Hospital Costing Study-Timor Leste

Ministry of HealthTimor-Leste

Hospital Costing Study

Hospital National Guido Valadares & Bacau, Maliana, Maubisse, Oecusse &

Suai Referral Hospitals

HEALTH SECTOR STRATEGIC PLAN (HSSP)Prepared For MOH East Timor as part of the Implementation of “Financing the Health Services”

Prepared by: Dr. Purna Chandra Dash Financial Management SpecialistSIHSIP

Hospital Costing Study May 2008 –Final Draft

TABLE OF CONTENTS

1 Introduction...........................................................................................................91.1 Reason and aim of the TOR.......................................................................101.2 Approach to meeting the Terms of Reference............................................101.3 Hospital Services in Timor-Leste................................................................111.4 Health Sector Financing in Timor-Leste.....................................................12

2 Hospital Costing Methodology............................................................................143 BASIC FINDINGS...............................................................................................204 Findings and Analysis – Hospital National Guido Valadares..............................27

4.1 Findings......................................................................................................274.1.1 Introduction.........................................................................................274.1.2 Basic Activity Statistics.......................................................................274.1.3 Total Costs..........................................................................................284.1.4 Total Costs – All Cost Centres............................................................294.1.5 Unit Costs – Inpatient & Outpatients...................................................294.1.6 Analysis by Line Item..........................................................................304.1.7 Salaries and Staffing Levels...............................................................314.1.8 Medical Supplies.................................................................................32

4.2 Analysis – HNGV........................................................................................334.2.1 Basic Activity Statistics.......................................................................334.2.2 Total Costing.......................................................................................334.2.3 Unit Costs Outpatients and Inpatient..................................................344.2.4 Individual Line Items...........................................................................344.2.5 Health Information – Medical Records................................................374.2.6 Budgeting and Reporting Structure....................................................374.2.7 VIP User Fees.....................................................................................38

4.3 Patient Satisfaction Survey.........................................................................384.4 Conclusion..................................................................................................39

5 Findings and Analysis - Baucau Referral Hospital.............................................415.1 Findings......................................................................................................41

5.1.1 Introduction.........................................................................................415.1.2 Basic Activity Statistics.......................................................................415.1.3 Total Costs..........................................................................................425.1.4 Total Costs – All Cost Centres............................................................425.1.5 Unit Costs – Inpatient & Outpatients...................................................435.1.6 Analysis by Line Item..........................................................................445.1.7 Salaries and Staffing Levels...............................................................445.1.8 Medical Supplies.................................................................................45

5.2 Analysis – Baucau Referral Hospital..........................................................465.2.1 Activity Statistics – Bed Occupancy Rate (BOR) & Average Length of Stay (ALOS).......................................................................................................465.2.2 Total Costs of hospital........................................................................465.2.3 Unit Costs – Inpatients & Outpatients.................................................475.2.4 Expenditure on individual line items...................................................475.2.5 Health Information – Medical Records................................................495.2.6 Budgeting and Reporting Structure....................................................49

6 Findings and Analysis - Maliana Referral Hospital.............................................516.1 Findings......................................................................................................51

6.1.1 Introduction.........................................................................................516.1.2 Basic Activity Statistics.......................................................................516.1.3 Total Costs..........................................................................................526.1.4 Total Costs – All Cost Centres............................................................52

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6.1.5 Unit Costs – Inpatient & Outpatients...................................................536.1.6 Analysis by Line Item..........................................................................546.1.7 Salaries and Staffing Levels...............................................................546.1.8 Medical Supplies.................................................................................55

6.2 Analysis – Maliana Referral Hospital..........................................................566.2.1 Activity Statistics – Bed Occupancy Rate (BOR) & Average Length of Stay (ALOS).......................................................................................................566.2.2 Total Costs..........................................................................................566.2.3 Unit Costs Outpatients & Inpatients....................................................576.2.4 Expenditure on Individual Line Items..................................................576.2.5 Health Information – Medical Records................................................596.2.6 Budgeting and Reporting Structure....................................................59

6.3 Conclusion..................................................................................................607 Findings and Analysis - Oecusse Referral Hospital...........................................61


7.2 Analysis – Oecusse Referral Hospital........................................................667.2.1 Activity Statistics.................................................................................667.2.2 Total Costs..........................................................................................667.2.3 Unit Costs Inpatient & Outpatient.......................................................677.2.4 Individual Line Item Expenditure.........................................................677.2.5 Health Information – Medical Records................................................697.2.6 Budgeting and Reporting Structure....................................................69

7.3 Conclusion..................................................................................................708 Findings and Analysis - Suai Referral Hospital..................................................71


8.2 Analysis – Suai Referral Hospital...............................................................768.2.1 Activity Statistics - Bed Occupancy Rate (BOR) and Average Length of Stay (ALOS)...................................................................................................768.2.2 Total Costs of Hospital........................................................................768.2.3 Unit Costs Inpatients and Outpatients................................................778.2.4 Individual Line Items...........................................................................778.2.5 Health Information – Medical Records................................................798.2.6 Budgeting and Reporting Structure....................................................79

8.3 Conclusion..................................................................................................809 Forward Estimates – MTEF................................................................................8110 Recommendations..........................................................................................84

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List of Acronyms

ALOS Average Length of StayBOR Bed Occupancy RateBSP Basic Services PackageCHC Community Health CentreGDP Gross Domestic ProductGNP Gross National ProductGSB General State BudgetHNGV Hospital National Guido ValadaresHSSP Health Sector Strategic PlanIDP Internally Displaced PersonsIPD InpatientsMoF Ministry of FinanceMoH Ministry of HealthMTEF Medium Term Expenditure FrameworkOPD OutpatientsOT Operating TheatreR & M Repairs & MaintenanceTFET Trust Fund for East Timor

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Glossary

Ancillary Cost Centres The cost centres which support the hospital activities but do not themselves produce outputs, laboratory, kitchen, operating theatres, laundry etc

Assets Any of a business organisations tangible or intangible resources that possess or create economic benefit. Fixed assets represent the minimal resources required to deliver services e.g. buildings, equipment.

Average Length of Stay Annual bed days divided by number of discharges over the same period

Bed Day One overnight stay in a hospital

Bed Occupancy Rate Occupied bed days divided by the number of available beds over the same period

Bed Turnover Annual number of discharges divided by the available beds over the same period

Casemix Combination of patients with various disorders and acuity levels for a given provider or setting, which represents the various levels or amounts of care required

Capital Costs Those inputs whose useful life is longer than one year: buildings, equipment, furniture, vehicles

Direct Cost Centres Cost centres responsible for producing final outputs: inpatient wards and outpatient clinics

Efficiency Maximising the production of goods and services while minimising the resources required for production

Final Cost Centres Direct cost centres, including all allocated overhead and ancillary costs

Inputs The resources used to produce outputs

Line Items Types of inputs: salaries, medicine, buildings

Outcomes Results of interactions with the hospital system, for example improved health status

Output Patients seen in outpatients. Number of patient bed days. Number of laboratory tests.

Overhead Cost Centres The cost centres whose inputs do not vary with output

Recurrent Costs Those inputs whose useful life is shorter than one year: salaries, medicines etc

Unit Costs Average costs

Useful Life The length of time that an input can be used to produce outputs

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Executive SummaryThe Government of Timor-Leste, with the Ministry of Health has set an overarching policy which states that hospital expenditure is not to exceed more than 40% of total government health sector expenditure. In recent years the large capital investment into new hospitals in Timor-Leste has meant that the MoH has not been able to keep to this target. However if we examine only recurrent expenditure then the target has been maintained. Refer to Table 6 to see actual % of recurrent expenditures allocated to hospitals. The overarching 40% target does not provide any guidance on the resource allocation to each of the hospitals, and hospital allocations have been based on historical costs and ad hoc planning, with little or no analysis of expenditures.

The hospital costing study reflects a concerted effort by the Ministry of Health to strengthen its strategic management of hospital expenditures. The report presents the results of what has been a detailed and rigorous enquiry into financial features of the National Hospital and the five referral hospitals in Timor-Leste.

Basic Activity Statistics (2007)

Hospital National Guido Valadares

Baucau Referral Hospital

Maliana Referral Hospital

Oecusse Referral Hospital

Suai Referral Hospital

Average

Number of Beds 264 114 24 24 24 90

Outpatient Visits 34,464 67,016 52,509 20,439 16,633 38,212Number of Inpatients 11,934 3,616 1,638 1,185 1,638 4,002No. of Inpatient Bed Days

53,646 34,174 7,552 5,032 5,316 21,144

Avg. Length of Stay 4 9 5 4 3 5Bed Occupancy RateBed Turnover

56%49

79%32

99%68

57%49

61%68

70%53

Unit Costs of OPD and IPD

Hospital National Guido

ValadaresUSD$


USD $


USD $


USD $


USD $Total OPD Cost 408,355 198,188 176,881 159,270 175,201

Total IPD Cost * 5,237,400 1,144,018 579,267 475,571 545,081

OPD Cost per attendance 11.84 2.95 3.37 7.79 10.54

IPD Cost per patient 438.86 316.38 353.64 401.33 332.77

Cost per Inpatient day 97.63 33.48 76.70 94.51 102.54

Cost per Laboratory Test 16.00 2.00 4.00 4.10 5.10

Cost per Radiology Test 10.00 5.00 9.00 6.80 9.90

Cost per Operation 309.00 146.00 379.00 1,240.72 922.35

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Key Findings

The activity figures show that all hospitals, apart from Maliana, are operating at well below the internationally accepted occupancy rate; this suggests that hospitals are either inappropriately sized or being run inefficiently and that there is substantial excess capacity in the hospital sector.

Bed day cost variations across the hospital set are extreme.

Bed day costs at all facilities other than Baucau Hospital are well above the internationally accepted norms.

There is little or no relationship between resource allocations in terms of either materials or manpower across hospitals and production or number of beds.

The referral system as adopted by the MoH has not been fully implemented across hospitals and many of the outpatient services provided by hospitals are for non-referral patients. This is cost-inefficient.

Communication systems between the central offices of the MoH and the hospital set, and within each facility, are inadequate to support efficient and effective service delivery.

Hospitals are operating without standards and protocols in both clinical and support sectors.

Hospital management information systems, including collection of patient information is ad hoc, with HNGV, Baucau and Maliana collating data, whilst the remaining hospitals collect the data but no collation or analysis is undertaken.

The Ministry’s centralised financial management system has resulted in a lack of ownership of financial management, including budgets at facility level.

Lack of inventory management systems is hampering efficient service delivery.

Repairs and maintenance for equipment and buildings is often done on an ad hoc basis, with some equipment lying broken or idle for long periods of time.

Key Recommendations

The Hospital Services Package (HSP) team work with hospital management to review utilisation, including an estimate of future demands, determine protocols and guidelines for hospitals, including the referral process, development of a robust hospital management information system;

The HSP team and the Division of Human Resources work with hospital management to determine suitable staffing norms in keeping with the delineations and clinical service profiles. In addition urgent attention be given to developing appropriate job descriptions and duty statements for all workforce cadres.

Finance working group from MoH and hospitals work together to develop manuals and guidelines and determine an appropriate financial system for the hospital set;

Inventory systems be developed to allow accurate monitoring and safeguarding of stock;

Repairs and maintenance programs are developed and implemented with assistance from the TA being recruited by MoH.

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1 Introduction

Hospitals play a key role in all health care systems as referral institutions for higher curative care, as training facilities for health care workers and as platforms for primary care activities including prevention and promotion services. It is widely accepted that the effectiveness of primary health care is impeded without a well integrated hospital system allowing for a supportive and complementary referral process. However, the positive effect of hospitals comes at a price: hospitals are the largest and most costly health care institutions requiring more human and financial resources than any other agency or programme in the sector.

In developing countries, hospitals consume between 30-50% of total health sector expenditure and about 50-60% of government health sector expenditure. They also account for between 60-80% of government health facility expenditure and about 70% of district level health facility expenditure. About 60-80% of hospital expenditure is absorbed by central (national) and provincial hospitals with the remainder going to district hospitals.

The figures cited above – and many more that could be listed - tell us much about the cost impact of hospitals on health sector budgets around the world. The figures indicate also that significant analysis of the economic circumstances of hospitals has been undertaken to reach this level of detail.

In Timor-Leste, a “broad brush” understanding of the hospital network’s economic impact is readily available, in part because of the sustained policy stance of restricting hospital operating costs to no more than 40% of overall recurrent health expenditure. However, beyond this macro appreciation, very little analysis has been undertaken locally to identify and explain the more particular and specific features of hospital expenditures. Given the undoubted importance of hospitals, it may seem surprising that so little is known about the costs and related structures of Timorese hospitals. However, on reflection, it can be seen that this is largely a product of the overwhelming attention that has been given, appropriately, since independence to community-based ambulatory services in the context of persistently poor national health indicators.

The Ministry of Health acknowledges that at present it has only limited insight into the operating costs of its hospitals. It also accepts that to date the routine collection of baseline financial data for hospitals has not been handled effectively. The result is that neither the Ministry nor the individual hospitals can be confident that they are managing hospital expenditures in an efficient and effective manner for the betterment of the nation.

The hospital costing study reflects a concerted effort by the Ministry of Health to strengthen its strategic management of hospital expenditures. The report presents the results of what has been a detailed and rigorous enquiry into financial features of the National Hospital and the five referral hospitals in Timor-Leste. The report is presented in five sections:

1. An overview of the various methodologies used2. A presentation of the particular findings for each hospital3. A commentary and analysis based on the findings for each hospital4. A linkage of findings with a review and updating of the hospital-related features of the

Medium Term Expenditure Framework5. An overall summation of findings and a series of recommendations for future actions

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1.1 Reason and aim of the TOR

The hospital costing study is part of a range of strategic initiatives that the Ministry of Health has undertaken with technical assistance over the past two years. It is a significant component of the Ministry’s commitment to enhance both its stewardship and delivery responsibilities within the health sector. As such, the study, and the report emanating from it, should be considered in tandem with the other seminal documents recently prepared: the Health Sector Strategic Plan (HSSP), the Basic Services Package (BSP), the Medium Term Expenditure Framework (MTEF) and the Revised National Health Workforce Plan. All but the last of these policy documents cover the period 2008 to 2012 with the workforce plan projecting needs to 2015. All provide input on broad financial management strategies and expenditure plans for the health sector in Timor-Leste. As findings from the hospital costing study emerge, aspects of some of the other policy documents will need to be modified. In particular, the MTEF’s focus on projected hospital expenditure and related financing policy will require significant remodelling to accommodate new information and revised priorities. The main areas that require further clarification are to provide evidence on current hospital costs, and develop mechanisms to improve the financing of hospitals through the updating of the MTEF.

The specific tasks for the Hospital Costing Study were as follows:

Review existing planning and strategy documents, including the Medium Term Expenditure Framework and Hospital Services Package and other documents as appropriate.

Work with the Ministry of Health to outline and plan a schedule for the production of outputs described above.

Design hospital studies as described above, and patient studies if appropriate (these may be undertaken as part of the AusAID Health Seeking Behaviour Study)

Facilitate a workshop of key stakeholders outlining the objectives and purpose of the study

Analyse and report study results Critically review current resource allocation and hospital financing mechanisms Summarise and present data to key stakeholders in a workshop Present findings and recommendations as described above to the Ministry of Health Facilitate a workshop for Ministry of Health to finalise policy on hospital financing and

outline an implementation plan Support the Finance Department in the Ministry of Health in incorporating a hospital

financing plan in 2008 and complete a revision of the Medium Term Expenditure Framework

1.2 Approach to meeting the Terms of Reference

Initial meetings were held with Hospital managers and finance staff in the Ministry of Health to determine the data available for the study, after the initial meetings a work plan was developed and the following approach was adopted:

Initial questionnaire was prepared to gather basic data from each hospital department;

Financial reports from the Freebalance system for 2006-07 were obtained and line item expenditure was analysed;

Workshops were held with all hospital managers to discuss departments and structures;

Contracts for outsourced services were reviewed; Interviews with staff were held to determine allocation of time;

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Pharmacy records were analysed to determine allocation; Floor plans and equipment lists were analysed; Observations of departments and activities were undertaken; Analysis of patient records was undertaken; Patient Satisfaction Survey was undertaken at HNGV; Allocation of costs to departments based on the step down methodology as described

below.

1.3 Hospital Services in Timor-Leste

Timor-Leste has six hospitals operating throughout the country. The Hospital National Guido Valadares (HNGV) is a 264 bed hospital situated in the capital city Dili. HNGV operates as the national referral hospital and as such should only see referral cases from other hospitals and surrounding Community Health Centres in Dili and neighbouring districts. Baucau Referral Hospital is a 114 bed hospital operating in the district of Baucau, approximately 3 hours drive from the capital. Maliana Referral Hospital is a 24 bed hospital operating in the district of Bobonaro, approximately 4 hours drive from the capital. Maubisse referral hospital is a 24 bed hospital operating in the district of Ainaro, approximately 3 hours drive from the capital. Oecusse Referral Hospital is a 24 bed hospital operating in the enclave district of Oecusse, approximately a 10 hour drive from the capital (through West Timor). Suai Referral Hospital which is also a 24 bed hospital operating in the district of Covalima, approximately a 7 hour drive from the capital.

The Ministry of Health, with financial assistance from the European Commission and various donors (through the TFET), has recently completed the construction of new hospitals in Maliana, Maubisse and Oecusse. Maliana and Oecusse construction replaced the existing hospital buildings, whereas Maubisse will have a hospital for the first time. Construction is on going for HNGV, Suai and Baucau with expected completion dates in late 2008.

