- tion, are the upper income groups, particularly households in the bracket of more than M $100. Of inpatients, 22.4 per cent are from this group, compared to only 5.32 per cent of all households. There is some bias in these results. Our sample was taken in mid-1974, whereas the population income distribution data is from the post-Enumeration survey of 1970. If incomes have risen since then, there will be a smaller number of the population in the poverty bracket and this would explain some of the underrepresentation of the lowest income groups in our hospital inpatient survey. However, if we take the three lowest brackets (with monthly per capita household income less than M $75), only 71.8 per cent of inpatient population are from these brackets relative to 89.35 per cent of the population. The underrepresentation remains. An- other bias is that Anand's income distribution data relates to the popula- tion of Western Malaysia, whereas ours include only 8 of the 11 states in Western Malaysia. The latter bias is avoided if we compare our survey results with Anand's estimates on a state basis. Our survey suggests that the poor are underrepresented in the regions of Kelantan, Johore, Negri Sembilan, Pahang, Trengganee and Kedah. Only in the relatively urbanized regions of Selangor and Penang is there adequate representation. This suggests that the degree of urbanization, which may merely be a proxy of accessibility, is a key variable determining consumption of hospital inpatient services.

C. Measures of the Technology of Production in the Health Sector

From our earlier cost estimates, it is possible to calculate several crude benchmark measures of the technology of production in health and medical institutions. One measure useful for aggregate sectoral -69- plann-ing is the ratIo of the annual recurrent expenditure required for operating an institution to the total capital expefidi'tu're req'uited to con- struct and- equip it. This measure indicates the annual recurrent expendi- ture burden engendered- by a dollar of capital spend'ing--a bur'dein avoided only at the cost of low productivity., undermnaintained ptojects. The tatio is highest for the smaller health center institutions: .23 to .27 rela- tive to .11 to .18 for hospitals. These results are reasonably consistent with results found for the health sector of Kenya (table 18)'. Alternative measures of the capital intensity of prodiuction ate indicated- in.rows (3) thTough (5) of table 18. The first measute (K/Li, uses as an: estimate of L, the number of inskilled laborers that could have been, putchased with the' total staff expenditure of eaach holpital in, our sample.2 In all measures, we have used our earlier assutptions on the capital cost per bed or per center. As would'be expected, hbspitals are twice as capital intensive by this measure: more surprising, general' hospitals prove less capital intensive than district hospitals. This re- sult is partially a consequence of our assumption of an equal capital cost of $40,000 per bed in all: hospitals, but thiAs latter ass mption' is stipportEd by the minimal data available (see Appendix B). Finally, for the health centers, we could estimate the number of personnel actually working in each health center, L. Let us assume that the difference between the actual staff expenditure of a health center and' the amount that would be paid if all personnel were unskilled workers, measures the annual return to investment in unskilled labor. By-adding this to the user cost of phvsical capital, we obtain a measure of the total rental value of capital, human and physical, in the center. Dividing by L, we obtain the rental value of capital per unskil'Td worker. This may be compared with the user cost of'physical capital per equivalent' unskilled laborer obtained in row 5 (equallihg(K/L)1 x .14) . The greatrhtr human' capi- tal embodied in the operations of the main h'ealth center is much clearer from the former measure.

1 Peter S. Heller, The Dynamics of Project Expenditures and the Plan- ning Process with Reference to Kenya (unpub. dissertation, Harvard Univer- sity, 1971).

2Assum-ing the "health attendant" to be our unskilled labor type, total personal emoluments were divided by M $1,884, the annual salary of health attendants, to obtain L. -70-

Table 18

MEASURES OF TECHNOLOGY IN THE HEALTH SECTOR (in Malaysian dollars)

Medical and Health Institutions General District Main Health Sub-Health Technology Hospitals Hospitals Centers Centers Measure (1) The ratio of annual recurrent expenditure to total c4pital ex- 3 penditure_ .183 .111 .27-/ .23/

(2) The ratio of annual. recurrent staff ex- penditure to total capital expenditure. .114 .085 .196 .19

(3) The ratio of capital expenditure to full- time equivalent un- skilled laborei, (man- years) (KIL)1f'-' 19,405 24,490 8,200 9,935

(4) The ratio of user cost of capital, human and physical, to the number of personnel employed-/- n.a. n.a. 5,273 4078.9

