[ Pharmaceutical Sciences Asia - ONLINE ]
Print ISSN 2586-8195 E-ISSN 2586-8470
[ Journal Abbreviation: Pharm.Sci.Asia ]
Mahidol University Journal of Pharmaceutical Sciences
  FORMER NAME   "Mahidol University Journal of Pharmaceutical Sciences" Published Since 1974


DOI: https://doi.org/10.14456/mujps.2016.12Pharm Sci Asia 2016; 43(2), 97-105

Effect of costing methods on unit cost of hospital medical services; A case of capital cost

A. Riewpaiboon*, S. Rajbhandari1, P. C. Coyte

1 Division of Social and Administrative Pharmacy, Department of Pharmacy, Faculty of Pharmacy, Mahidol University, 447 Sri-Ayutthaya Road, Ratchathevi, Bangkok 10400. Thailand
2 Institute of Health Policy, Management and Evaluation, University of Toronto, Canada

Efficiency measurement is designed to compare the value of resources used in production in terms of unit cost. However, in practice, different valuing methods can result in difference in unit costs. Therefore, this study is aimed to provide evidence on effect of capital costing methods on unit cost of hospital medical services. The study was conducted in a regional hospital in Thailand employing standard costing methods. All costs were converted and adjusted to 2012 US dollars. There were 25,609 items valued which comprised equipment, furniture and vehicles. Twenty-six percent of the items valued had been used for more than their reference useful life. Capital costs was calculated using three methods, i.e., economic methods (3 % discount rate) with a fixed useful life (method 1), economic methods with extended useful year to study year in case when working time was over the reference useful year (method 2) and accounting method (method 3). Total capital cost from method 1, 2 and 3 was accounted for 16% (US$8,692,564), 13% (US$6,625,909) and 5% (US$2,607,947) of the total hospital cost, respectively. Ten out-patient clinics and 31 in-patients wards were selected for unit cost calculation. Generally, unit costs of method 1 were highest and those of method 3 were lowest. This study indicated significant effect of costing methods on hospital cost analysis. Using only the results from the analysis without considering costing methods would generally lead to an error in management. Therefore, standard costing guidelines should be developed for each country for effective analysis.


Hospital cost analysis, unit cost, costing method, capital cost

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