The structure, authority and responsibilities of the hospitals in Timor-Leste are subject to specific legislation enacted by Parliament (Decree Law No 1/2005 Estatuto Hospitalar). The legislation recognises a two tier hospital system:

The Hospital National Guido Valadares (HNGV) in Dili; and Five referral hospitals.

Article 4 of Decree Law No 1/2005 states that ‘hospitals operate under the supervision and tutelage of the Minister of Health, who is responsible for:

Defining hospital performance norms and general principles; Approving hospital internal regulation; Control of the hospital operations and evaluating the outcome and the quality of

services provided; Authorising the creation, extinction and or modifications of services and their

budgets; Determining the audit and inspections of hospital operations;

And together with the Minister of Finance and Planning Approve action plans and budgets; Approve activity reports and accounts; and Approve the price list. ‘

Article 7 of Decree Law No 1/2005 determines that hospitals will have the following departments: Administrative Council (Board), Audit Department and Technical support Department. Article 33 provides financial, patrimony and human resource management autonomy to hospitals. The meaning and level of autonomy has not been clearly defined for hospitals, particularly in the area of financial management. As such the hospitals financial management has remained largely under the direct control of the MoH finance department.

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A new organic health law has recently been enacted for the MoH. The organic law provides the basis for the structure and directorates operating within the MoH. A new national directorate for hospital and referral services has been added to the MoH structure. This directorate will sit within the Central Services function of MoH. Together with the organic law, come the Ministerial Diploma No /2007 of the Organic Statute for the Central Services. The Ministerial Diploma outlines the roles and functions for each directorate. The National Directorate of Hospital and Referral Services will be responsible for the studies, conception and technical coordination of hospital service delivery and referral activities. The directorate will be made up of three departments: Department of Clinical Services, Department of Hospital Management Support and the Department of Referral Services. The MoH is in the process of implementing the new organic law and at the time of this report the National Directorate of Hospital and Referral Services had not yet been set up.

Both the HSSP and the BSP identify the primary functions and roles of the various facilities that make up the hospital network in Timor-Leste. The BSP provides guidance to hospitals on the services to be provided. However it is noted in the BSP that it is only a minimum list of services. The Ministry of Health, through a working group for Hospital Services Package implementation (HSP) is currently undertaking a review of these services for each hospital. The working group will assist hospitals in appointing a Board of Directors as required by the legislation. At the time of this report the working group was in the process of finalising the HSP for Maubisse Hospital.

1.4 Health Sector Financing in Timor-Leste

With a gross national product of about USD$450 per capita1, Timor-Leste is one of the poorest countries in Asia. In 2000, the health sector received around 5% of GSB expenditure. This has been substantially increased in recent years ‘Combating Poverty as a National Cause’ states that social sectors (Health and Education) should receive a minimum of 35% of all GSB resources, and that the long run percentage will be 11.6%. For the fiscal year 2006/07 the MoH received 11.7% of the total GSB recurrent planned expenditure, however, for the 20082 fiscal year the MoH is receiving only 6.3% of the GSB planned recurrent expenditure. It is unclear at this time whether this lower % will continue into following years.

MoH has historically been one of the better performing ministries in regards to budget execution achieving execution rates of up to 94% for the 2005/06 year and 95% for the 2006/07 fiscal year.

Hospitals have historically received the bulk of their recurrent funding directly from the GSB, donor contributions to hospitals have been mainly “in-kind” with the key donors as follows:

European Commission (through World Bank managed grant) – drugs and medical consumables;

Government of Cuba – through the provision of 113 specialists, general practitioners, nurses and technicians;

AusAid (through RACS) – provision of specialists, surgeons and nursing staff; UNFPA – provision of 5 specialists; St John of God – provision of laboratory services; and Fred Hollows foundation eye care programme.

At present the health sector does not have any substantial programme for cost recovery. Some small user fee charges have been developed by hospitals for VIP services and non-Timor-Leste citizens, the fees are deposited directly into the GSB. However hospitals may, through an increase in their annual budgets, utilise these fees. The amounts collected are

1 Banking & Payments Authority, Timor-Leste Economic Statistics 20062 The new Government has changed the fiscal year to run concurrently with calendar year as of 1 Jan. 2008

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minimal, for the 2006/07 fiscal year they amounted to $66,000. MoH has no plans in the short term to move towards a user pay system for health care.

As noted earlier the Government of Timor-Leste, with the Ministry of Health has set an overarching policy which states that hospital expenditure is not to exceed more than 40% of total government health sector expenditure. In recent years the large capital investment into new hospitals in Timor-Leste has meant that the MoH has not been able to keep to this target. However if we examine only recurrent expenditure then the target has been maintained. Refer to Table 6 to see actual % of recurrent expenditures allocated to hospitals. The overarching 40% target does not provide any guidance on the resource allocation to each of the hospitals, and hospital allocations have been based on historical costs and ad hoc planning, with little or no analysis of expenditures.

The Government of Timor-Leste has set up a highly centralised system for financial management, with all financial transactions being processed through the Ministry of Planning and Finance despite constant rhetoric about movement towards managerial decentralisation. This has led to significant constraints within the Ministry of Health in terms of its financial management autonomy. In particular it has meant that the Ministry has yet to develop a meaningful reporting structure for health programmes including hospitals. As a consequence, hospitals throughout Timor-Leste have come to rely totally on the Department of Finance in the central offices of the Ministry to act as their agent in the preparation of budgets, the processing of financial transactions and the obligatory liaising with the Ministry of Planning and Finance on the execution for financial transactions. However there are very limited guidelines on service standards, including reporting back to hospitals on budget execution, expenditure incurred and revenues raised.

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2 Hospital Costing Methodology

Hospitals

Like all organisations hospitals are designed to produce outcomes – in this case enhanced health status. Outcomes and the more intermediate outputs (utilisation rates, occupied bed days, etc.) are achieved by an array of activities (operations and procedures, etc.) all of which generate costs by consuming resources. The main resources used by a hospital can be defined as:

Fixed assets – those assets which are required to deliver services and do not change in the short term when the level or quantity of patient care changes (for example, buildings, plant, major equipment items, personnel); and

Variable assets - those assets/resources which are used or “consumed” in proportion to the level or quantity of patient care provided (for example, number of drugs prescribed, number of meals served, etc.)

For example, as inpatient numbers change over time so too would the level of hotel service activity change (meals provided and clean laundry produced) while staffing numbers would remain relatively constant regardless of short term fluctuations.

Of particular interest to the costing study is the issue of how efficiently the hospitals in Timor-Leste, and those who manage them, use these fixed and variable resources relative to their desired or expected outcomes.

Efficiency

A hospital is economically efficient if it is producing at the lowest cost per output. To achieve this efficiency, the hospital has to choose the physical combination of inputs that produce the maximum output, of which there can be many optimal combinations. From these the hospital must choose the option that minimises costs without reducing quality below an acceptable, explicit level. Experienced managers make decisions based on their technical knowledge of what mix of staff, equipment and technologies minimise waste and maximise desired outputs and outcomes relative to the costs of the selected inputs.

The term “efficiency” refers to the relationship between costs incurred and outcomes /outputs achieved – that is, desired benefits. Efficiency can be classified as technical efficiency and allocative efficiency. Where, technical efficiency refers to the physical relationship between resources (capital and labour) and health outcomes. A technically efficient position is achieved when the maximum possible improvement in outcome is obtained from a set of resource inputs. Allocative efficiency assists in informing decision makers on resource allocation. Allocative efficiency is achieved when resources are allocated so as to maximise the welfare of the community.

Economic efficiency is measured by calculating the average cost of an output. Whether or not this average cost is inefficient needs to be subjected to further comparison and analysis.

Accordingly, the following approaches have been used in this study:

1. Line item analysis – the percentage of each individual line item of expenditure was calculated and compared against norms for hospitals. A comparison between each of the hospitals in Timor-Leste was also undertaken. This results in an indication of the areas of wastage and reveals whether managers are achieving the most efficient mix. To support these results, discussions were also held with staff on the most appropriate mix of resources, and where staff felt that they experienced the greatest deficiencies in resources, as this can force hospitals into inefficiency.


2. Occupancy rates analysis – efficiency and therefore average cost per bed day is highly correlated with occupancy levels. Typically, hospitals have high fixed costs (that is, costs such as buildings and plant) which remain constant regardless of the activity/output levels. As a consequence of this, it is generally the case that higher bed occupancy levels result in lower average costs per bed occupied.

Generally, bed occupancy of around 80% is regarded as indicating that resources associated with inpatient care are being optimally utilised. Occupancy at or around this level provides a sufficient workload for staff to retain skills without being over-burdened. It also provides free capacity to manage emergency conditions (such as episodic disease outbreaks). Occupancy levels well below the 80% mark can promote inefficiencies of scale and complicate human resource management and physical facility maintenance decision making. Occupancy rates need to be assessed in tandem with turnover times as the two are closely aligned in efficiency measures.

Costs

The sum total cost of the activities or operations of a hospital is calculated by combining the total fixed costs plus the total variable costs (which are in turn determined according to the variable cost associated with a service unit multiplied by the number of service units delivered).

The fixed cost component depends in the main on the level of patient services provided. So, for example, a national teaching hospital (such as HNGV) delivers a wider range of secondary and tertiary care involving higher staffing profiles, more sophisticated and expensive equipment and a broader catalogue of soft technologies (drugs and other consumables) than hospitals serving local and district functions. The WHO provides a clear delineation of the distinction between facilities at different tiers of the system. This classification has been applied in Timor-Leste through the Basic Services Package (BSP) and incorporated in the priority directives of the Health Sector Strategic Plan (HSSP).

The delineated role of a hospital determines the broad configuration and number of its service units. National hospitals such as HNGV will treat a wider range and greater number of patients than a district hospital. A wider range of service units equates with higher fixed and variable cost pressures. Internationally, the concept of “Casemix” is applied to provide a basis on which to compare between hospitals of similar and different functions.

For purposes of this study, the important point to recall is that the more service units, the wider array of asset usage, the more intensive and complex the casemix, the greater the costs. In addition, there are other features of costings that need to be considered. For example, variable costs are likely to differ between hospitals of different levels due to a number of factors including accessibility and economies of scale and scope. These and other matters will be addressed in this costing study report.

Essentially, an analysis of the costs of hospitals has to analyse the fixed costs, variable costs per service unit and the number of service units rendered. Results of this analysis will provide managers and others with particular information on which to make considered decisions about how best to ensure efficient use of resources within the hospitals. Ultimately, and perhaps more importantly, the results will also add to decision making about the effective use of resources.

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Focus of the study

The HNGV and four of the district referral hospitals are considered in this study. The fifth district referral hospital at Maubisse has only been included in the Medium Term Expenditure Summary as this hospital was not scheduled to be opened until mid to late December 2007.

The HNGV in Dili is a 264 bed central hospital. It is the final national referral hospital for Timor-Leste. Baucau Referral Hospital in Baucau is a 114 bed hospital which is situated in the second largest city in Timor-Leste. Maliana, Oecusse and Suai Referral Hospitals are all 24 bed referral hospitals. The map on the following page shows the geographical location and population coverage for each of the hospitals.

HNGV DILIServicing the district of Dili – Pop. 175,730 and referrals from all other hospitals

Maliana Referral HospitalServicing the district of Bobonaro – Pop. 83,519

Oecusse Referral HospitalServicing the enclave district of Oecusse – Pop. 57,616

Baucau Referral HospitalServicing the districts of:

Baucau –Pop. – 100,478Lautem – Pop. - 56,293Viqueque – Pop. – 65,499Total Pop serviced -224,540

Suai Referral HospitalServicing the districts of:Covalima – Pop 53,063

Maubisse Referral Hospital Servicing the districts of:Ainaro –Pop. - 52,480Alieu – Pop. - 37,987Ermera – Pop. – 103,322Manufahi – Pop. 45,081Total Pop serviced -238,850

Costs and Cost Allocation Methodology

This study uses the “step-down” methodology for estimating costs. This methodology makes use of existing financial records and accounts. The process involves determining total hospital costs, the distribution of costs across selected cost centres and ultimately the allocation of costs to the outputs to which they are most closely related. The fiscal year 2006-07 was used to calculate the costs.

The first stage of the enquiry is to collect the total costs for each subject hospital. The costs should include items such as donated goods which may not appear on the expenditure records. It also includes the depreciation or annualised capital costs of capital goods.

The second stage is to identify all the cost centres in each hospital and then allocate the costs to them. These cost centres are divided into three types: overhead, ancillary and final cost centres (patient care). The individual cost centres identified for each hospital can be found at Appendix 1 with general descriptions noted below.

The following definitions are used to define the cost centres:

1. Overheads – these cost centres produce services which are not consumed directly by the patients, but just by other cost centres. The costs associated with these cost centres do not vary with output, i.e. they are fixed costs regardless of the level of service units provided. The overheads include: administration, finance, maintenance and domestic services.

2. Ancillary – these cost centres provide services which are used directly by patients, but also by other cost centres; e.g. the laboratory, pharmacy.

3. Direct – these cost centres provide services only to patients and are responsible for the final output; e.g. wards and outpatient departments.

For most costs, the process of allocating cost centres is relatively straightforward, as data is available on the expenditure, e.g. the cost of catering services, laundry and cleaning services. However for some types of cost estimates, the share used by each cost centre has to be determined. For example, the hospital and general wards staff cost had to be allocated across the direct cost centres. Therefore it was necessary to establish what proportion of staff time was spent in outpatient clinics and inpatient wards. These allocations were established through interviews and discussions with staff.

The third stage is to allocate the total costs of the overhead to the final direct centres. It was decided not to allocate the ancillary costs to the direct cost centres, but rather to leave these (laboratory and radiology) cost centres as direct cost centres. It is envisaged that as the costing methodology and systems improve in Timor-Leste hospitals better information will become available to allocate these costs to the final direct cost centres. In this study the following allocations have been made:

Allocating the overhead costs across all overhead departments and then after this step has been done, allocating all overhead costs across all other cost centres. The result of this step is the total costs for overhead costs are allocated to each other first and then allocated across all other cost centres. The costs of the first overhead cost centre were allocated to the remaining overhead cost centres and to the direct cost centres. In the next step, the costs of the second overhead cost centre were then allocated to the direct cost centres in the same manner. Step by step, all costs of all indirect departments were allocated to direct departments. The allocation key was floor space (e.g. cleaning costs), direct costs of final cost centres (e.g. general administration), costs of staff and number of bed-days (laundry). The following order was used in this study: general administration, maintenance, transport, domestic, medical records and pharmacy. Table xx below shows the flow for this step:


Table 1 Step Down Allocation Method

Indirect Cost Centre 1



Direct Cost Centre 1



Direct Costs $$$$ $$$$ $$$$ $$$$ $$$$ $$$$

Apportionment of Indirect Cost Centres

Total of Direct and Indirect Costs

0 0 0 ZXX ZXY ZXZ

Number of Service Units

0 0 0 a b c

Unit Costs - - - ZXXa

ZXYb

ZXZc

The fourth and final stage is to divide the total costs for final cost centres by the level of output measure as follows:

Outpatients = the number of patients seen; Laboratory = the number of tests undertaken; Radiology = the number of tests undertaken; Operating Theatre = the number of operations carried out; Inpatients = the number of bed days

Constraints

There are certain constraints to what a hospital costing study can achieve. The major impediment relates to the difficulties in collecting reliable and complete data. The circumstances of the Timor-Leste health system make this a particularly problematic issue. Throughout the Timor-Leste hospital network essential cash accounting and other financial management reports and medical utilisation and clinical records are non-existent, incomplete or riddled with errors.

Depreciation for equipment and buildings - an important component of fixed cost analysis - is not included in the accounts, as government institutions follow a cash accounting system rather than the now internationally favoured accrual method. Cash accounting records transactions only when payments are made or receipts of cash are received. This leads to a distortion in the acknowledgement of expenditure and receipts as transactions are not

18


matched to the period in which they occur. Donations, of which there have been many in Timor-Leste, are very rarely, if ever, reflected in the accounting system.

Hospitals in Timor-Leste do not prepare financial statements as a matter of course. All recording and reporting of financial transactions is done centrally. As the process of decentralisation continues, referral hospitals are still yet to appoint a finance officer. This has resulted in most requests for expenditure being sent to the Ministry of Health central finance department for processing. Adding complexity to these arrangements is the frequently alleged problem of poor communication between the different tiers of the system. Hospital managers interviewed in this study have claimed that they receive little useful information from the Ministry’s finance department on actual expenditure or budget utilisation. The relationship between the HNGV executive and the central offices of the MOH on collaborative financial management (and related) matters remains an area that needs substantial attention from all quarters.

Accordingly, the major source of data used in this study was the Ministry of Health finance department.

Assumptions/Estimates

In some cases estimates and assumptions had to be made as the information was not recorded or not complete. A list of these assumptions and estimations can be found at Appendix 2.

19


3 BASIC FINDINGS

Activity Figures

Table 2 shows some basic activity statistics for the five hospitals for the fiscal year 2006-07. Overall the main finding in relation to activity figures shows that all hospitals, apart from Maliana, are operating at well below the internationally accepted occupancy rate; this suggests that hospitals are either inappropriately sized or being run inefficiently and that there is substantial excess capacity in the hospital sector. Bed Occupancy Rates

Maliana Hospital has the highest occupancy rate at 99% of all hospitals, suggesting that Maliana Hospital may be overloaded, particularly as the internationally accepted norm for a hospital to run efficiently is around 90% occupancy level. Whilst it is considered that anything under this rate would result in a hospital not efficiently utilising its resources, the inverse is that anything above this would place undue stress on staff workload and resources.