(5) The ratio of the user cost of capital to full- 2716.7 3428.6 1148.0 1391.0 time equivalent unskilled labor. [(K/L)1 x .14] -/

For all technology measures, total beds was used as the weighting measure for hospitals; total expenditure, the weight for main and sub-health centers. -/These results are derived from only 2 observations each. is - The value of L is obtained from (Total personal emoluments)//M$1884. The divisor d/the annual salary of our unskilled labor type, the health attendant. -Assumes M$40,000 capital expenditure per district and general hospital bed; $400,000 /per main health center; $200,000 per sub-health center This is equivalent to: [total staff salary - (M$1884)(actual number of personnel)] + (.14)(capital expenditure) (actual number of personnel) APPENDICES

Appendix A. Statistical Tables on Malaysia's Socio-Economic, Demographic

and Health Status relative to Other Developing Countries

Appendix B. The Capital Costs of Medical Facilities

Appendix C.Illustrative Example of Methodology Used for the Costing of

the Outputs of Rural Health Services

Appendix D. List of Activities and Core Staffing of Main or Sub-Health Center -71-

APPENDIX A

Statistical Tables on Malaysia's Socio-Economic, Demographic

and Health Status relative to Other Developing Countries.

Table H-HEALTH ' ANPOVR 1AVA!LAByLT'1N 'RELATOIN TO LEVELS

Population per GNP per capita Population per nursing & mid- (Market prices) Physician wifery personnel Country 1970 1969 1969

Category I

Upper Volta 60 89,?490 4,4lo Afghanistan 80 20,450 22,120 Indonesia 80 27,560 la 5,740 /a Zaire "0 27,740 5,730 Nigeria 120 22,090 2,110

Category II

India 110 5,240 5,650 Thailand 200 8,410 2,360 Paraguay 260 1,610 lb l,8o0 lb Ghana 300 15,200 1,050 Guatemala 360 4,860 5,220 Brazil 420 c/ 1,950 3,080 Malaysia 400 - 4,100 1,243 Category III

Yugoslavia 650 1,050 710 Chile 720 2,440 4,330 Singapore 920 1,520 330 Venezuela 980 1,100 460

' 1967 C/1971 F/ 1968

Source: Annex Table 3.9 -72-

Table 2-A REDISTMMD WANT YJiRTAITY RATES FOR 20 COUNTRIES:

16-8, 194 I&58~, 25 19 63-6 and 1962-7-0

County 1638 1246-48 : 19 _I64

Gabon, African pop. 2292/ Mauritius 1553.1 1L8.4 69 5 59,3 63.7 1 Egypt 13 8 -7./ 122.,, 5 118*Q ll19. y9 Liberia 1.7 India 6/16 134 146 146 1)40. El Salvador 123.6 103,3 82.0 67.7 65ol Turkey 165. 7/ 153 8/ Malaya 148.6 9)4.5 76.8 56i7 0 Taiwan 1L 5,L 67,0 34.6 26,4 * 10/ Costa Rica 138.8 92.7 85.1 77.6 65.4 Mexico 129.9 102,6 77.3 67.7 6-7,9 Jamaica 126.2 89.5 57.2 52.2 35,7 Chile 242.9 155,8 120.1 111 0 875o51L/ Singapore 161.9 85,9 42,3 2709 20,3 Puerto Rico 12900 77.8 53.1 4-4,6 29,2 UOSOSoRo 184.0 8100 44.3 30.9 25.1 Israel (Jewish pop.) 61.5 32,6 33.4 27.5 23,2 England & Wales 56,3 39.1 23.1 21,1 18.0 Sweden 43.7 25.0 17,0 15lD4 11,7 United States 1,2 3207 26.4 25,2 20.3 Malaysia n.a. 92.0 75.5 56.8 38.5

i. 1960-61 estimate based on sample survey, 2, 1945-49o 3. Data from civil registers which are incomplete or of tinknown reliability. 4, 1969 only. 5. Data based on 1970 Population Growth Survey, 6, Datest 1936-40, 1946-509 1951-619 1963, 1963 (Iast'two are rural India). Source: Pocket Book of ?op, Stat Registrar General, India Census Contenary 1972. 7, Estimate basis unknovn, 8, Data based on 1967 Turkish D3mographic Survey, 9, West Malaysia onlyo 10, .1968-69, 11. 1969 only,

