The economic costs of orthopaedic services: a health system cost analysis of tertiary hospitals in a low-income country

Abstract

Background: Traumatic injuries are rising globally, disproportionately affecting low- and middle-income countries, constituting 88% of the burden of surgically treatable conditions. While contributing to the highest burden, LMICs also have the least availability of resources to address this growing burden effectively. Studies on the cost-of-service provision in these settings have concentrated on the most common traumatic injuries, leaving an evidence gap on other traumatic injuries. This study aimed to address the gap in understanding the cost of orthopaedic services in low-income settings by conducting a comprehensive costing analysis in two tertiary-level hospitals in Malawi.

Methods: We used a mixed costing methodology, utilising both Top-Down and Time-Driven Activity-Based Costing approaches. Data on resource utilisation, personnel costs, medicines, supplies, capital costs, laboratory costs, radiology service costs, and overhead costs were collected for one year, from July 2021 to June 2022. We conducted a retrospective review of all the available patient files for the period under review. Assumptions on the intensity of service use were based on utilisation patterns observed in patient records. All costs were expressed in 2021 United States Dollars.

Results: We conducted a review of 2,372 patient files, 72% of which were male. The median length of stay for all patients was 9.5 days (8-11). The mean weighted cost of treatment across the entire pathway varied, ranging from $195 ($136-$235) for Supracondylar Fractures to $711 ($389-$931) for Proximal Ulna Fractures. The main cost components were personnel (30%) and medicines and supplies (23%). Within diagnosis-specific costs, the length of stay was the most significant cost driver, contributing to the substantial disparity in treatment costs between the two hospitals.

Conclusion: This study underscores the critical role of orthopaedic care in LMICs and the need for context-specific cost data. It highlights the variation in cost drivers and resource utilisation patterns between hospitals, emphasising the importance of tailored healthcare planning and resource allocation approaches. Understanding the costs of surgical interventions in LMICs can inform policy decisions and improve access to essential orthopaedic services, potentially reducing the disease burden associated with trauma-related injuries. We recommend that future studies focus on evaluating the cost-effectiveness of orthopaedic interventions, particularly those that have not been analysed within the existing literature.

Keywords: Orthopaedic trauma; Tertiary level hospitals; Time driven activity based costing; Top-down approach; Traumatic injuries.

Fig. 1

Total costs illustrates the estimated annual costs of the orthopaedic departments of Mzuzu Central Hospital (MCH) and Kamuzu Central Hospital (KCH). Unit costs by Diagnosis and Service Area

Fig. 2

Mean Costs by Diagnosis provides a succinct overview of the weighted mean costs categorized by diagnosis. Notably, Kamuzu Central Hospital (KCH) exhibits higher mean treatment costs by diagnosis than Mzuzu Central Hospital (MCH)

Fig. 3

Sensitivity Analysis. presents the sensitivity analysis results conducted for Kamuzu Central Hospital (A) and Mzuzu Central Hospital (B). The analysis focuses on the impact of logical costs and discount rates on the total. The findings show that both hospitals exhibit a higher sensitivity to changes in discount rates compared to logical costs