HNGV has the lowest occupancy rate at 56%, suggesting that the hospital is underutilised, particularly as HNGV is the highest level hospital and therefore has more equipment and human resources than other hospitals. It would appear that the high costs of these resources are not being optimised. It would be expected that the average length of stay is positively correlated with the level of the institution, this is true for Baucau Referral Hospital, which offers a higher level of services than the other referral hospitals, while, HNGV which offers the highest level of services and has a more elaborate casemix, has an average length of stay in line with Oecusse hospital. Superficially this suggests that HNGV is not treating severely sick patients who require longer stays.

Outpatients

The number of outpatient visits for each hospital in relation to the number of inpatients supports the finding in this study that hospitals throughout Timor-Leste are not yet operating as the pinnacle of the referral system, but rather are treating non-referral outpatients at a level inconsistent with their BSP delineated role. This is the case for all hospitals. However it needs to be emphasised that in some cases it is not feasible to send patients away, for example in Baucau and Maliana where there is no CHC operating, whilst in Oecusse the closest CHC to the hospital is 7 kilometres away. It is not recommended that sick patients, often without transport or the means for transport are sent away from hospital outpatient departments to CHC’s.

Table 2 Basic Activity Statistics (2007)






Average

Number of Beds 264 114 24 24 24 90

Outpatient Visits 34,464 67,016 52,509 20,439 16,633 38,212Number of Inpatients 11,934 3,616 1,638 1,185 1,638 4,002No. of Inpatient Bed Days

53,646 34,174 7,552 5,032 5,316 21,144

Avg. Length of Stay 4 9 5 4 3 5Bed Occupancy RateBed Turnover

56%49

79%32

99%68

57%49

61%68

70%53

20


Efficiency

Table 3 shows the calculations of unit costs of outpatients and inpatient departments. As expected, the costs per OPD attendance are higher in the national hospital than in the referral hospitals. However due to the lower number of outpatients in Suai Referral Hospital the cost per outpatient is higher than other referral hospitals. The cost per outpatient for Baucau Referral Hospital is below the cost of outpatients at other referral hospitals. This is due to the high number of outpatients being seen at Baucau Hospital. As noted in the detailed findings it was apparent during the study that the referral system has not been fully adopted and hospitals are delivering primary health care services through the outpatient departments at a level not supported by the BSP. It was found that the estimated number of non-referral outpatients ranges from 39% (HNGV) to 97% (Oecusse). Under the current MoH budget structure, funding for primary health care services is held by the district health services; however the hospitals are delivering these services, whilst they are not receiving the funding to deliver these services. The MTEF calculates the target per capita range for the cost of reaching the BSP coverage levels for primary health care services, between the years 2008 and 2012 as $8.26 - $15.40. Only HNGV and Suai hospitals are falling within this range, all other hospitals are well below.

The cost per inpatient at the national hospital is, as expected higher than all other hospitals. Oecusse Hospital has the second highest cost per inpatient and this can be attributed to the lower occupancy rate at Oecusse Hospital. Baucau Hospital cost per inpatient is the lowest across all hospitals and again this is due to the number of inpatients. The costs per inpatient day vary from $102.43 (Suai) to $33.48 (Baucau). The mean cost per patient for days in similar hospitals in Indonesia is $35.12. These differences can be due to different reasons, firstly the different occupancy might be one cause, secondly, the differences might be due to higher costs per service rendered per patient day (e.g. per operation, per laboratory test, per x-ray), thirdly, the variation might be induced by a higher quantity of services per patient day.

Staffing

Staffing of hospital set is currently under review by the HSSP implementation team. Beginning analysis has been undertaken as part of the workforce planning initiative; see Section 2 of the draft workforce plan produced in December 2007. Some difficulty has arisen in obtaining consistent data on current workforce numbers within the hospital set as the MoH and individual facilities maintain/provided differing figures. The payroll system database is also difficult to interpret because of the significant numbers of non civil service positions being used to fill established vacancies. Despite these constraints, the staffing levels at the individual hospitals seem reasonable based on international norms. However, the skills profile of all categories of staff continues to be well below desirable circumstances.

Regardless of the above, whilever the present activity remains well below desired levels, productivity of the workforce is also unacceptably low. This has obvious implications for strategies designed to meet the Millennium Development Goals targets as noted in the BSP.

There are inconsistencies in staffing establishment levels between the referral hospitals. The HSP implementation team is aware of the anomalies and is working towards a more consistent and equitable deployment of all categories of staff on the basis of service population numbers and related demographic factors specific to hospitals.

The projections are that for the 5 year planning period actual numbers of staff within hospitals will not need to increase, however serious attention will need to be given to skills enhancement of current managers and clinicians. Current attempts to improve the core curricula of category of staff are noted as being a useful beginning.

21


Table 3 Unit Costs of OPD and IPD


ValadaresUSD$


USD $


USD $


USD $


USD $Total OPD Cost 408,355 198,188 176,881 159,270 175,201

Total IPD Cost * 5,237,400 1,144,018 579,267 475,571 545,081

OPD Cost per attendance 11.84 2.95 3.37 7.79 10.54

IPD Cost per patient 438.86 316.38 353.64 401.33 332.77

Cost per Inpatient day 97.63 33.48 76.70 94.51 102.54

Cost per Laboratory Test 16.00 2.00 4.00 4.10 5.10

Cost per Radiology Test 10.00 5.00 9.00 6.80 9.90

Cost per Operation 309.00 146.00 379.00 1,240.72 922.35

Table 4 shows the total costs for hospital services in Timor-Leste for the financial year 2006-07. As expected, HNGV consumes the bulk of the resources - 62% of the total costs, with Baucau consuming 15% and the remainder of costs being evenly spread across the other referral hospitals.

Table 4 Total Costs by Cost Centre (2007) USD $ 000

Final Cost Centre






Total

Laboratory 533 51 36 45 56 721Diagnostic – Radiology

144 23 35 29 35 266

OPD 408 198 177 159 175 1,117OT 640 105 83 108 112 1,048Internal Medicine

936 227 89 87 115 1,061

Surgical 749 253 86 44 49 1,181Maternity 677 186 63 61 71 1,058Paediatric 600 217 135 65 75 1,092Isolation 244 82 51 37 32 446ICU 281 - - - - 281VIP 376 - - - - 376Grand Total 5,646 1,342 756 635 720 9,099% Of Total 62% 15% 8% 7% 8% 100%

The graphs below show the % of each department for each hospital as a % of total costs. As can be seen there is wide variances between the allocations of each hospital.

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% of Costs to Total Costs By Department

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

GVNH Baucau Referral Hospital Maliana Referral Hospital Oecusse ReferralHospital


Internal MedicineSurgical WardMaternity WardPaediatrics WardIsolation Ward

The graph below shows the % of overhead costs for each hospital as a % of total costs, as can be seen there is a wide variance between hospitals with HNGV overhead costs amounting to 15% of total overhead costs whilst Oecusse overhead costs amounts to nearly 50% of total hospital costs.

Laboratory & Radiology Costs as a % of Total Costs

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

HNGV Baucau Hospital Maliana Referral Hospital Oecusse ReferralHospital


Laboratory CostsRadiology Costs

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Equitable Allocation

Table 5 Government Budget Allocation to Hospitals (excluding major capital) USD $000 , %

04/05 05/06 06/07 2008 2009 2010 2011


2,127 (57%)

2014(54%)

3,289(67%)

2,129(53%)

2,382(51%)

2,446(51%)

2,512(50%)


635 (19%)

707(19%)

572(12%)

573(14%)

873(19%)

893(19%)

917(18%)


258 (7%)

291(8%)

343(7%)

383(10%)

395(8%)

407(8%)

416(8%)


258(8%)

336(9%)

353(7%)

460(12%)

477(10%)

493(10%)

505(10%)


286(9%)

353(10%)

380(8%)

436(11%)

506(11%)

580(12%)

666(13%)

Grand Total Hospitals

3,564 3,701 4,937 3,981 4,633 4,819 5,016

Total MoH Recurrent Budget Envelope

8,300 14,100 16,100 18,798 15,500 17,100 19,600

% Allocated to Hospitals

43% 26% 31% 21% 30% 28% 26%

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Table 5 highlights the allocation of resources across hospitals. In terms of the equitable budget allocation, the % of costs bears little correlation to the utilisation rates for hospitals. Equity issues raised from the allocation of resources have not yet been addressed by the MoH. Nevertheless, it is apparent that there is a need to adopt a more equitable approach to resource allocation for hospitals.

The overall allocation to hospitals varies year by year with no reflection of an increase due to population, catchment areas, increased utilisation, cost of new hospitals and new equipment.

There are many methods for allocating resources across hospitals. A simple and equitable method for allocating resources, which may be the best for Timor-Leste at this time, would be to set bed levels based on catchment populations and expected number of patients, and then calculate the precise amount based on an efficient cost per patient. This would result in hospitals receiving their budget allocation based on utilisation and efficiency.

Another commonly used method for allocating resources across hospitals is to base it on bed day equivalents. Adopting this method would result in each hospital receiving its budget proportionally to its share of total bed day equivalents. The advantages of adopting such a simple method can be summarised as:

More objective and rational than allocations based on past budgets and political influence;

It rewards productivity and efficiency, so each hospital receives the same budget per inpatient-day and per outpatient visit.

There are of course, limitations to a system based on bed-day equivalents, namely:

Failure to account for preventive and promotive services; Failure to account for differences in the sophistication of services; Relies on good statistical information and requires auditing; Failure to account for other factors affecting costs, such as, distances, size of

catchment areas.

These limitations could be addressed by incorporating other factors in the allocation formula and by using a blended formula based on a combination of bed-day equivalents, historic budgets, catchment areas, and numbers of health facilities, total beds and casemix. Each hospital’s allocation would represent a weighted average of its share of the national total of each factor.

A simple and equitable method for allocating resources, which may be the best for Timor-Leste at this time, would be to set bed levels based on catchment populations and expected number of patients, and then calculate the precise amount based on an efficient cost per patient. This would result in hospitals receiving their budget allocation based on utilisation and efficiency.

Costs by Category of Expenditure

Table 6 shows the major costs for each hospital by category of expenditure for the fiscal year 2006-07. In general, the highest proportion of costs was for personnel (salaries, wages and overtime: 34% in HNGV, 47% in Baucau and 31% for Maliana, Oecusse and Suai.) It is expected that personnel costs at HNGV and Baucau would be higher than all other hospitals because of the speciality services delivered. The second largest cost item is drugs (between 10 and 18%) and other medical materials, including x-ray films, laboratory reagents and infusions (between 6% and 11%). Cost items depend on the level of health care provided. The costs of personnel are most important for the higher level referral hospitals (HNGV and Baucau). Drugs are almost equally important for all hospitals. Only in HNGV is the cost of drugs as a % of total costs lower than all other hospitals, this can be attributed to the low utilisation rate as well as the issue of stock out levels recorded for HNGV. However, the costs

25


of other medical consumables are highest in HNGV. They therefore do not show as high a correlation to utilisation as would be expected.

Repairs and maintenance expenditure, as a % of total costs is extremely low across all hospitals (between 1% to 5%), the accepted norm for repairs and maintenance is around 10% of total costs, again this result is in line with our findings that regular maintenance is not being carried out on medical equipment. For example HNGV has three x-ray machines, two of which have not worked for over 12 months, with the only working machine producing unreadable x-rays. Expenditure on building maintenance has been minimal during the 2006-07 financial year. This is understandable, as the new construction was taking place and the management made a decision to keep repairs to the bare minimum throughout all hospitals. In some cases this has had a detrimental effect on service delivery.

Training costs as a % of total costs range from 0.2% to 1%. It should be noted that the costs of scholarships, specialist training and in service training are funded directly through the MoH Central Services programme. The costs reflected in the budgets relate only to in-hospital training.

Table 6 Comparison of Major Recurrent Costs for Hospital Services (2007) USD$ 000, %


Valadares$000 %


$000 %


$000 %

Oecusse

Referral Hospital

$000%


$000 %

Personnel 1,263 (34%) 434 (47%) 125 (31%) 105 (31%) 130 (31%)

Drugs 389 (10%) 121 (13%) 77 (18%) 50 (15%) 59 (14%)

Other Medical Supplies

418 (11%) 77 (8%) 34 (8%) 20 (6%) 38 (9%)

Utilities 79 (2%) 2 (0.2%) 5 (1%) 7 (2%) 2 (0.5%)

Catering 381 (10%) 120 (13%) 40 (9%) 22 (7%) 41 (10%)

Maintenance 101 (3%) 11 (1%) 14 (3%) 17 (5%) 21 (5%)

Generator Fuel

46 (1%) 51 (6%) 37 (9%) 37 (11%) 38 (9%)

Training Expenses

8 (0.2%) 1 (0.1%) 4 (1%) 3 (0.8%) 1 (0.2%)

Sundry Expenses

227 (5%) 42 (5%) 27 (6%) 28 (8%) 32 (7%)

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4 Findings and Analysis – Hospital National Guido Valadares

4.1 Findings

4.1.1 Introduction

Hospital National Guido Valadares is located in the capital city Dili. The hospital has 264 beds. As stated in the BSP, HNGV acts as the national referral hospital, and as such should see only referral cases from other hospitals or health centres. However at the time of the writing of the BSP and during this study this policy has not been enforced and HNGV continues to provide primary health care services through the outpatient department.

A new hospital is currently being constructed on the existing site of HNGV; this has lead to a number of logistical issues for management as they are continuing to provide services whilst the construction is going on around them. Another issue for the hospital is the IDP’s which have taken up residency in and around the hospital grounds since the civil unrest in May 2006. Both of these factors have severely impacted upon the quality of care being provided to patients, to the point where there have at times been fighting in the hospital grounds between the IDP’s.

It is expected that the hospital construction will be completed in November 2008, whilst the Government is dealing with the IDP’s there is currently no information available as to how long the IDP camp will be situated within the National Hospital grounds.

HNGV is the only hospital in Timor-Leste which provides a VIP ward where inpatients have access to rooms with an ensuite. Inpatients are charged a daily rate to stay in the VIP ward. There are other small user fee charges for x-rays but these amounts are not material. The Government has determined that there will be no user charges for Health care in Timor-Leste in the foreseeable future.

A listing of the assumptions made during the study is attached at Appendix 2.

4.1.2Basic Activity Statistics

Table 7 below shows the basic activity statistics for the HNGV hospital. The overall occupancy rate totals 56%.

The overall average length of stay amounts to 4 days. The bed turnover amounts to 49 days per bed per annum.

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Table 7 Basic Activity Statistics by Patient Cost Centre (2007)

Surgical Ward

Internal Medicine Ward

Maternity Ward

Paediatrics Ward

Isolation Ward

ICU Ward

VIP Ward

Total

No. of Beds 72 44 34 55 28 5 26 264

No. of Available Bed Days

26,280 16,060 12,410 20,075 10,220 1,825 9,490 96,360

Outpatient Visits

34,464

No. of Inpatients

1,526 1,405 5,564 2,168 392 442 437 11,934

No. of Occupied Bed Days

14,101 9,290 8,429 13,380 5,353 1,165 2,108 53,646

Avg. Length of Stay (days)

9 7 1 6 14 3 5 4

BOR 54% 58% 67% 67% 52% 63% 22% 56%

Bed Turnover 21 32 164 39 14 88 17 49

4.1.3Total Costs

The total cost of operations for HNGV hospital is approximately USD$5.6 million per annum. This represents 62% of total hospital costs in Timor-Leste. This cost encompasses salary and wages, goods and services and annualised capital costs. Notionally free and donated items, such as medical supplies and medical professionals are included. Direct and indirect costs borne by patients – prescription goods purchased, travelling expenses, opportunity costs, etc. are not included.

Table 8 – Total Cost by Final Cost Centre

Final Cost Centre Total Cost - USD $ % of Total CostLaboratory 533,222 10%Diagnostic – Radiology 144,424 3%OPD 408,355 7%Emergency Dept 393,323 7%OT 639,983 11%Internal Medicine 542,728 10%Surgical 749,074 13%Maternity 677,410 12%Paediatric 600,160 11%Isolation 244,405 4%ICU 281,038 5%VIP 375,999 7%Grand Total 5,645,755 100%


Table 8 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 73% of the expenditure with outpatients taking 14% and diagnostic services (laboratory and radiology) taking the remaining 13%.

4.1.4 Total Costs – All Cost Centres

Costs for overhead and ancillary departments, have been allocated to the direct cost centres (patient costs) to determine the total final cost centre. Laboratory and Radiology Departments have been included as direct cost centres. Prior to their allocation the total costs for each department is shown in Table 9 below:

Table 9 – Total Costs all Cost Centres (Prior to Overhead Allocation)

Total Cost - All Centres Total Cost - USD $ % of Total CostGeneral Administration 389,862 6%Maintenance Department 179,604 3%Transport Department 253,788 5%Total Overhead 832,254 15%Domestic Services (Cleaning, Laundry & Security)

554,708 10%

Medical Records 163,388 3%Pharmacy 99,211 2%Forensic/Mortuary 62,450 1%Kitchen/Catering Department 401,772 7%Total Ancillary 1,281,529 23%Laboratory 426,437 8%Radiology 100,211 2%OPD 294,404 5%OT 523,369 9%Emergency Department 294,446 5%Internal Medicine 255,950 4%Surgical 334,989 6%Maternity 484,577 9%Paediatric 367,567 7%Isolation 55,549 1%VIP 168,477 3%ICU 234,996 4%Total Direct 3,540,972 63%Grand Total 5,645,755 100%

Prior to the allocation of overheads and ancillary costs the table above shows that overhead departments account for 15% of the total costs, ancillary departments account for 23% and direct/patient care departments account for 63% of total costs.