Source: United Nations, Population Bulletin no, 6, Table IVo.8 and Deo>phc-o ao usaesyD Table 19 Table ted from BSOf DeMography, Table 16-9). -73-

Table 3-A

Demographic Indicators

Crude Crude Percentage of Life Birth Death Pop. Under Country Expectancy Rate Rate Age 15

U.A.R. 43.0 15.0 43.0 50.7 Ivory Coast 50.0 25.0 43.0 43.5 Uganda 43.0 18.0 41.0 50.0 Iraq 48.0 15.0 45.0 52.6 Turkey 43.0 16.0 44.0 56.4 india 42.0 17.0 41.0 49.2 China 34.0 15.0 n.a. n.a. Costa Rica 45.0 8.0 48.0 68.2 Mexico 44.0 16.0 46.0 63.2 Brazil 39.0 11.0 43.0 61.4 U.S.A. 17.6 9.6 30.0 71.3 W. Germany 19.7 11.9 23.0 n.a. Malysia 32.6 6.8 44.3 64.0 Tunisia 41.0 13.9 54.1 -74-

TABLE 9-)

Breakcdown of Health Thadget

Public Total 7 Training Ex:penditure s ,g Public % Curative Care and Research Country Year in milll Health Prevention 555 7.5% Indira 1965-66 $236 37% 79,3 2 Colombia 1970 $203 18.7 83,,8 11 Kenya 1971 $ 27.8 5.2 ------(70.;)------Panama ±967 28.4 30 76,L Venezuela 1962 18 77 4.0 Chile 1959 6,;63.8 18.3 7)404 2.3 Ceylon 1957-58 p 344.3 23.3 81.1 4.7 Israel 1959-60 $ 82.7 14.3 80.3 4.4 Tanzania 1970-71 $ 19.5 4.9 61.15 6.03 Malaysia 1973 $84.2 27.6%

-W.H 0* Public Health Paper 170 SOURCES: Brian Abel-Smith, Paying for Health Services Health Eenditures, W.H,O. Brian Abel-Smith,, An International Stu of Public Health Pers 3 1965. Goverrment of India, Health Statistics of India, idia: Man ower p, 92. John Z. Bowers and Lor o grationofNedicaledinhec., Iran: po 11. &conomi; Growth of Colombia, Vo IX (IBRD), Colombia: dget 1971-72. Kenya: Mii m strji- nd D >velopment Vo S. Dept. of H.E,1, Panama: A.I.D. ynrisis: cs of Health,, in Tanzania", Tanzania,: Malcol ol "The Poliitics of Health 2Deeomentand ha.,e IV, No. 1 (1972-1973), pp. 37-50. | -l - A 15 Ri 8

4 g "Io .;.4. . . . S. . .|.. . .o. . * - . . . . -C

>01°'i °i f ie e -4 444oM

4..j * t 4 O4 40O * .4440 * V O ) U b R S 4 O o -0U 4 - * 00* 0 O * * * =. O 4444 * O 2 .n4 U V O S6 - R 4 L0V 5U 4 ° | 1 V 8 3

04 -71 0o 4 .0. 0 444 0 44 0404.4 4.04 44 .. 0 04 042..2 .Sv c.04 'a 5

0 05i Table 6-A Private/Public Consumption Expenditure on Health

Consumption Government Expenditure Expenditure/a on Health on Health as % of as % o:f Private Governmyent Total Private Total Govt. Expenditure Year Expenditure/a Co pon ture Pr Ca ta

Sierra Teaone 1968/69 1.2 8.0* ... 1.95 Thailand 1967 3.6 Philippines 1965 6.o 13.632.95 1.7 6.3.* 2.23 1.06 Jordan 1964 0.6 9+5 1.12 10.10 Colombia 1965 1.2 10.5* Zambia ... 2.04 1967 3.8 6.2 * t4alaysia 6.02 2.10 1966 2.4 9.0 * 3.91 7.18 Jamaica 1968 1.1 10.0 3.84 19.51 Panamua 1969 4.o 16.7 ** Cyprus 16.30 16.70 1967 2.2 5.4 9.50 Singapea 1968 1.63 1.8 7.2 * 8.85 14.19 Greece 1968 2.5 8.1 * 15.15 11.37 Spa4n 1967 3.2 ... 17.94 11*37

A 'From Appendix Table Three.