4.1.5Unit Costs – Inpatient & Outpatients

The overall average cost per bed day for HNGV is USD $54.19. The average cost per outpatient is USD $12.00. Table 10 below shows the average cost per unit for each direct cost centre:

29

Table 10 – Average Cost per Unit by Direct Cost Centre Final Cost Centre Total Cost

USD $Number of

Units *Unit Cost

$Laboratory 533,222 32,850 16.00Diagnostic – Radiology 144,424 14,624 10.00OPD 408,355 34,464 12.00Emergency Dept 393,323 36,053 11.00OT 639,983 2,073 309.00Internal Medicine 542,728 9,290 58.00Surgical 749,074 14,101 53.00Maternity 677,410 8,249 82.00Paediatric 600,160 13,380 45.00Isolation 244,405 5,353 46.00ICU 281,038 1,165 241.00VIP 375,999 2,108 178.00Grand Total 5,645,755

* Laboratory, Radiology - number of tests; OPD – number of visits; OT – number of operations; Wards – number of bed days

4.1.6Analysis by Line Item

The table below shows how the total cost for HNGV hospital is split between the different line items:

Table 11 – Total Recurrent Costs by Line Item 2007

Nature of Item Line Item Total - $ %

Recurrent

Salaries 1,263,151 34%Medicine 389,419 10%Medical Consumables 418,505 11%Catering 381,000 10%Cleaning & Laundry 456,018 12%Generator Fuel 45,906 1%R & M 101,463 3%Motor Vehicle 41,963 1%Utilities 79,728 2%Professional Services * 319,688 9%Security 62,400 2%Other 227,276 5%

Total Recurrent 3,740,611 100%

* Includes costs for RACS, UNFPA at cost

** Relates to costs paid by GoTL for Cuban Medical Brigade, the cost of salaries for Cuban Medical Brigade are included under the salary component.


4.1.7Salaries and Staffing Levels

Table 12 – Staff numbers by type of staff

Final Cost Centre

Doctors *

Nurses *

Midwifes Health Assistants

Technicians Other Total

Permanent 57 174 22 10 33 27 323

Temporary 15 38 10 3 10 49 125

Grand Total 72 212 32 13 43 76 448

* Includes 51 Cuban medical specialists, 10 Chinese doctors, 3 UNFPA specialists and 3 RACS specialists. Above table does not include outsourced catering, cleaning or laundry staff.

The % of salary costs for doctors and nurses is as follows:

Doctors 51% of total salary cost Nurses & midwives 36% of total salary costs

Table 13 – Staffing Levels - After allocation of time across cost centres Final Cost Centre Type

of Staff Staff

NumberNumber

of Units *Unit per Staff **

Laboratory Tech. 22 32,850 1,493 tDiagnostic – Radiology Tech 6 14,624 2,437 tOPD Doctor 20 34,464 1,723 pEmergency Dept Doctor 13 36,053 2,773 pOT Doctor 8 2,073 259 opInternal Medicine Doctor 4 44 11 bSurgical Doctor 4 72 18 bMaternity Midwives 32 2,506 78 dPaediatric Doctor 6 55 9 bICU Doctor 1 5 5 bGrand Total

* Number of tests, beds, patients, operations & deliveries** t = number of tests, p = number of patients, op = operations, b = per bed, d = deliveries

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4.1.8Medical Supplies

Medical supplies (drugs and consumables) represent 21% of the total recurrent costs. The allocation of medical supplies to each of the cost centre was determined based on an analysis of the distributions from the pharmacy. Table 14 below shows the allocation to each of the cost centres.

Table 14 – Allocation of medical supplies by Department

Final Cost Centre Drugs $

Consumables $

Total Cost $ %

Laboratory - 201,129 201,129 25%Diagnostic – Radiology

- 9,082 9,082 1%

OPD 57,278 9,795 67,073 8%Emergency Dept 37,505 26,166 63,671 8%OT 73,921 43,955 117,876 15%Internal Medicine 37,262 23,362 60,624 7%Surgical 68,595 38,712 107,307 14%Maternity 21,564 15,169 36,733 4%Paediatric 30,102 14,988 45,090 6%Isolation 11,266 4,841 16,107 2%ICU 28,392 18,023 46,415 6%VIP 23,533 13,283 36,816 4%Grand Total 389,419 418,505 807,922 100%


4.2 Analysis – HNGV

4.2.1 Basic Activity Statistics

Bed Occupancy Rate (BOR) and Average Length of Stay (ALOS)

HNGV is achieving an overall BOR of 56%. It is noted that the data collection processes for HNGV are not robust and this has had an impact on the results of this study. The international accepted norm for hospitals BOR is between 90% - 95% anything below this figure does not produce the optimal utilisation of staff and resources.

The overall average length of stay amounts to 4 days suggests that patients are not being kept in hospital for excessive periods, which has been noted as the norm in other hospitals in Timor-Leste. The international norm for a hospital similar to HNGV would be between 3 – 10 days, taking into account the more complex case-mix expected at the highest level of tertiary care.

As can be seen from table 7 the BOR for isolation ward is 22% which is well below the accepted norm and suggests that the isolation ward is not fully utilised. Seasonal and epidemiological reasons may account for this overall low BOR however it suggests that the number of beds, based on utilisation rates is too high and management should review the allocation of bed numbers to the isolation ward.

The maternity and paediatric ward are both achieving a BOR of 67% each. The average length of stay for maternity inpatients has been calculated as 1 day. This shows that the maternity ward is in line with the policy adopted by the Ministry of Health that women who have given birth are generally sent home the next day, this finding was the same throughout all hospitals in Timor-Leste. The average length of stay for paediatrics amounts to 6 days.

The surgical ward BOR is 54% with an average length of stay at 9 days. HNGV undertakes the largest amount of surgery in Timor-Leste. Anecdotal discussions suggest that doctors are reluctant to discharge patients and this has been supported by the high length of stay (9 days) for the surgical ward. The majority of the surgery cases relate to minor surgeries and would not justify this amount of stay. There is a financial as well as a patient care effect of over extending patients length of stay which can lead to inefficiencies.

The VIP ward BOR is 52% with an average length of stay of 14 days. The average length of stay is well beyond what would be considered an acceptable range both internationally and locally. Obviously the length of stay is determined by the case mix however as this is the only ward where users are charged for the services it may suggest that patients are dictating the length of stay rather than the medical professionals.

4.2.2 Total Costing

The outpatient department consumes 7% of the total costs. Whilst the BSP strongly recommends that referral hospitals do not see patients without a referral letter from a health centre this practice has not yet been adopted.

Medical records began to record the number of OPD who are referral patients from August 2007; no data prior to this date was available. Using the data available for August, September and October 2007 it was estimated that 39% of outpatients were not referral patients. This is a high percentage of outpatients who should be treated at a CHC

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prior to attending the hospital. This means that of the 34,464 outpatients 21,023 (61%) would have referral letters.

The net result of this is that the hospital is delivering primary health care services, which under the current MoH structure are funded through the District Health Services and not through hospitals. As noted above the analysis showed that of the total number of outpatients (34,464) 61% (21,023) had referral letters. Based on the estimate that 39% of the patients are non-referral then HNGV hospital is spending $159,258 or 3% of its funding on primary health care services. Whilst the 39% is a very arbitrary number it is expected that as the BSP is rolled out by the MoH patients and medical staff will become more aware of the referral system, however the MoH needs to review this situation and determine if a clinic should be set up on the hospital grounds which is funded through the District Health Services or funding for these services should be added to the hospital budget.

4.2.3 Unit Costs Outpatients and Inpatient

The overall average cost per bed day for HNGV is USD$97.63. On average, costs per day amount to 3% as a proportion of GNP per capita. GNP for Timor-Leste is around USD$450 per capita. The cost per bed for HNGV amounts to 22% of GNP. It is expected that HNGV would have a higher cost per inpatient due to the higher and more sophisticated range of services provided.

The average cost per outpatient at $11.84. This falls within the per capita range of $8.26 - $15.40 per the MTEF prepared by the MoH for Primary health care. As mentioned above 39% of outpatients are non-referral and therefore should be treated in CHC’s. The average cost for outpatients visit is usually between 0.5% and 1% of GNP per capita, with HNGV achieving 4%.

4.2.4 Individual Line Items

Salaries & Overtime

Salaries account for 34% of total recurrent costs which is consistent with other hospitals within Timor-Leste.



There are no accurate records maintained for the allocation of doctors time between OPD and IPD based on discussions and observations it was noted that between 5 – 10% of doctor’s time was spent in the OPD and between 5 – 10% in the emergency department.

Table 13 shows, after the allocations as noted during the study, the utilisation rate of key staff. The statistics show that doctors are attending 1,723 outpatients each per annum; this equates to 33 per week, and based on a 6 day working week 5.5 per day.

Whilst midwifes are attending 78 births per annum each, this equates to 1.5 per week per midwife. The maternity ward numbers are well above the average attendance of midwives in other referral hospital.

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The number of staff is higher than other referral hospitals, but this is to be expected due to the higher bed numbers, the higher population coverage as well as the more advanced level of services provided.

Medical Supplies

Medical supplies (drugs and consumables) represent 21% of the total recurrent costs, which is average for a hospital of this type. The allocation of medical supplies to each of the cost centre was determined based on an analysis of the distributions from the pharmacy over a month period, note these were taken from scraps of paper. Table xx above shows the allocation to each of the cost centres.

Medical supplies for Timor-Leste are provided through an EC grant and hospitals are currently not being charged for the supplies, this is expected to change from 2008 onwards. Hospitals receive the majority of their medical supplies from SAMES, however it was noted during the study that there have been a large number of stock outs of regular supplies, for example there has at time been no amoxicillin and no surgical gloves at certain times. Pharmacy staff advised that over the past 12 months there have been regular stock outs of up to 28 items at a time, and that it has been the norm rather than the exception that what is ordered is delivered. In the majority of cases there is an under supply of the items ordered, although occasionally the number of items delivered will be a lot more than what has been ordered. It was mentioned that there is little or no communication between SAMES and the hospital on the differences between items ordered and items delivered. The same was found for all hospitals in Timor-Leste. In some cases SAMES has been unable to deliver the supplies, due to lack of a vehicle or lack of fuel for a vehicle, therefore staff from the pharmacy, together with doctors and surgeons have at times gone to SAMES to collect the supplies needed. The hospital has also, through the central services at MoH procured emergency drugs from local pharmacists. These purchases are always at a higher cost than if supplied through SAMES.

The hospital had a pharmacist advisor who left 2 years ago. She had set up an inventory system for the pharmacy; however since her departure this has not been followed. Currently HNGV does not have a stock management system in place, in order to get medical supplies from the pharmacy, a department hand writes a request, generally on scraps of paper. There are no pre-printed order forms for medical supplies. The pharmacy department does not maintain any data regarding the amount or nature of items distributed to departments. No monthly summaries of the total number and cost of supplies distributed to each department is prepared, neither are there any regular stock counts taking place. Departments do maintain a small amount of supplies in the wards and these are regularly counted by the nursing staff, however there are no reports prepared. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.

Catering Supplies

Catering supplies amount to 10% of total costs. The hospital has outsourced the catering contract to a local company; the amount charged per adult patient per day is $3.64 and $3.29 per day for children’s meals. The hospital employs 3 nutritionists, who set the menus and provide quality control over the food. However it was noted that no reconciliation between the patient days and the number of meals being charged is undertaken. An analysis based on the number of adult and paediatric inpatient days suggests that the amount for catering for the 2006-07 financial year should be approximately USD$ 195,000, compared to the amount paid of $381,000. If we assume occupancy rate of 85% then the expected amount for catering rises to $320,000. The potential for wastage and overcharging in this area is very high, the Head of Administration and the Head of Logistics have advised that there has been no training on

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contract management for any of the staff in the hospital and this has left them in a difficult situation in managing both catering and cleaning contractors.

Equipment and Repairs & Maintenance

The cost of equipment has been calculated based on an inventory listing prepared by a Bio-Medical Engineer in 2004. The majority of the equipment in HNGV is very old and often not in a working condition and there has been little or no preventative maintenance done and no forward planning of regular repairs has been scheduled. New equipment is scheduled to arrive in March 2008, for the purposes of this review and the forward estimates the value of the new equipment lists have been used as the basis for equipment in each ward/department. The MoH is currently considering entering into a twinning arrangement with RACS to

develop a maintenance system for all hospitals across Timor-Leste.

Repairs and maintenance amount to 3% of total recurrent costs. This is an extremely low amount to spend on maintenance, however due to the new construction and the arrival of new equipment expected in March 2008 the hospital has kept maintenance expenditure to an absolute minimum. However, it was noted during the review that a large number of medical equipment was not functioning, for example HNGV has three X-Ray machines, two of these have not been working for over 12 months, whilst the third machine is producing unreadable X-Rays. The surgeons commented that the X-Rays are not useable. Whilst it is understandable to keep maintenance at a minimum while awaiting the new buildings and equipment the state of the current equipment has severely impacted upon the efficiency and effectiveness of service delivery at HNGV. The international accepted norm for the % of maintenance of equipment to total recurrent costs is 10%. It is essential that in the future years this figure increases to allow for adequate maintenance of the new hospital and equipment. The required amounts have been calculated in the forward estimates.

Cleaning & Laundry

Cleaning amounts to 12% of total recurrent costs. The cleaning and laundry services are outsourced to a local company who employ 110 persons, 9 in the laundry and 101 inside and outside cleaners. The salaries paid for cleaners are equivalent to Civil servant level 1. Hospital management have not at this stage determined the number of cleaners required for HNGV, neither have they set any standard protocols or guidelines for cleaning regimes. After discussions and consultation with hospital management it is considered that the following number of cleaners would be required for HNGV:

1 Cleaner per Ward, working 8 hour shift; 2 Cleaners for OT working two shifts; 4 Cleaners for Administration, Medical records, maintenance department,

kitchen and laundry; 2 Cleaners for OPD; 1 Cleaner for Laboratory; 1 Cleaner for Radiology; 1 Cleaner for Pharmacy; 1 Cleaner for Forensic 4 Grounds men.

The total number of cleaners needed based on the above standards would be 35 for HNGV. Based on the existing numbers there is an excess of 66 cleaners. There was no rationale explained for the high number of cleaners in HNGV, however through patient surveys, discussions with staff and general observations it was noted that the standard of cleanliness for HNGV was very poor, it was also advised that some departments have no cleaner at all, for example the pharmacy staff undertake their own cleaning. Anecdotal evidence states that there is no regular supply of cleaning materials being provided by the company to the cleaners, and they would use surgical gloves to clean toilets and wards,

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or in some cases cut up discarded patients clothes would be used as mops and rags. As noted in the discussion on catering, there are very limited contract management skills within hospital administration staff and this issue must be addressed to ensure that the hospital is receiving the appropriate services for the money spent and that managers have the necessary skills to manage their contractors.

4.2.5 Health Information – Medical Records

The majority of the patient data collected for inpatients during this study was obtained from the medical records department and individual wards. Data was recalculated to ensure accuracy of calculations and as such different numbers were reached. For example the laboratory data stated that there had been approximately 5,000,000 tests for the year, when in fact the total was 32,850. Each ward provides the medical records with an overnight count of patients (midnight stats) and this data is compiled by medical records and summarised and sent to the Director-General. Some issues noted in regards to the data are as follows:

The information collected is mainly being used to provide the quarterly statistics to the MoH. There are no clear formats or indicators which have been decided upon for internal use. Data is not disseminated to each department and is currently not used as a meaningful management tool. This is due to the lack of training of staff in understanding what data to collect; who this data should be given to and what it should be used for.

No clear definitions of the type of data to be recorded are in place. For example patients with trauma are recorded just as trauma regardless of the nature of the trauma, there is guidelines for how patient movements between specialities and wards are counted. Again management have developed their own system, which is a good start however they do need some guidelines to be set by MoH and for training in data collection to be provided.

Medical records staffs, including the Head of the Department have not had any training in data collection methods, types of data required, tools for analysis.

The data had up to September 2007, been compiled in a word document, requiring manual additions and calculations and thereby leading to errors in calculations;

The medical records department is operating with very old computer equipment, no computers are networked and it was found that the majority of the computers were full of viruses.

The Hospital has recently recruited an international doctor who is assisting the medical records department in developing criteria and guidelines for statistical information. In order to obtain meaningful data it is essential that standards are set for what data must be collected and that staff are given adequate training and resources to carry out their tasks.

4.2.6 Budgeting and Reporting Structure

As noted in the overall findings Timor-Leste operates a centralised system of financial management. Under this centralised system hospitals do not undertake their own financial transactions, aside from a small petty cash float. The HNGV does not have its own financial management system, all transactions for the hospital are entered into the whole of Government Freebalance system, and as such the hospital has very little control over the structure and reporting for its financial transactions. All procurement and payments for amounts over $1,000 are prepared by Ministry of Planning and Finance, including payment for all salaries. This centralised system has resulted in a number of inefficiencies for the hospital, such as:

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Inability to obtain meaningful financial reports for the hospital; Delays in processing of payments; Hospital management is not fully aware of the amount of expenditure per line

item as they will prepare the request to purchase and then they get no information as to the final cost, often the goods or service will arrive and sometimes nothing will happen;

Limited or little involvement in procurement of hospital goods and services; and

Limited information is provided by central services to the hospital on budget vs actual reporting.

The result of the system is that managers are operating without the relevant information to run the hospital. HNGV has a finance department, with a Head of Finance and three staff. Since the hospital legislation has been place finance staff prepare payment vouchers, these are then taken to the Treasury for processing. All procurement is still being carried out by the MoH.

The annual budget for the HNGV is being prepared by the finance department within the MoH. Current practice is that the Head of Finance from HNGV prepares a schedule of requirements, not in the format of a budget, and these schedules are presented to MoH finance department who will prepare the annual budget. The budget and all financial reporting for HNGV is done for the hospital as a whole, that is, there is no departmental budgeting or recording of transactions. In order to effectively manage the hospital it is necessary that budgets are prepared for each department within the hospital and a simple basis for allocating shared costs to each department is developed. During discussions with Department Heads it was noted that no manager at HNGV is aware of, or has even seen a budget for their department. Furthermore they were unable to state how much was being spent in their departments, they also commented that due to this many of their requests for items to be procured were being denied by the Finance department as they are told that there is no budget available.

4.2.7 VIP User Fees

As stated earlier the VIP ward at HNGV is the only hospital ward charging patients. The charge per day is USD$15.00. The total cost, after allocation of overhead costs, to run the VIP ward as per Table xx above amounts to $375,999 per annum. The revenue received amounts to approximately $60,000, thereby costing the HNGV $315,999 for the 2006-07 financial year. Based on the utilisation of the VIP ward, 392 patients admitted for a total of 5,353 bed nights the expected revenue would be approximately $80,000.

As the majority of patients staying in the VIP are internationals who can afford to pay for the privilege of a room with an ensuite bathroom it is recommended that the hospital management together with MoH review the user charges.

4.3 Patient Satisfaction Survey

A contributing factor to low utilisation of hospitals is user and communities’ perception of the quality of services delivered. As a central part of this study, a mini patient satisfaction survey was undertaken over a two week period in HNGV. In all 60 patients from 5 wards were interviewed and asked a series of questions regarding the features of the services they were receiving at HNGV.

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Overall it can be said that the majority of patients were satisfied with the service they received at HNGV, with 77% surveyed stating that they liked the hospital. 93% of the patients surveyed were seen by a doctor every day and 98% of those surveyed had been informed of their diagnosis and treatment procedures. 82% of those surveyed stated that a nurse came when they needed one and 90% of patients surveyed felt better since being in hospital.

Some of the common areas of complaints related to the IDP situation, the heat and the cleanliness, particularly of the ward toilets. 58% of patients surveyed had trouble sleeping, as noted above the major comment regarding sleeping was that patients felt unsafe due to the IDP’s being in and around the hospital grounds, this together with the heat was the major contributing factor to the lack of sleep. Only 62% of patients surveyed felt that the ward was clean and tidy, whilst 80% stated that the toilets were not in a clean state. Only 42% liked the bed that they were sleeping on, the most common complaint regarding the bed was that the mattress was not thick enough and therefore uncomfortable, 97% of patients surveyed had not slept under a bed net.

100% of the patients surveyed stated that they were receiving enough food and drinks and that they liked the food that they were receiving.

Whether they are technically right or wrong (in terms of the efficacy or cost effectiveness of services, the values and views of consumers ultimately constitute the moral and legal basis upon which the financing of public sector health care rests and they should be taken into account in provider decisions. Traditionally, decisions on the rationing of care have been seen as the prerogative of medical professionals although in fact rationing is the result of a combination of political, managerial and historical as well as clinical factors. Increasingly, as technology has expanded what is possible and as costs have risen, doctors are reluctant to be held accountable exclusively for rationing decisions and have demanded more explicit approaches to rationing. It is to be expected that, more and more, providers must seek the tacit or explicit approval of the consumer both in terms of national big issues and local situations. Providers should and will be increasingly required to seek systematic ways of obtaining patients views.

A copy of the survey questionnaire is attached at Appendix 3.

4.4 Conclusion and summary of findings and recommendations

All of the matters noted above impact on the efficiency and effectiveness of hospital services, the key findings and recommendations are summarised as:

Key Findings Results from the patient satisfaction survey noted that the majority of patients were

happy with the level of care and information provided by medical staff; Patient records and information systems are not being utilised to assist in

management decisions; Low utilisation rates; Centralised financial management systems has resulted in a lack of ownership of

financial management, including budgets; Lack of inventory management systems; Managers are not equipped with the tools to manage outsource providers; Repairs and maintenance for equipment and buildings is often done on an ad hoc

basis, with some equipment lying broken or idle for long periods of time.

Key Recommendations

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Hospital Package service team work with hospital management to review utilisation, including an estimate of future demands, determine protocols and guidelines for hospitals, including the development of a robust hospital information system;

Finance working group from MoH and hospitals work together to develop manuals, guidelines and determine an appropriate financial system for the hospital;

Inventory systems be developed to allow accurate monitoring and safeguarding of stock;

Procurement advisor at MoH provide guidance and training to logistics department on contract management issues;


A full list of recommendations for consideration to assist in addressing these matters can be found in the last section of this report. It is noted that many, if not all of the issues affecting HNGV are applicable to across all hospitals in Timor-Leste.

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5 Findings and Analysis - Baucau Referral Hospital 5.1Findings

5.1.1 Introduction

Baucau Referral Hospital is located in the district of Baucau approximately 3 hours drive from the capital Dili. The hospital has 114 beds and offers a higher level of services than other referral hospitals, due to the large catchment area and the number of specialists working within the hospital. Baucau Hospital currently services the populations of Baucau: 100,748; Lautem: 56,293 and Viqueque: 65,499; a total catchment population of 100,748.

A new 75 bed hospital, 39 beds less than the existing hospital, is being constructed in Baucau and is expected to be completed by late 2008. The new hospital is on a green field site and the construction will therefore, not impact upon the services of the existing hospital. The old hospital will close once the new hospital has been completed.

A listing of the assumptions made during the study is attached at Appendix 2.

5.1.2 Basic Activity StatisticsTable 15 below shows the basic activity statistics for the Baucau hospital. The overall occupancy rate totals 78.81%.

The overall average length of stay amounts to 9 days. The bed turnover amounts to 32 days per bed per annum.

Table 15 Basic Activity Statistics by Patient Cost Centre (2007)Surgical Ward


Maternity Ward

Paediatrics Ward

Isolation Ward

Total

Number of Beds 30 30 14 30 10 114

Number of Available Bed Days

10,950 10,950 5,110 10,950 3,650 41,610

Outpatient Visits 67,016

Number of Inpatients 522 592 1,221 936 345 3,616


11,297 8,864 3,592 9,041 1,380 34,174


22 15 3 10 4 9

Bed Occupancy Rate 87.42% 80.95% 70.29% 82.57% 47.26% 78.81%

Bed Turnover 23 27 49 28 35 32

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5.1.3 Total Costs

The total cost of operations for Baucau hospital is approximately USD$1.34 million per annum. This represents 15% of total hospital costs in Timor-Leste. This cost encompasses salary and wages, goods and services and annualised capital costs. Notionally free and donated items, such as medical supplies and medical professionals are included. Direct and indirect costs borne by the patients – prescription goods purchased, travelling expenses, opportunity costs etc are not included.


Final Cost Centre Total Cost - USD $ % of Total CostLaboratory 51,072 4%Diagnostic – Radiology 23,019 2%OPD 198,188 15%OT 104,635 8%Internal Medicine 227,161 17%Surgical 253,416 19%Maternity 185,514 14%Paediatric 216,675 16%Isolation 82,526 5%Grand Total 1,342,206 100%




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Total Cost - All Centres Total Cost - USD $ % of Total CostGeneral Administration 77,729 6%Maintenance Department 102,944 8%Transport Department 79,596 6%Kitchen/Catering Department 136,133 10%Total Overhead 396,402 30%Domestic Services (Cleaning, Laundry & Security)

58,409 4%

Medical Records 23,323 2%Pharmacy 56,138 4%Total Ancillary 137,870 10%Laboratory 37,085 3%Radiology 13,518 1%OPD 141,181 11%OT 87,783 7%Internal Medicine 139,814 10%Surgical 124,541 9%Maternity 127,655 9%Paediatric 98,347 7%Isolation 38,010 3%Total Direct 807,934 60%Grand Total 1,342,206 100%

Prior to the allocation of overheads and ancillary costs the table above shows that overhead departments account for 30% of the total costs, ancillary departments account for 10% and direct/patient care departments account for 60% of total costs.

5.1.5 Unit Costs – Inpatient & Outpatients

The overall average cost per bed day for Baucau is USD$33.48. The average cost per outpatient is USD $3.00. Table 18 below shows the average cost per bed day for each direct cost centre:


USD $Number of

Units *Unit Cost

$Laboratory 51,072 22,713 2.00Diagnostic – Radiology 23,019 4,459 5.00OPD 198,188 67,016 3.00OT 104,635 717 146.00Internal Medicine Ward 227,161 8,864 26.00Surgical Ward 253,416 11,297 22.00Maternity Ward 185,514 3,592 52.00Paediatric Ward 216,675 9,041 24.00Isolation Ward 82,526 1,380 60.00Grand Total 1,342,206


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5.1.6 Analysis by Line Item

The table below shows how the total cost for Baucau hospital is split between the different line items:



Recurrent

Salaries 434,743 47%Medicine 121,309 13%Medical Consumables 76,947 8%Catering 120,379 13%Generator Fuel 51,205 6%R & M 10,579 1%Motor Vehicle 39,556 4%Utilities 2,169 0.2%Professional Services * 25,807 3%Other 41,540 4.8%

Total Recurrent 924,234 100%

* Relates to costs paid by GoTL for Cuban Medical Brigade, the cost of salaries for Cuban Medical Brigade are included under the salary component.

5.1.7 Salaries and Staffing Levels

Baucau referral hospital has a total of 181 staff, including international doctors. The table below shows the breakdown of staff:


Final Cost Centre

Doctors *

Nurses *



Permanent 22 67 21 4 5 15 134

Temporary 5 6 - 3 - 33 47

Grand Total 27 73 21 7 5 48 181

* Includes 22 international doctors and specialists



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The table below shows the number of professional staff per direct cost centre, after adjusting for the allocation of time across each direct cost centre, i.e. the amount of time a doctor spends in OPD and IPD and then calculates the number of units per direct cost centre per the number of staff. E.g. there are 21 midwifes who each attend 171 births per annum each.

Table 21 – Staffing Levels

Final Cost Centre Type of Staff

Staff Number

Number of Units *

Unit per Staff

Laboratory Tech. 4 22,713 5,678Diagnostic – Radiology

Tech 2 4,459 2,229

OPD Doctor 6.5 67,016 10,310OT Doctor 3 717 239Internal Medicine Ward

Doctor 1.5 8,864 5,909

Surgical Ward Doctor 1.5 11,297 7,531Maternity Ward Midwife 21 3,592 171Paediatric Ward Doctor 2 9,041 4,520Isolation Ward Doctor .5 1,380 2,760

* Number of tests, beds, patients, operations & deliveries

5.1.8 Medical Supplies

Medical supplies (drugs and consumables) represent 21% of the total recurrent costs. The allocation of medical supplies to each of the cost centre was determined based on an analysis of one month distribution from the pharmacy. Table 22 below shows the allocation to each of the cost centres.



Consumables $

Total Cost $ %


- 1,582 1,582 1%

OPD 22,798 9,322 32,120 16%OT 15,203 10,119 25,322 13%Internal Medicine Ward

21,478 12,394 33,872 17%

Surgical Ward 27,465 10,672 38,137 19%Maternity Ward 8,148 3,704 11,852 6%Paediatric Ward 20,818 9,770 30,588 15%Isolation Ward 5,399 2,964 8,363 5%Grand Total 121,309 76,947 198,256 100%

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5.2 Analysis – Baucau Referral Hospital

5.2.1 Activity Statistics – Bed Occupancy Rate (BOR) & Average Length of Stay (ALOS)

Baucau referral hospital is achieving an overall occupancy rate of 79%. According to internationally accepted hospital norms for hospitals, anything less than 90% - 95% occupancy level jeopardises efficient utilisation of staff and resources and the inverse suggests anything over 95% can have a negative impact on efficiency as staff and resources are often overloaded with work. The data suggests that Baucau is operating at below optimal level, particularly with the average length of stay being 9 days. In order to analyse and compare the utilisation rate we should look at the case mix of the hospital.

As can be seen from table 15 the BOR for paediatrics is one of the highest and in relation to accepted norms has reached its optimal level, with an occupancy rate of 82%. This high BOR has placed an undue stress and pressure on hospital staff.

The maternity ward has a high BOR compared to other hospitals; however it is still below the upper limit of efficiency (95%). The average length of stay for women in the maternity ward is 3 days, which is above the norm for other hospitals in Timor-Leste.

The surgical ward BOR is 87%. This, again, suggests that there may be undue pressure on staff and resources. The high BOR is a reflection of the high number of operations being performed in Baucau, compared to other referral hospitals.

The overall average length of stay amounts to 9 days which is the highest ALOS for any hospital in Timor-Leste and as noted above accounts for the higher occupancy rate. Discussions suggest that this is due to the high number of surgical cases compared to other hospitals; however it also suggests that patients are being kept in hospital for excessive periods.

5.2.2 Total Costs of hospital

The total cost of operations for Baucau hospital amounts to $1,342,206. Baucau is receiving 15% of the total hospital costs. Table 16 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 79% of the expenditure with outpatients taking 15% and diagnostic services (laboratory and radiology) taking the remaining 6%.

The outpatient department consumes 15% of the total costs. This is somewhat lower than other hospitals, particularly as there is no other Community Health Centre in the city of Baucau. Whilst the BSP strongly recommends that referral hospitals do not see patients without a referral letter from a health centre this practice has not yet been adopted. In fact it is extremely difficult for the hospital OPD to turn outpatients away as the closest health centre is approximately 3 kilometres away. It is not practical to send sick patients, often without any transport to the health centre.

Data is not maintained in Baucau as to the number of referral patients attending the OPD. It was estimated through an analysis and discussions with staff, of OPD that the percentage of referral patients was only 10%. This is extremely low and should not be used as a funding basis for the hospital, although if we use this figure as an estimate then we see that of the 67,016 outpatients only 6,702 would have referral letters.

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The financial impact of this is on the hospital funding could be quite severe, as essentially the OPD is delivering primary health care services, which under the current MoH structure are funded through the District Health Services and not through hospitals. As noted above the analysis showed that of the total number of outpatients (67,016) only 10% (6,702) may have had referral letters. Based on the estimate that 90% of the patients are non-referral then Baucau hospital is spending $178,369 or 13% of its funding on primary health care services. Whilst this is a very arbitrary number if we assume 50% of outpatients are non-referral then the figure becomes $99094 or 7% of total expenditure, this is still a significant sum. It is expected that as the BSP is rolled out by the MoH patients and medical staff will become more aware of the referral system, however the MoH needs to review this situation and determine if a clinic should be set up on the hospital grounds which is funded through the District Health Services or funding for these services should be added to the hospital budget.

5.2.3 Unit Costs – Inpatients & Outpatients

The overall average cost per bed day for Baucau is $33.48. On average, costs per bed day amount to 3% as a proportion of GNP per capita. The cost per bed day for Maliana Hospital amounts to 6% of GNP.

The average cost per outpatient is USD$3.00. This is well below the per capita range of $8.26 - $15.40 per the MTEF prepared by the MoH for Primary health care. The low cost is due to the higher number of outpatients presenting to the OPD. As mentioned above the majority of outpatients appear to be primary health care visits.

The unit cost for the OT is low compared to other referral hospitals, at $146.00 and can, in part be attributed to the number of operations carried out while there was a surgeon in the hospital.

Overall the unit costs suggest that Baucau may be under funded when compared with other referral hospitals, and taking into account the higher range of services being offered. It would be fair to assume that due to the higher range of services offered the costs would be higher than the other referral hospitals.

5.2.4 Expenditure on individual line items

Salaries & Wages

Salaries account for 47% of total recurrent costs which is higher than other referral hospitals, the high % can be contributed to the fact that over and above the Cuban Medical professionals and the national doctors, there is an additional three international specialists working at Baucau hospital, whose remuneration is a lot higher than the other medical professionals. This skews the amount of salaries and wages for Baucau Hospital.

Table 21 above shows the number of staff per unit of service, after allocations across departments have been made. The statistics show that doctors are attending 10,310 outpatients each per annum; this equates to 198 per week, and based on a 6 day working week 33 per day.

Whilst midwifes are attending 171 births per annum each, this equates to 3.2 per week per midwife. The maternity ward numbers are well above the average attendance of midwives in other referral hospital.

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The number of staff is higher than other referral hospitals, but this is to be expected due to the higher bed numbers, the higher population Baucau hospital services as well as the more advanced level of services provided.

Medical Supplies

Medical supplies amount to 21% of total recurrent costs, which is in line with other hospitals in Timor-Leste. However there are issues surrounding the recording of the distribution and particularly wastage as noted below.

Medical supplies for Timor-Leste are provided through an EC grant and hospitals are currently not being charged for the supplies, this is expected to change from 2008 onwards. Hospitals receive the majority of their medical supplies from SAMES, however it was noted during the study that it is the norm rather than the exception that what is ordered is delivered. In the majority of cases there is an under supply of the items ordered, although occasionally the number of items delivered will be a lot more than what has been ordered. It was mentioned that there is little or no communication between SAMES and the hospital on the differences between items ordered and items delivered. The same was found for all hospitals in Timor-Leste.

The hospital does not have a stock management system in place, in order to get medical supplies from the pharmacy, a department hand writes a request, generally on scraps of paper. There are no pre-printed order forms for medical supplies. The pharmacy department does not maintain any data regarding the amount or nature of items distributed to departments. In fact the pharmacy department does not have a computer. No monthly summaries of the total number and cost of supplies distributed to each department is prepared, neither are there any regular stock counts taking place. Departments maintain a small amount of supplies in the wards and these are regularly counted by the nursing staff, however there are no reports prepared. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.