* Current government consumption only. Current and capital expenditure. Source: World Hsalth Organization, t Vol. 24 (1971) pp. 236- 246 (Except -or data from Appendix Table Three). TABLE,7-4

Medical, Paramedical and Au-xiliary Manpower Per 10,000 of Popullation Philippites Sri Lanka Malavsia (rural areas) Colombia Tunisia Bcilivia Chile Haiti KenLya Number India Manoower Cutegory in '1'969' 1969 1973 1971 1965,67 1969 1968 1968 1971 1967 1965 Medical Doctors 3,569 2.9 2.25 laO 4.5 ~ 3.4 2*9, 5 *8~.6,8 .95 2.13 Ayurvedic Practitioners. 19,186 15.6 Paramedical Perspnnkel 1. Professional a) Nurses 5,521, 4.5 5,06 .448 .82 5.22 .847 .581 1.09 b) Dental Nurses 236 .2 1.0.-1 c) Midwives 3,349 2.7 Tl. 2nd .637 .38-. .31- 1.25 d) Dentists 275 .2 .68. 2.1 ~ 092 1.5 3.-3 .21 .04., .12 e) Pharmacists 248 .2 .214 .8 .29 .22- .115 1.48 f) Labozatory 445 .4 Technician. 2. Auxiliaries a)Pub-lic Health. 1,042 .9 .538 Inspector .05 -b) Apothe.car±Les 82,3 .7 .07 c) Medical Assts. 1,226 1.0 .718 d) Nurse Att~endant. -5,9 3-3 4.8 2.98- 8.92, 6.95, .35~ 1.15, .23, Sources: Colombia: Economic Gro,ith of Colombia, Vol. IX (IBRD). Sri Lanl~a: InternatiLonal Labor Organf~Zat:on, Matching Employment Opportunities. and Expectations, Vol.I. Ken,ya: Development Plan for Kenya (Health Se'ctor) ,''1968/69-- 19731'74-;-(udVb1f9hed)...... Indila: Health Statisticg -of India, 1965. Hakiti, Philippines:-A.I:-D. Synfcrisis: -The.D)ynamics of Health, Vol, IV-., VI. Tunisia: 'Annuaire Statistigu'e, 1%)9.-- Bolivia, Chile: 'Syncrisis:-The Dvnamics of Health, Vol. II.- Malaysia: Unpublished statistics of the llihistry of Health. -78-

I r: i )l( It i 'II i.lo( ic Ii 11. oc) t or. I'wl i ''- v.on - .& JIibIl ic S c.tut o :

NUI:!berl *1 PopudLt i.Oitl Medical Tt) tal '7i.Total PrivaLtL bl'kdical Year Doctors PubI ic 1Pr ivat e Doctors

C(l)om ;b i a 1969 8,100 547% 46% 5,500

Kny; 1.967 708 38%, 62% 25,070

;i 1969 507 59%/. 31% 38,280

nI'silli a 1971 793 65% 35%X 16,891

Morocco 197' 1l,100 55% 45% 4,000

Malaysia 1973 1,938 57.2% 42.8% 11,207

Note: Colombia, MD's age 50= 66% in private practice. * 35= 75% in public sector.

Sources: Colonbiab Economic Growth of Colomrbia, Vol. IX. (IBRD). Kenya: Mark Wlheeler, "Medical Manpower in Kenya.", East Africian Medical Journal, V.ol. 46, YNo.2. Ghani: M. J. Sharpston, "Uneven Distribution of Medical Care: A Ghanaian Case Study," Journal of Develop-ment Studies. 'Tunisia: Heller, op. ceit.. (unpublished). Morocco: Robin Barlow, "Planning Public Health Expeftd.itures with Special Reference to Morocco". -79- TAB3L 9^i

lBeds. -Priva te /ubl ic

14unuber of C(InLry Year . Bedss Ih Puiblic Secto±_Cij In.-.Privat ecoL

Colo(nbiu 1966 46,735 12%

Hlunduras 1968 4,226 73% 27%

Kenya 1967 13, 679 59% 41%

Panztnu 1967 4,427 847N 166%

Philippines i970 54,570 69% 31%

17aiLi1972 3,329 77% 23%

Iran 1967 27,424 88% 12%

Turiisia 1971 12,790 99.61% 4%

Malaysia 1973 22,353-/ 76.34% 23.66% a! a Thtrie dre ah additional 10,221 specialty hospital beds for tuberculosis, leprosy and psychiatric care.