Catering Supplies

Catering supplies amount to 13% of total costs which is above average compared to other hospitals. The hospital has outsourced the catering contract to a local company; the amount charged per adult patient per day is $3.00 for both adults and children meals. The hospital employs 1 nutritionist, who sets the menus and provides quality control over the food. However it was noted that no reconciliation between the patient days and the number of meals being charged is undertaken. An analysis based on the number of adult and paediatric inpatient days suggests that the amount for catering for the 2006-07 financial year should be approximately USD$ 102,522, compared to the amount paid of $120,379. The variance has explained due to additional meals served, the variance amounts to an additional 5,952 meals per annum. The potential for wastage and overcharging in this area is very high, the Head of Administration has advised that there has been no training on contract management for any of the staff in the hospital and this has left them in a difficult situation in managing both catering and cleaning contractors.

Repairs & Maintenance

Repairs and maintenance amount to 1% of total recurrent costs. This is extremely low and it is estimated that the amount should be around 10% of total recurrent costs. However the low expenditure for the 2007 fiscal year can be attributed to the fact that a new hospital is being constructed and as such building maintenance on the old building has been kept to a minimum. Although it would be expected that general maintenance would still be required as the new hospital is not due for completion until late 2008. An analysis of the repairs and maintenance expenditure revealed that it was only the

48


generator which had been serviced during the year; no maintenance has been performed on medical equipment. In order to keep equipment in good working order it is essential that in the future years this figure increases to allow for regular scheduled maintenance of the new hospital and equipment. The required amounts have been calculated in the forward estimates.


Baucau hospital is the only referral hospital, outside of Maliana, which is analysing the statistical data and preparing monthly reports for management. Statistics reports are prepared showing the number of cases, the number of births, and ratio of patients to nurses and doctors, bed occupancy rates, average length of stay etc.

It is pleasing that the management of Baucau hospital are preparing and using statistical data, particularly as Baucau has a high utilisation, even higher utilisation rate than HNGV.

The majority of the patient data collected for inpatients during this study was obtained from the data compiled by the hospital with a checking back to the hand written books maintained by the medical records department. The books record information for each patient, including name, sex, age, village, admission date, diagnosis, discharge date and information regarding deaths. The reliability of the data is dependent upon the medical records officer logging each patient in the book; checks on the accuracy of the data were carried out during each visit to the hospital. Some issues noted in regards to the statistical information are as follows:

Discussions with management revealed that they have not been given any formats or guidelines from MoH on the collection and analysis of data. Accordingly questions such as the following remain unanswered: What data should be collected? How should the data be used? How often should it be compiled? Who should be given the data?

Discussions revealed that medical record staff member has had no training in either data collection, analysis or file management.

No clear definitions of the type of data to be recorded are in place. For example patients with trauma are recorded just as trauma regardless of the nature of the trauma. Again management have developed their own system, which is a good start however they do need some guidelines to be set by MoH and for training in data collection to be provided.


Under the current structure the budget for Baucau hospital is compiled at the very top level, i.e. there is no departmental budgeting. This is the same across all hospitals. The hospital management have very little input into the preparation of the budget.

As noted in the overall findings Timor-Leste operates a centralised system of financial management. Under this centralised system hospitals do not undertake their own financial transactions, aside from a small petty cash float. All procurement and payments for amounts over $1,000 are prepared by central services MoH, including payment for all salaries. This centralised system has resulted in a number of inefficiencies for the hospital, such as:

Budgets are prepared by central services at MoH with little or no input from hospital managers;

Limited information is provided by central services to the hospital on budget vs actual reporting;

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Hospital management is not fully aware of the amount of expenditure per line item. When the hospital requires goods and services which are expected to cost over $1,000 they will send a request to Central Services, goods will be procured and delivered to the hospital, however no information on the total cost is provided to the hospital;

A number of delays are noted in the provision of goods and services due to the centralised system. Often items requested will not arrive or in some instances may take up to six months;

Freebalance system is used for recording financial transactions, which is a whole of government system and therefore there is limited flexibility to set up the reporting structure for the hospital.

The result of the current system is that managers are operating without the relevant information available in order to allow them to make informed decisions.



Key Findings Patient records and information systems are being utilised to assist in management

decisions; High average length of stay compared to other hospitals in Timor-Leste and above

the target rate set by the MoH; Referral system as adopted by the MoH has not been fully implemented; Centralised financial management systems has resulted in a lack of ownership of

financial management, including budgets; Lack of resources to manage inventory systems; Repairs and maintenance for equipment and buildings is often done on an ad hoc


Key Recommendations Hospital Package service team work with hospital management to review utilisation,

including an estimate of future demands, review the practicalities of the referral system, determine protocols and guidelines for hospitals, including the development of a robust hospital information system;


Inventory systems be developed to allow accurate monitoring and safeguarding of stock, including the provision of adequate tools for staff i.e. Computers and training;


A full list of recommendations for consideration to assist in addressing these matters can be found in the last section of this report. It is noted that many, if not all of the issues affecting Baucau Referral Hospital are applicable to across all hospitals in Timor-Leste.

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6 Findings and Analysis - Maliana Referral Hospital

6.1 Findings

6.1.1 Introduction

Maliana Referral Hospital is located in the district of Bobonaro approximately 4 hours drive from the capital Dili. The hospital has 24 beds. Maliana Hospital currently services the population of Bobonaro, which is 83,579.

A new hospital has recently been completed in Maliana, however at the time of this study services were being provided at the old hospital. It is expected that staff and patients will relocate to the new hospital early December 2007.


Table 23 below shows the basic activity statistics for the Maliana hospital. The overall occupancy rate totals 57.44%.

The overall average length of stay amounts to 5 days per bed per annum.


Surgical Ward


Maternity Ward

Paediatrics Ward

Isolation Ward

Total

Number of Beds 6 6 4 6 2 24


2,190 2,190 1,460 2,190 730 8,760


Number of Inpatients 319 267 519 497 36 1,638


957 888 498 4,888 321 7,552


3 3 1 10 9 5

Bed Occupancy Rate 65.55% 60.82% 74.93% 167.40% 43.97% 99.26%

Bed Turnover 53 45 130 83 18 68

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6.1.3 Total Costs

The total cost of operations for Maliana hospital is approximately USD$756,148. This represents 8% of total hospital costs in Timor-Leste. This cost encompasses salary and wages, goods and services and annualised capital costs. Notionally free and donated items, such as medical supplies and medical professionals are included. Direct and indirect costs borne by the patients – prescription goods purchased, travelling expenses, opportunity costs etc are not included.


Final Cost Centre Total Cost - USD $ % of Total CostLaboratory 35,895 5%Diagnostic – Radiology 34,946 5%OPD 176,881 23%OT 82,931 11%Internal Medicine 88,932 12%Surgical 86,522 11%Maternity 63,220 8%Paediatric 135,299 18%Isolation 51,522 7%Grand Total 756,148 100%






Total Cost - All Centres Total Cost - USD $ % of Total CostGeneral Administration 94,235 12%Maintenance Department 100,725 13%Transport Department 43,118 6%Kitchen/Catering Department 55,051 7%Total Overhead 293,129 39%Domestic Services (Cleaning, Laundry & Security)

44,859 6%

Medical Records 11,161 1%Pharmacy 16,348 2%Total Ancillary 72,368 10%Laboratory 21,054 3%Radiology 17,564 2%OPD 129,783 17%OT 39,436 5%Internal Medicine 48,015 6%Surgical 38,891 5%Maternity 42,186 6%Paediatric 38,972 5%Isolation 14,750 2%Total Direct 390,651 51%Grand Total 756,148 100%

Prior to the allocation of overheads and ancillary costs the table above shows that overhead department accounts for 39% of the total costs, ancillary departments account for 10% and direct/patient care departments account for 51% of the total cost.


The overall average cost per bed day for Maliana is $76.70. The average cost per outpatient is $3.00. Table 26 below shows the average cost per unit for each direct cost centre:


USD $Number of

Units *Unit Cost

$Laboratory 35,895 9,519 4.00Diagnostic – Radiology 34,946 4,074 9.00OPD 176,881 52,209 3.00OT 82,931 219 379.00Internal Medicine Ward 88,932 888 100.00Surgical Ward 86,522 957 90.00Maternity Ward 63,220 1,641 39.00Paediatric Ward 135,299 4,888 28.00Isolation Ward 51,522 321 161.00Grand Total 756,148


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The table below shows how the total cost for Maliana hospital is split between the different line items:



Recurrent

Salaries 124,619 31%Medicine 77,432 18%Medical Consumables 33,840 8%Catering 39,297 9%Generator Fuel 37,483 9%R & M 13,526 3%Motor Vehicle 33,318 8%Utilities 4,724 1%Professional Services * 25,435 6%Training 3,798 1%Other 26,900 6%




Maliana referral hospital has a total of 65 staff, including international doctors. The table below shows the breakdown of staff:


Final Cost Centre

Doctors *

Nurses *



Permanent 7 11 8 2 5 14 47

Temporary 1 4 1 - 1 12 18

Grand Total 8 15 9 2 6 26 65

* Includes 5 Cuban doctors and specialists,4 Cuban nurses

The number of staff is in line with other referral hospitals throughout Timor-Leste, but in order to determine whether these numbers are adequate we need to look at both staff mix and utilisation. The % of salary costs for doctors and nurses is as follows:



The table below shows the number of professional staff per direct cost centre, after adjusting for the allocation of time across each direct cost centre, i.e. the amount of time a doctor spends in OPD and IPD and then calculates the number of units per direct cost centre per the number of staff. E.g. there are 8 midwifes who each attend 205 births per annum each.

Table 29 – Staffing Levels Final Cost Centre

Type of Staff

Staff Number

Number of Units *

Unit per Staff


Tech 3 4,074 1,358

OPD Doctor 3.5 52,209 14,916OT Doctor 1 219 219Internal Medicine Ward

Doctor 1.5 888 592

Surgical Ward Doctor 1.5 957 638Maternity Ward Midwife 8 1,641 205Paediatric Ward Doctor 1 4,888 4,888Isolation Ward Doctor .5 321 642






Consumables $

Total Cost $ %

Laboratory - 10,912 10,912 10%Diagnostic – Radiology -

2,867 2,867 3%

OPD 36,643 4,179 40,822 37%OT 4,494 1,575 6,069 5%Internal Medicine Ward 13,312 4,712 18,024 16%Surgical Ward 3,277 1,453 4,730 4%Maternity Ward 4,951 2,544 7,495 7%Paediatric Ward 12,637 5,269 17,906 16%Isolation Ward 2,118 1,054 3,172 2%Grand Total 77,432 33,840 111,272 100%

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6.2 Analysis – Maliana Referral Hospital

6.2.1 Activity Statistics – Bed Occupancy Rate (BOR) & Average Length of Stay (ALOS)

Maliana Hospital is achieving an overall BOR of 99%. This is the highest level of BOR for any hospital in Timor-Leste. According to internationally accepted hospital norms for hospitals, anything less than 90% - 95% occupancy level jeopardises efficient utilisation of staff and resources. The data suggests that Maliana is overloaded with an occupancy rate of 99.26%. In order to analyse and compare the utilisation rate we should look at the case mix of the hospital.

As can be seen from table 23 the BOR for paediatrics is the highest and is severely overloaded with an occupancy rate of 167.40% i.e. patients had to stay in other wards as well as placing a large number of beds in the paediatrics ward, leading to overcrowding. This high BOR places an undue stress and pressure on hospital staff.

The maternity ward has a high BOR compared to other hospitals. Again this is in line with the findings from our visit to the hospital. The average length of stay for women in the maternity ward is 1 day, which is indicative of the situation in Timor-Leste where women are generally sent home the day after giving birth, this finding was the same throughout all hospitals in Timor-Leste.

The surgical ward BOR is 65.55%. During the financial year under review Maliana hospital had a Cuban surgeon on staff, however the surgeon left in August 2007 and has not been replaced. This has lead to a severe reduction in the number of operations and surgical cases. Hospital management have advised that they have requested a replacement surgeon; however they have little control over the specialists which are sent to work in their hospital.

The overall average length of stay amounts to 5 days which suggests that patients are not being kept in hospital for excessive periods, which has been noted as the norm in other hospitals in Timor-Leste.

6.2.2 Total Costs

The total cost of operations for Maliana hospital amounts to $756,148. Table 24 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 67% of the expenditure with outpatients taking 23% and diagnostic services (laboratory and radiology) taking the remaining 10%.

The outpatient department consumes 23% of the total costs. Whilst the BSP strongly recommends that referral hospitals do not see patients without a referral letter from a health centre this practice has not yet been adopted. In fact it is extremely difficult for the hospital OPD to turn outpatients away as there is currently no Community Health Centre operating in Maliana. It is not practical to send sick patients, often without any transport to the nearest health centre, which is in the sub-district.

Data is not maintained in Maliana as to the number of referral patients attending the OPD. It was estimated through discussions with doctors and administrators that 60% of patients attending outpatient department are non-referral patients. This is extremely low and should not be used as a funding basis for the hospital, although if we use this figure as an estimate then we see that of the 20,439 outpatients only 613 would have referral letters.

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There is a large financial impact on the hospital, as essentially the OPD is delivering primary health care services, which under the current MoH structure are funded through the District Health Services and not through hospitals. As noted above the analysis showed that of the total number of outpatients (52,509), 60% are non-referral (31,505) patients. Based on the estimate that 60% of the patients are non-referral then Maliana hospital is spending $106,129 or 14% of its funding on primary health care services. As well as the financial impact there is also the added burden of workload on the staff at the hospital which has an impact on the efficiency and effectiveness of the hospital. It is expected that as the BSP is rolled out by the MoH patients and medical staff will become more aware of the referral system, however the MoH needs to review this situation and determine if a clinic should be set up on the hospital grounds which is funded through the District Health Services or funding for these services should be added to the hospital budget.

6.2.3 Unit Costs Outpatients & Inpatients

The average cost per outpatient is USD$3.00. This is well below the per capita range of $8.26 - $15.40 per the MTEF prepared by the MoH for Primary health care. The low cost is due to the higher number of outpatients presenting to the OPD. As mentioned above the majority of outpatients appear to be primary health care visits.

The overall average cost per bed day for Maliana is $76.70. On average, costs per bed day amount to 3% as a proportion of GNP per capita. The cost per bed day for Maliana Hospital amounts to 17% of GNP.

The unit cost for the OT is low compared to other referral hospitals, at $379.00 and can be attributed to the number of operations carried out while there was a surgeon in the hospital.

The unit cost for the isolation ward is $161.00, which is extremely high compared to other referral hospitals; again the reason for this is the low number of cases presented to Maliana hospital.

6.2.4 Expenditure on Individual Line Items

Salaries & Wages

Salaries account for 31% of total recurrent costs which is consistent with other hospitals within Timor-Leste a detailed review of the salaries is below.

Table 29 above shows the number of staff per unit of service. The statistics show that doctors are attending 14,916 outpatients each per annum; this equates to 286 per week, and based on a 6 day working week 47 per day. It was noted through discussions that the Cuban General Practitioners work only in the OPD, together with National Doctors spending 50% of their time in OPD.

Whilst midwifes are attending 205 births per annum each, this equates to 3.9 per week per midwife. The maternity ward numbers have increased over the past three years, and with the donation of an obstetrics ambulance from the Rotary club, which brings women to the hospital the numbers are expected to continue to rise. They are also well above the average attendance of midwives in other referral hospital. Discussions with hospital management revealed that it is only the National doctors who are on-call. As there are only three national doctors, one of which is the general director the work-load is extremely high for each doctor.

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Medical Supplies

Medical supplies amount to 26% of total recurrent costs, which is a little higher than the average, which is to be expected as the number of patients seen is higher than other hospitals. However there are issues surrounding the recording of the distribution and particularly wastage as noted below.

Medical supplies for Timor-Leste are provided through an EC grant and hospitals are currently not being charged for the supplies, this is expected to change from 2008 onwards. Hospitals receive the majority of their medical supplies from SAMES, however it was noted during the study that it is the norm rather than the exception that what is ordered is delivered. In the majority of cases there is an under supply of the items ordered, although occasionally the number of items delivered will be a lot more than what has been ordered. It was mentioned that there is little or no communication between SAMES and the hospital on the differences between items ordered and items delivered. It was noted that hospital staff travel to Dili to collect medical supplies from SAMES as goods are not being delivered on a regular basis from SAMES.

The hospital currently does not have a stock management system in place, in order to get medical supplies from the pharmacy, a department hand writes a request, generally on scraps of paper. There are no pre-printed order forms for medical supplies. The pharmacy department does not maintain any data regarding the amount or nature of items distributed to departments. No monthly summaries of the total number and cost of supplies distributed to each department is prepared, neither are there any regular stock counts taking place. Departments do maintain a small amount of supplies in the wards and these are regularly counted by the nursing staff, however there are no reports prepared. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.

Catering Costs

Catering supplies amount to 9% of total costs which is in line with the average of other hospitals in Timor-Leste.

The catering contract entered into by the Government of Timor-Leste does not state the individual cost per meal, it includes the menu for meals as prepared by MoH nutrition department. The cost in the contract amounts to $2,390.40 per month, however there is no information or criteria to determine how this amount was calculated. Furthermore the amount being paid is a lump sum, rather than based on deliverables, i.e. the number of meals served daily.

A detailed analysis of the catering costs shows that based on the number of patient days the cost per meal is $5.20. However there is no accounting for the lower cost of meals for children versus adults.


Repairs and maintenance amount to 3% of total recurrent costs. This is quite low and it is estimated that the amount should be around 10% of total recurrent costs. However the low expenditure for the 2007 fiscal year can be attributed to the fact that a new hospital was being constructed and as such building maintenance on the old building has been kept to a minimum. New equipment is also being purchased and is expected to arrive in March 2008. Unlike other referral hospitals Maliana hospital existing equipment was all in good working order. However 3% is extremely low for repairs and maintenance and it is essential that in the future years this figure increases to allow for adequate maintenance

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of the new hospital and equipment. The required amounts have been calculated in the forward estimates.


Maliana hospital is the only referral hospital, outside of Baucau, which is analysing the statistical data and preparing monthly reports for management. Statistics reports are prepared showing the number of cases, the number of births, and ratio of patients to nurses and doctors, bed occupancy rates, average length of stay etc.

The data is compiled for the hospital overall and is not yet broken down by wards. In order to get the information required for this report the data for each ward was taken from the hand written books maintained by the medical records department. The books record information for each patient, including name, sex, age, village, admission date, diagnosis, discharge date and information regarding deaths. The reliability of the data is dependent upon the medical records officer logging each patient in the book; checks on the accuracy of the data were carried out during each visit to the hospital.

It is pleasing that the management of Maliana hospital are preparing and using statistical data, particularly as Maliana is the highest utilised hospital of all referral hospitals, even higher utilisation rate than HNGV. Accordingly it is recommended that Maliana hospital be used as the champion hospital for statistical data and reporting for other hospitals.


Under the current structure the budget for Maliana hospital is compiled at the very top level, i.e. there is no departmental budgeting. This is the same across all hospitals. The hospital management have very little input into the preparation of the budget.

As detailed above Maliana hospital has the highest utilisation rate of any referral hospital, however it is somewhat surprising to see that the % of hospital budget received by Maliana is in line with other referral hospitals, in fact for the 2008 budget, Maliana is receiving the lowest allocation amongst hospitals. Management are somewhat dispirited by this fact and have not been able to obtain a reasonable explanation as to why they appear to be financially penalised.





Motor vehicles requiring repair work must be taken to Dili; A number of delays are noted in the provision of goods and services due to

the centralised system. Often items requested will not arrive or in some instances may take up to six months;

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Key Findings Patient records and information systems are being utilised to assist in management

decisions; High utilisation rates are placing pressures on the staff and resources of the hospital; Paediatrics ward is seriously stressed with 167% occupancy, with paediatric beds

being placed in corridors and other wards when needed; Referral system as adopted by the MoH has not been fully implemented; Centralised financial management systems has resulted in a lack of ownership of

financial management, including budgets; Centralised contracting places constraints on the provision of goods and services to

the hospital; Repairs and maintenance for equipment and buildings is often done on an ad hoc






Procurement Unit of MoH provide guidance and training in the decentralisation of procurement;


A full list of recommendations for consideration to assist in addressing these matters can be found in the last section of this report. It is noted that many, if not all of the issues affecting Maliana Referral Hospital are applicable to across all hospitals in Timor-Leste.

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7 Findings and Analysis - Oecusse Referral Hospital

7.1 Findings

7.1.1Introduction

Oecusse Referral Hospital is located in the enclave district of Oecusse approximately 10 -12 hours drive from the capital Dili. Oecusse is accessible by road through West Timor, Indonesia, weekly by the ferry and recently by UN and private charter flights. The hospital has 24 beds. Oecusse Hospital currently services the population of Oecusse, which is 57,616.

A new hospital has recently been completed in Oecusse, however at the time of this study services were being provided at the old hospital. It is expected that staff and patients will relocate to the new hospital on 1 December 2007.


Table 32 below shows the basic activity statistics for the Oecusse hospital. The overall occupancy rate totals 57.44%.

The overall average length of stay amounts to 4 days. The average bed turnover amounts to 49 days per bed per annum.


Surgical Ward


Maternity Ward

Paediatrics Ward

Isolation Ward

Total



730 3,650 1,460 2,190 730 8,760




331 2,600 365 1,106 630 5,032


4 6 1.5 3 8 4

Bed Occupancy Rate 45% 71% 25% 50% 86% 57%

Bed Turnover 44 45 63 54 40 49

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7.1.3 Total Costs

The total cost of operations for Oecusse hospital is approximately USD$634,000. This represents 8% of total hospital costs in Timor-Leste. This cost encompasses salary and wages, goods and services and annualised capital costs. Notionally free and donated items, such as medical supplies and medical professionals are included. Direct and indirect costs borne by the patients – prescription goods purchased, travelling expenses, opportunity costs etc are not included.


Final Cost Centre Total Cost - USD $ % of Total CostLaboratory 44,967 7.0%Diagnostic – Radiology 29,285 4.6%OPD 159,270 25.1%OT 107,943 17.0%Internal Medicine 86,510 13.6%Surgical 43,821 6.9%Maternity 60,930 9.6%Paediatric 65,125 10.3%Isolation 36,991 5.9%Grand Total 634,841 100%

Table 33 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 63.3% of the expenditure with outpatients taking 25.1% and diagnostic services (laboratory and radiology) taking the remaining 11.6%.



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Total Cost - All Centres Total Cost - USD $ % of Total CostGeneral Administration 46,504 14.8%Maintenance Department 194,634 61.3%Transport Department 36,902 11.7%Kitchen/Catering Department 34,983 12.2%Total Overhead 313,023 49.3%Domestic Services (Cleaning, Laundry & Security)

27,331 53%

Medical Records 12,103 24%Pharmacy 11,318 23%Total Ancillary 50,752 8.0%Laboratory 25,972 9.5%Radiology 16,192 6%OPD 66,906 24.7%OT 40,974 15.1%Internal Medicine 37,246 13.7%Surgical 15,082 5.6%Maternity 26,910 9.9%Paediatric 27,705 10.2%Isolation 14,077 5.3%Total Direct 271,066 42.7%Grand Total 634,841 100%

Prior to the allocation of overheads and ancillary costs the table above shows that overhead departments account for 49.3% of the total costs, ancillary departments account for 8% and direct/patient care departments account for 63% of total costs.


The overall average cost per bed day for Oecusse is USD$94.51. The average cost per outpatient is USD$7.80. Table 35 below shows the average cost per bed day for each direct cost centre:


USD $Number of

Units *Unit Cost

$Laboratory 44,967 10,950 4.10Diagnostic – Radiology 29,285 4,250 6.80OPD 159,270 20,439 7.80OT 107,943 87 1,240.72Internal Medicine Ward 86,510 2,600 33.27Surgical Ward 43,821 331 132.39Maternity Ward 60,930 365 166.93Paediatric Ward 65,125 1,106 58.88Isolation Ward 36,991 630 58.72Grand Total 634,841


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The table below shows how the total cost for Oecusse hospital is split between the different line items:



Recurrent

Salaries 105,228 31%Medicine 49,866 15%Medical Consumables 20,301 6%Catering 22,293 7%Generator Fuel 37,039 11%R & M 16,672 5%Motor Vehicle 32,026 10%Utilities 6,817 2%Professional Services * 17,096 5%Other 27,768 8%




Oecusse referral hospital has a total of 60 staff, including international doctors. The table below shows the breakdown of staff:


Final Cost Centre

Doctors *

Nurses *


Cleaners Other Total

Permanent 4 15 7 4 - 10 40

Temporary 2 2 - 1 5 10 20

Grand Total

6 17 7 5 1 20 60

* Includes four Cuban doctors and one Cuban nurse

The number of staff is a little higher than other referral hospitals throughout Timor-Leste, but in order to determine whether these numbers are adequate we need to look at both staff mix and utilisation. The % of salary costs for doctors and nurses is as follows:


The table below shows the number of professional staff per direct cost centre, after adjusting for the allocation of time across each direct cost centre, i.e. the amount of time a doctor spends in OPD and IPD and then calculates the number of units per direct cost centre per the number of staff. E.g. there are 8 midwifes who each attend 31.38 births per annum each.

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Table 38 – Staffing Levels

Final Cost Centre Type of Staff

Staff Number

Number of Units *

Unit per Staff


Tech 3 4,250 1,416

OPD Doctor 4.20 20,439 4,866OT Doctor .20 87 435Internal Medicine Ward

Doctor 1 10 10

Surgical Ward Doctor .20 2 10Maternity Ward Midwife 8 251 31.38Paediatric Ward Doctor .20 6 30Isolation Ward Doctor .20 2 10






Consumables $

Total Cost $ %


- 1,711 1,711 2.4%

OPD 15,728 1,891 17,619 25%OT 1,401 584 1,985 2.8%Internal Medicine Ward

15,703 2,118 17,821 25%

Surgical Ward 1,596 348 1,944 2.8%Maternity Ward 3,231 2,118 5,349 7.6%Paediatric Ward 7,719 2,522 10,241 14.6%Isolation Ward 4,488 449 4,937 7.8%Grand Total 49,866 20,301 70,106 100%

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7.2Analysis – Oecusse Referral Hospital

7.2.1 Activity Statistics

The overall occupancy rate for Oecusse hospital totals 57.44%, this is a little lower than other similar referral hospitals (Maliana & Suai) in Timor-Leste with an average BOR of 80%. According to internationally accepted hospital norms for hospitals, anything less than 90% - 95% occupancy level jeopardises efficient utilisation of staff and resources. In order to analyse and compare the utilisation rate we should look at the case mix of the hospital.

As can be seen from table 32 the BOR for isolation ward is the highest and above average at 86.24%, these findings were backed up with discussions and observations during our visit, the Nurse Co-ordinator advised that they have a high number of suspected and diagnosed TB cases in Oecusse and that there is no other TB clinic operating in Oecusse.

The maternity ward has the lowest BOR (25%) compared to other wards and again this is in line with the findings from our visit to the hospital. The low BOR can be attributed to the low number of patients attending the hospital to give birth. Discussions with doctors revealed that many women in the district of Oecusse do not have the means of transport to attend hospital. The women who have given birth in the hospital are generally sent home the next day; this finding was the same throughout all hospitals in Timor-Leste.

The surgical ward BOR is also quite low 45.35%, despite there being a Cuban surgeon in Oecusse; very few operations are taking place. The surgeon advised that this is due to the poor standard of the equipment and facilities in the operating theatre; it was also advised that the anaesthetic nurse is not confident to perform his duties and this has contributed to the low number of operations. The majority of operations being performed are minor surgery such as drainage of abscess and caesarean section. These factors have all contributed to the low BOR of surgical cases, there is no data recorded for the number of cases transferred to other health facilities, however it was noted that the logistical difficulties in transferring surgical patients has resulted in approximately only six patients transferred to Dili for surgery.

The overall average length of stay amounts to 4 days which suggests that patients are not being kept in hospital for excessive periods, which has been noted as the norm in other hospitals in Timor-Leste. Compared to average length of stay at Suai hospital, Oecusse is a little higher, this is due to the number of TB cases treated, however it is still below the target ALOS of 6 days.

7.2.2 Total Costs

The total cost of operations for Oecusse hospital amounts to $634,841. Table 33 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 63.3% of the expenditure with outpatients taking 25.1% and diagnostic services (laboratory and radiology) taking the remaining 11.6%.

The outpatient department consumes 25.1% of the total costs. Whilst the BSP strongly recommends that referral hospitals do not see patients without a referral letter from a health centre this practice has not yet been adopted. In fact it is extremely difficult for the hospital OPD to turn outpatients away as the closest health centre is 7 kilometres away. It is not practical to send sick patients, often without any transport to the health centre.

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Data is not maintained in Oecusse as to the number of referral patients attending the OPD. It was estimated through an analysis of two days OPD that the percentage of referral patients was only 3%. This is extremely low and should not be used as a funding basis for the hospital, although if we use this figure as an estimate then we see that of the 20,439 outpatients only 613 would have referral letters.

The financial impact of this is on the hospital funding could be quite severe, as essentially the OPD is delivering primary health care services, which under the current MoH structure are funded through the District Health Services and not through hospitals. As noted above the analysis showed that of the total number of outpatients (20,439) only 3% (613) had referral letters. Based on the estimate that 3% of the patients are non-referral then Oecusse hospital is spending $154,492 or 24% of its funding on primary health care services. Whilst this is a very arbitrary number if we assume 50% of outpatients are non-referral then the figure becomes $79,635 or 13% of total expenditure, this is still a significant sum. It is expected that as the BSP is rolled out by the MoH patients and medical staff will become more aware of the referral system, however the MoH needs to review this situation and determine if a clinic should be set up on the hospital grounds which is funded through the District Health Services or funding for these services should be added to the hospital budget.

Whilst the % of expenditure allocated to the Isolation ward is relatively high compared to other referral hospitals, this can be attributed to the higher number of TB cases treated in Oecusse referral hospital.

The % of costs allocated to the operating theatre is relatively high compared to the number of operations currently being performed. This can be attributed to the high capital costs of equipment for the operating theatres and also the high proportion of overhead costs allocated on the basis of floor space. The new operating theatres account for 13% of the total floor plan.

7.2.3 Unit Costs Inpatient & Outpatient

The overall average cost per bed day for Oecusse is $58.30. On average, costs per bed day amount to 3% as a proportion of GNP per capita. The cost per bed day for Oecusse Hospital amounts to 13% of GNP.

The average cost per outpatient is USD$7.80. This is below the per capita range of $8.26 - $15.40 per the MTEF prepared by the MoH for Primary health care. As mentioned above the majority of outpatients appear to be primary health care visits.

The unit cost for the OT is very high at $1,240.72; this is due to the small number of operations performed as well as the high equipment and annualised capital costs allocated to the OT.

7.2.4 Individual Line Item Expenditure

Salaries & Wages

Salaries account for 31% of total recurrent costs which is consistent with other hospitals within Timor-Leste a detailed review of the salaries is below.

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There are no accurate records maintained for the allocation of doctors time between OPD and IPD based on discussions and observations it was noted that approximately 80% of all doctors time was spent on OPD.

Table 38 above shows the number of staff per unit of service. The statistics show that doctors are attending 4886 outpatients each per annum; this equates to 93 per week, and based on a 6 day working week 15.66 per day. Whilst midwifes are attending 31.38 births per annum each, this equates to 0.60 per week per midwife. Obviously this is due to the low number of deliveries in the hospital; however no analysis of the staff utilisation has been undertaken by hospital management. It is expected that as part of the BSP this will be reviewed.

From discussions and observations with hospital staff it was noted that of the 17 nurses only four are working on wards, the balance are either in administration or working in outpatients. This makes it extremely difficult for the nursing staff to adequately cover all shifts taking into account both sick and annual leave entitlements and has an impact on the effectiveness of the hospital.

Medical Supplies

Medical supplies amount to 21% of total recurrent costs, which is a little bit lower than the average for other hospitals of 31%; however there are issues surrounding the recording of the distribution and particularly wastage as noted below.

As noted earlier medical supplies for Timor-Leste are provided through an EC grant and hospitals are currently not being charged for the supplies, this is expected to change from 2008 onwards. Hospitals receive the majority of their medical supplies from SAMES, however it was noted during the study that it is the norm rather than the exception that what is ordered is delivered. In the majority of cases there is an under supply of the items ordered, although occasionally the number of items delivered will be a lot more than what has been ordered. It was mentioned that there is little or no communication between SAMES and the hospital on the differences between items ordered and items delivered. The same was found for all hospitals in Timor-Leste. Pharmacy staff did note that the supplies coming from SAMES have improved over the last twelve months.

The hospital does not have a stock management system in place, in order to get medical supplies from the pharmacy, a department hand writes a request, generally on scraps of paper. There are no pre-printed order forms for medical supplies. The pharmacy department does not maintain any data regarding the amount or nature of items distributed to departments. No monthly summaries of the total number and cost of supplies distributed to each department is prepared, neither are there any regular stock counts taking place. Departments do maintain a small amount of supplies in the wards and these are regularly counted by the nursing staff, however there are no reports prepared. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.


Repairs and maintenance amount to 5% of total recurrent costs. This is quite low and it is estimated that the amount should be around 10% of total recurrent costs. However the low expenditure for the 2007 fiscal year can be attributed to the fact that a new hospital was being constructed and as such building maintenance on the old building has been kept to a minimum and the new equipment has not yet been purchased. It was noted during the review that a number of items of equipment are not in working order, as noted above the anaesthetic machine in the operating theatre is not working. Whilst it is understandable that the hospital is awaiting new equipment and therefore is not spending a lot on equipment, in order to provide services it is essential that the equipment is maintained and in good working order. Therefore, it is essential that in the future years the amount spent on maintenance increases to allow for regular maintenance of the new

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hospital and equipment. The required amounts have been calculated in the forward estimates.

Catering Supplies

Catering supplies amount to 7% of total costs which is below average compared to other hospitals in Timor-Leste (10%). The catering contract entered into by the Government of Timor-Leste does not state the individual cost per meal, it includes the menu for meals as prepared by MoH nutrition department. The cost in the contract amounts to $1,857.75 per month, however there is no information or criteria to determine how this amount was calculated. Furthermore the amount being paid is a lump sum, rather than based on deliverables, i.e. the number of meals served daily.

A detailed analysis of the catering costs shows that based on the number of patient days the cost per meal is $4.19, this amount is in line with HNGV cost, after taking into account increased cost for delivery in Districts, as opposed to the capital. However there is no accounting for the lower cost of meals for children versus adults.