- Of which 3540 beds are in estate and mine hospitals.

Souirces: Colombia: Economic Growth of Columbia, Vbl. IV, (IBRD), p, 6.

Kenya: bevelopment Plan for Kenva (Health Sector), 1968/69-1973/74 (unpublished).

Panama, Honduras, Philippines, Haiti: A.IiD. Syncrisis: The Dynamics of Health, Vols. I, IIj IV, VI-, U.S. Department of the H.E.W.

Iran: John Z. Bowers, arid Lord Posenheim, Migration of Medical Manpower.

Tunisia: Annuaire Statistique, 1969; Unpublished internal documents.

Malaysia:F UnpUbiished statistics ot the Aiiisytr of Health. TIABTSlDfVhLE LV

Indices Of Utilization of General Hlospitals

Average Days Occupancy R^:e (Per Ccn Countr), Year Beds Discharges Patient D3YS of Stay

Malawi 1965 1,025 24,528 293,817 12.0 78.5 A I' Morocco 1905 12,157 267,835 3,469,668 13.0 78;2 A , Senegal 1967 2,424 33,944 813,237 24.0 91.9 ; Tanzania 1967 12,732 348,427 9.4 85.7

Tunisia 1.967 6,655 22.2,813 2,059,619 9.2 ' 84.8 V T Colombia 1967 34,399 871,911 7,226,563 8.3 57.b6

Honduras 1967 3,408 78,488 980,737 12.5 78.8:,I A0 Jamaica 1967 3,034 82,565 914,679 12.5 1 ! L 4 P.I Jordan T 1967 1,980 43,087 293,618 6.840

ThailandT 1967 20,161 790,338 4,606,036 5.8 62,6 4 60!;JI Turkey 1967 32,686 895,912 7,235,542 8.1 . A a! c' b/ Malaysia 1972 17,063 10654821545,821- 4,912,389-'2 9.0-~ 67:.r5

i A Government Hospitals Only - admissionsdmsins 1/970- c/ estimated T = Total

Source: World 11al_th Statistics Annual, 1.967, Vol.. III. -81-

APPENDIX B THE CAPITAL COSTS OF MEDICAL FACILITIES

C.costs of hospital beds Ipoh General Hospital, tender accepted June, 1974 building and certain equipmehtt $30.461 milliona (excludes staff quarters) additional equipment (medical and surgical furnishings)b 4.000 $34.461 uIl ±140 802 beds - no outpatient department Per bed $37.981 Notes: aExcludes land-costs, Ministry of Health in prior possession of the site. bCommonly described as loose equipment

Banting New bistrict Hospital, tendet accepted Augustj 1972 building $ 2.370 million (of which staff quarters) ( .529) loose equipment 700 3.070 t " outpatient block" - .100 $ 2.970 million 102 beds Per bed $29.117 Went into full operation it mid-1974

Jerteh District Hospital (Trengganu) tendered February, 1974 building $ 3.550 million staff quarters (0.913) loose eq4ipdent -700 $ 4.250 million 110 beds Per bed $38,636

Jerteh District Hospital (Pahang), tendered May, 1974 building $ 2.181 million (of which site preparation, (0.661) staff quarters) (0,791) loose eqdipment 0.300 $ 2.481 million 39 beds Per bed $63.615

Average Cost per Bed No. of beds Cost per Bed lWeights 802 .76 $37,981 28,866 102 .10 29,117 2,912 110 .10 38,632 3,863 39 .04 63,615 2,544 1053 1.0l0eighted average 38,185 1053 1.00Cost per Bed 3,8 -82-

2. Rural Outpatient Clinics, Standard Capital Costs

1. Main rural health center 360,000 - 440,000 2. Rural health subcenter 180,000 - 220,000 3. Midwife clinic-cum-quarters 20,000 - 25,000 3. Dental Clinics The basic equipment is the chair with its attendant equipment. Cur- rently these cost about $7,400. Dental clinics or dental chairs are almost always found attached to another facility. For example, in each of the eleven hospitals of Johore, there is a dental clinic. Many, if not most, large urban schools have a dental nurse equipped with a chair. APPEND'IX C ILLUSTRATIVE EXAMPLE OF METH0DDL0GY USED FOR THE COSTING OF TLtE OUTPtJTS OF RURAL HEALTTH SERVICES

Miachang Main Health Center (Kelantan Stat6)

1. Total staff on average during the year i573.

2 medical oflictrs of health (1 $ 1 7 , 1 0 0 )a 1 public health sistei- (14 $9,580) 1 hospital assistant (M $5,820) 1 public health overseer (M $3,060) 1 public health inspector (M $5,820) 1 public health nurse (M $5,700) 1 health nurse (MA $5,700j 3 &{sis'tdnt hurseg (M1$,180) 2 tidwives (N $3,000) 5 health attendan'ts (¢i $1,884)- 2 dispenisers (M $4020) 3 drivers (M $2,100) 1 gardener (M $l*920) 1 cletk (M $59400) Total Staff Cost: M $118,?00

2, tCiiltc starfing a. Chlild health clinic: one 6.75 hout clinic per week; average attendance: 100 children per clinic. Staffed by: 2 health nurses 2 assistant nurses 1 -idwe x 6lf75 hours 1 hea'th attendant I medical officer 2.25 hoours

X $11j, 8 0 b or X $1.14 staff cost per clinic attendant b. Ante-natal clinic'. One 6,75 hour clinic per week; average attendance: 90 women. Staffed by: 4 midwives 1 health nurseX 2 a66lsthant n Iirses6 1 heatth attenduant . M $1d4.28 or M $1.16 staff cost per clinic attendant Nbtes: aA"ifnlzl saiary of personnei category in Malaysian dollars. -Assumnlg 1,680 annuial workiiig hoWmA, an hourly wage equiva- IbnA iday be obtained tor each type of manpower; weighting the hbulty wtages od the clicii staff by number of hours qworked yialds total cliibt 6tAf! cost. -84-

c. School health clinic: one morning per week (4.75 hours); average 70 standard I pupils. Staffed by: 1 public health nurse 1 assistant nurse x 4.75 hours 1 driver 1 medical officer x 1.58 hours M $47.12 or M $.67 staff cost per pupil

d. Home visits: one morning per week (4.75 hours); will see from five to ten mothers in their homes, depending on distance. Staffed by: 1 staff nurse x x 4.75 hours 1 assistant nurse _ M $25.08 or an average staff cost from M $2.50 to M $5.02 per home visited

e. General outpatient clinic at the main health center: 5 days per week (6.75 hours per day); average attendance at daily clinic is 120 persons. Staffed by: 1 hospital assistant 1 assistant nurse 1 health attendant x 6.75 hours 1 dispenser 1 medical officer x 2.25 hours M $86.33 per daily clinic or M $.72 per clinic attendant f. Traveling dispensary clinics: Mobile child health and general outpatient clinics are done at the same time. One driver x 6.75 hours: prorated over total attendance at both of the clinics discussed below. (i) Mobile outpatient clinic: one clinic per week (6.75 hours); average attendance 50 people. Staffed by: 1 hospital assistant x 6.75 hours 1 health attendant 6 h M $81.50 (including share of driver), or M $1.63 per clinic attendant (ii) Mobile child health clinic: one clinic per week (6.75 hours); average attendance 35 people. Staffed by: 1 assistant nurse x 6.75 hours 1 staff nurse 3 M $38.64 (including share of driver) or M $1.10 per clinic at- tendant. -85-

APPENDIX Dl

A, List of activities provided by a main or sub-health center General outpatient visits at center, attended by hospital assistant Doctor's referral clinic, attended by a physician Traveling or mobile dispensary by center staff Ante-natal clinic at the center Child-health clinic at the center Subsidiary child health clinic held by center staff at the midwife clinic Subsidiary ante-natal clinic held by center strff at the midwife clinic Home nursing visits by midwife, assistant nurse, or staff nurse School health clinic held by center staff at primary schools Dental clinic Assistance with delivery of babies

B. Core staffing of sub- and main health centersa Main Health Centers Sub-health Centers 1 medical and health o-jerseer (M.D.) 1 public health overseer 1 public health inspector 1 stalff nurse 1 public health sister 2 assistant nurses 1 dispenser 1 midwife 1 midwife 1 hospital assistant 1 hospital assistant 1 clerk 1 clerk 2 attendants 2 attendants 1 gardener 1 gardener 1 sanitary laborer 1 sanitary laborer 1 driver 2 drivers

Note: aIn many cases, these centers have additional staff beyond the core minimum.