The majority of the patient data collected for inpatients during this study was obtained from hand written books maintained by the medical records department. The books record information for each patient, including name, sex, age, village, admission date, diagnosis, discharge date and information regarding deaths. The reliability of the data is dependent upon the medical records officer logging each patient in the book; checks on the accuracy of the data were carried out during each visit to the hospital. Some issues noted in regards to the data are as follows:

Good patient information is recorded in the book; however it is neither compiled monthly nor analysed. Some of the data is analysed to send to central services MoH on number of malaria cases etc, however the hospital management do not obtain monthly data reports. Discussions with management revealed that they have not been given any formats or guidelines from MoH on the collection and analysis of data. Accordingly questions such as the following remain unanswered: How should the data be used? How often should it be compiled? Who should be given the data?

The hospital has no pre printed forms for either inpatients or outpatients, all data is recorded in the manual books. Discussions revealed that medical record staff member has had no training in either data collection, analysis or file management.

No patient numbers are assigned to patients. No clear definitions of the type of data to be recorded are in place. For

example patients with trauma are recorded just as trauma regardless of the nature of the trauma. Again management have developed their own system, which is a good start however they do need some guidelines to be set by MoH and for training in data collection to be provided.


Under the current structure the budget for Oecusse hospital is compiled at the very top level, i.e. there is no departmental budgeting. This is the same across all hospitals. The hospital management have very little input into the preparation of the budget.

As noted in the overall findings Timor-Leste operates a centralised system of financial management. Under this centralised system hospitals do not undertake their own financial transactions, aside from a small petty cash float. All procurement and payments

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for amounts over $1,000 are prepared by central services MoH, including payment for all salaries. This centralised system has resulted in a number of inefficiencies for the hospital, such as:










Key Findings Patient records and information systems are being collected but are not being

collated, analysed or utilised to assist in management decisions; Low utilisation rates compared to other hospitals in Timor-Leste; Referral system as adopted by the MoH has not been fully implemented; Centralised financial management systems has resulted in a lack of ownership of

financial management, including budgets; High cost per operation due to lack of number of operations; Lack of resources to manage inventory systems; Repairs and maintenance for equipment and buildings is often done on an ad hoc







A full list of recommendations for consideration to assist in addressing these matters can be found in the last section of this report. It is noted that many, if not all of the issues affecting Oecusse Referral Hospital are applicable to across all hospitals in Timor-Leste.

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8 Findings and Analysis - Suai Referral Hospital

8.1Findings

8.1.1 Introduction

Suai Referral Hospital is located in the district of Suai approximately 6-7 hours drive from the capital Dili. The hospital has 24 beds. Suai Hospital currently services the population of Suai and Ainaro, although a new hospital was opened in the District of Ainaro in November 2007; and as such the population of this district will no longer travel to Suai. For the purposes of the costing for the fiscal year ended 30 June 2007 the population serviced by Suai Hospital was 105,543 (53,063 Suai and 52,480 Ainaro).

A new hospital is currently under construction for Suai and completion is scheduled for March 2008, although hospital management have advised that the construction is behind schedule and realistically completion will be June/July 2008. The old Suai hospital has been demolished; current operations are being run out of existing staff housing, as well as demountable buildings donated by the United Nations. The costs for running the temporary hospital have not been taken into account in this study.


Table 40 below shows the basic activity statistics for the Suai hospital. The overall occupancy rate totals 61%.

The overall average length of stay amounts to 3 days. The average bed turnover amounts to 68 days per bed per annum.


Surgical Ward


Maternity Ward

Paediatrics Ward

Isolation Ward

Total



730 3,650 1,460 2,190 730 8,760




248 1,676 498 2,571 323 5,316


3 3 1 5 6 3

Bed Occupancy Rate 34% 46% 34% 117% 44% 61%

Bed Occupancy Rate at 80%

42% 57% 42% 147% 55% 76%

Bed Turnover 17 98 103 81 28 68

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8.1.3 Total Costs

The total cost of operations for Suai hospital is approximately USD$720,000. This represents 8% of total hospital costs in Timor-Leste. This cost encompasses salary and wages, goods and services and annualised capital costs. Notionally free and donated items, such as medical supplies and medical professionals are included. Direct and indirect costs borne by the patients – prescription goods purchased, travelling expenses, opportunity costs etc are not included.


Final Cost Centre Total Cost - USD $ % of Total CostLaboratory 55,879 7.7%Diagnostic – Radiology 35,000 4.9%OPD 175,201 24.4%OT 111,605 15.5%Internal Medicine 114,805 15.9%Surgical 48,842 6.7%Maternity 71,284 9.9%Paediatric 75,434 10.5%Isolation 32,231 4.5%Grand Total 720,282 100%

Table 41 above shows that when all overhead costs are allocated to the direct cost centres (patient care), inpatients take up 63% of the expenditure with outpatients taking 24.4% and diagnostic services (laboratory and radiology) taking the remaining 12.6%.




Total Cost - All Centres Total Cost - USD $ % of Total CostGeneral Administration 63,141 8.8%Maintenance Department 123,563 17.2%Transport Department 50,328 7.0%Kitchen/Catering Department 55,619 7.7%Total Overhead 292,651 40.6%Domestic Services (Cleaning, Laundry & Security)

22,984 3.2%

Medical Records 10,212 1.4%Pharmacy 10,287 1.4%Total Ancillary 43,483 6.0%Laboratory 36,556 5.1%Radiology 22,493 3.1%OPD 81,033 11.3%OT 58,633 8.1%Internal Medicine 65,777 9.1%Surgical 16,311 2.3%Maternity 43,372 6.0%Paediatric 47,150 6.5%Isolation 12,823 1.8%

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Total Direct 384,158 53.4%Grand Total 720,282 100%

Prior to the allocation of overheads and ancillary costs the table above shows that overhead departments account for 40.6% of the total costs, ancillary departments account for 6% and direct/patient care departments account for 53.4% of total costs.


The overall average cost per bed day for Suai is USD$102.54. The average cost per outpatient is USD$10.53. Table 43 below shows the average cost per bed day for each direct cost centre:


USD $Number of

Units *Unit Cost

$Laboratory 55,879 10,950 5.10Diagnostic – Radiology 35,000 3,524 9.90OPD 175,201 16,633 10.53OT 111,605 121 922.35Internal Medicine Ward 114,805 1,676 68.50Surgical Ward 48,842 248 196.95Maternity Ward 71,284 498 143.15Paediatric Ward 75,434 2,571 29.34Isolation Ward 32,231 323 99.80Grand Total 720,282



The table below shows how the total cost for Suai hospital is split between the different line items:



Recurrent

Salaries 130,095 31%Medicine 59,261 14%Medical Consumables 38,463 9%Catering 41,452 10%Generator Fuel 37,643 9%R & M 20,897 5%Motor Vehicle 35,828 9%Utilities 2,254 0.5%Professional Services * 19,860 5%Other 31,529 7%



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Suai referral hospital has a total of 60 staff, including international doctors. The table below shows the breakdown of staff:


Final Cost Centre

Doctors *

Nurses *


Cleaners Other Total

Permanent 6 23 7 3 - 3 42

Temporary - 4 1 2 1 10 18

Grand Total

6 29 8 5 1 13 60

* Includes four Cuban doctors and three Cuban nurses



The table below shows the number of professional staff per direct cost centre, after adjusting for the allocation of time across each direct cost centre, i.e. the amount of time a doctor spends in OPD and IPD and then calculates the number of units per direct cost centre per the number of staff. e.g. there are 8 midwifes who each attend 62 births per annum.

Table 46 – Staffing Levels Final Cost Centre Type

of Staff Staff

NumberNumber

of Units *Unit per

Staff Laboratory Tech. 4 10,950 2,738Diagnostic – Radiology

Tech 2 3,524 1,762

OPD Doctor 3.25 16,633 5,118OT Doctor .25 121 484Internal Medicine Ward

Doctor 1 1,676 1,676

Surgical Ward Doctor .25 248 992Maternity Ward Midwife 8 498 62Paediatric Ward Doctor 1 2,571 2,571Isolation Ward Doctor .25 323 1,292

* Number of tests, beds days, patients, operations & deliveries


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Consumables $

Total Cost $ %


- 3,628 3,628 4%

OPD 17,185 4,109 21,294 22%OT 1,304 2,493 3,797 4%Internal Medicine Ward

20,019 6,170 26,189 27%

Surgical Ward 2,602 1,588 4,190 4%Maternity Ward 5,061 1,812 6,873 7%Paediatric Ward 11,040 5,546 16,586 17%Isolation Ward 2,049 1,310 3,359 3%Grand Total 59,260 38,463 97,723 100%

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8.2Analysis – Suai Referral Hospital

8.2.1 Activity Statistics - Bed Occupancy Rate (BOR) and Average Length of Stay (ALOS)

Suai Hospital is achieving an overall BOR of 61%; according to internationally accepted hospital norms for hospitals, anything less than 90%-95% occupancy level jeopardises efficient utilisation of staff and resources. In order to analyse and compare the utilisation rate we should look at the case mix of the hospital.

As can be seen from table 40 the BOR for paediatrics is 117.41%, effectively this means that the paediatric ward is utilising beds from other wards. These findings were backed up with discussions with the Paediatrician and by what we saw at the hospital when carrying out the study. This may also account for the lower utilisation in other wards as paediatrics are occupying beds, however it should not be seen as the only reason for a low utilisation in other wards. A number of reasons can be attributed of which discussions were held, these included the lack of equipment, the overall low utilisation of all health facilities throughout Timor-Leste, the lack of staff and possibly the run down condition of some hospital buildings.

The surgical ward has the lowest BOR compared to other wards and again this is in line with the findings from our visit to the hospital. There is currently no surgeon at Suai hospital, the surgeon has left and has not yet been replaced and therefore the operations being performed are minor surgery and caesarean sections. The anaesthetic equipment is currently not working in the operating theatre and the theatre is housed in an old building with no air conditioning and uncomfortable conditions. These factors have all contributed to the low BOR of surgical cases, the data shows that there were 22 surgical cases transferred to other health facilities, and however the data does not record to which health facilities the patients were transferred.

The overall average length of stay amounts to 3 days which suggests that patients are not being kept in hospital for excessive periods, which has been noted as the norm in other hospitals in Timor-Leste. Compared to average length of stay at other referral hospitals Suai is reasonable and well below the target ALOS of 6 days. The fact that TB cases are generally transferred to the private clinic has also attributed to the low result.

8.2.2 Total Costs of Hospital

The total costs for Suai Hospital amount to $720,282 which represents 8% of the total hospital costs for Timor-Leste. The % of total costs taken up by each cost centre is in line with other referral hospitals, with only the isolation ward being slightly lower. This can be attributed to the low number of TB cases treated in Suai referral hospital, the majority of TB cases are referred to the privately run TB clinic.

The % of costs allocated to the operating theatre (15.5%) is relatively high compared to the number of operations currently being performed. This can be attributed to the high capital costs of equipment for the operating theatres and also the high proportion of overhead costs allocated on the basis of floor space. The new operating theatres account for 13% of the total floor plan.

The outpatient department consumes 24.4% of the total costs. Whilst the BSP strongly recommends that referral hospitals do not see patients without a referral letter from a health centre this practice has not yet been adopted. It was noted in Suai that whilst a Community Health Centre is located less than 1 kilometre from the hospital, patients

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would come directly to the hospital; the hospital manager advised ‘that patients believe the hospital is where the doctors are”. There are most likely a number of reasons as to why patients come directly to hospitals; such as habits and prior to the Cuban medical brigade arriving many health centres did not have doctors on site.

The financial impact of this is on the hospital funding could be quite severe, as essentially the OPD is delivering primary health care services, which under the current MoH structure are funded through the District Health Services and not through hospitals. The data collected for Suai showed that of the total number of outpatients (16,633) only 6.3% (1,062) had referral letters. Whilst it is acknowledged that the recording for the OPD, including referrals, needs to be improved if we assume that 50% of the patients are non-referral then Suai hospital is spending $87,600 or 12% of its funding on primary health care services. It is expected that as the BSP is rolled out by the Ministry patients and medical staff will become more aware of the referral system.

8.2.3 Unit Costs Inpatients and Outpatients

The overall average cost per bed day for Suai is $64.40. On average, costs per bed day amount to 3% as a proportion of GNP per capita. The cost per bed day for Suai Hospital amounts to 14% of GNP.

The average cost per outpatient is $10.53. The average cost per outpatient at Suai is a lot higher than the average cost per outpatient at the other referral hospitals (Maliana $3 & Oecusse $7.80), this is due to the lower number of outpatients presenting at Suai compared to the other hospitals. Whilst the average cost per outpatient is higher than other hospitals it is well within the per capita range of $8.26 - $15.40 per the MTEF prepared by the MoH for Primary health care. As mentioned above the majority of outpatients appear to be primary health care visits.

The unit cost for the OT is very high $922.35; this is due to the small number of operations performed as well as the high equipment and annualised capital costs allocated to the OT.

8.2.4 Individual Line Items

Salaries & Overtime

Salaries account for 31% of total recurrent costs which is consistent with other hospitals within Timor-Leste a detailed review of the salaries is below. The number of staff is in line with other referral hospitals throughout Timor-Leste, but in order to determine whether these numbers are adequate we need to look at the staff utilisation. There are no accurate records maintained for the allocation of doctors time between OPD and IPD based on discussions and observations it was noted that approximately 80% of the general practitioners was spent on OPD, whilst approximately 10% of the paediatricians’ time was spent on OPD. This is somewhat lower than other referral hospitals and is due to the high number of paediatric inpatients.

Table 46 above shows the number of staff per unit of service after allocations across departments has been made. The statistics show that doctors are attending 5,118 outpatients, this equates to 98 per week, or 16 per day. Whilst midwifes are attending 62 births per annum each, this equates to 1.19 per week per midwife. Obviously this is due to the low number of deliveries in the hospital; however no analysis of the staff utilisation has been undertaken by hospital management. It is expected that as part of the BSP this will be reviewed.

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The hospital only has one cleaner, from discussions and observations with hospital staff it was noted that one cleaner for the entire hospital is not adequate, particularly when the new hospital is constructed, which is a much larger building. It is estimated that at there needs to be at least four cleaners, three inside and one outside.

Catering Costs

Catering supplies amount to 10% of total costs which is average for hospitals in Timor-Leste. The catering contract entered into by the Government of Timor-Leste does not state the individual cost per meal, it includes the menu for meals as prepared by MoH nutrition department. The cost in the contract amounts to $3,454 per month, however there is no information or criteria to determine how this amount was calculated. Furthermore the amount being paid is a lump sum, rather than based on deliverables, i.e. the number of meals served daily.

A detailed analysis of the catering costs shows that based on the number of patient days the cost per meal is $7.80 this is more than double the cost per meal for an adult in HNGV ($3.49).

It was also noted that there is no nutritionist/dietician working in the hospital. Whilst the catering is outsourced to a company, there is not a staff member assigned to undertake quality control over the food quality or portions. The menu is set by central service MoH.

Medical Supplies

The medical supplies costs are 23% of the total recurrent costs which is average for a hospital of this type. The allocation of medical supplies to each of the cost centre was determined based on an analysis of the distributions from the pharmacy. Table xx below shows the allocation to each of the cost centres. As can be seen the internal medicine department is utilising the majority of the medical supplies with outpatients being the next biggest consumer.

As noted earlier medical supplies for Timor-Leste are provided through an EC grant and hospitals are currently not being charged for the supplies, this is expected to change from 2008 onwards. Hospitals receive the majority of their medical supplies from SAMES, however it was noted during the study that it is the norm rather than the exception that what is ordered is delivered. In the majority of cases there is an under supply of the items ordered, although occasionally the number of items delivered will be a lot more than what has been ordered. It was mentioned that there is little or no communication between SAMES and the hospital on the differences between items ordered and items delivered. The same was found for all hospitals in Timor-Leste. It was also noted that a number of the items received are very close to the expiry date.

The hospital does not have a stock management system in place, in order to get medical supplies from the pharmacy, a department hand writes a request, generally on scraps of paper. There are no pre-printed order forms for medical supplies. The pharmacy department manually records the amount distributed to the maternity and outpatient department, but is not recording details for any other department. No monthly summaries of the total number and cost of supplies distributed to each department is prepared, neither are there any regular stock counts taking place. Departments do maintain a small amount of supplies in the wards and these are regularly counted by the nursing staff, however there are no reports prepared. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.


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Repairs and maintenance amount to 5% of total recurrent costs. This is quite low and it is estimated that the amount should be around 10% of total recurrent costs. However the low expenditure for the 2007 fiscal year can be attributed to the fact that the hospital was demolished to make way for the new hospital and expenditure on equipment has been extremely low as the hospital is awaiting the arrival of the new equipment. The logistical difficulties, for repairs of medical equipment are also a contributing factor to the low maintenance expenditure. It is essential that in the future years this figure increases to allow for adequate maintenance of the new hospital and equipment. The required amounts have been calculated in the forward estimates.


The majority of the patient data collected for inpatients during this study was obtained from hand written books maintained by the medical records department. The books record information for each patient, including name, sex, age, village, admission date, diagnosis, discharge date and information regarding death and transfers. The reliability of the data is dependent upon the medical records officer logging each patient in the book, checks on the accuracy of the data were carried out during each visit to the hospital. Some issues noted in regards to the data are as follows:

Good patient information is recorded in the book; however it is neither compiled monthly nor analysed. Some of the data is analysed to send to central services MoH on number of malaria cases etc, however the hospital management do not obtain monthly data reports. Discussions with management revealed that they have not been given any formats or guidelines from MoH on the collection and analysis of data. Accordingly questions such as the following remain unanswered: How should the data be used? How often should it be compiled? Who should be given the data?

The hospital has prepared an inpatient form which records the patient number; however the forms are filed loosely in a filing cabinet, rather than in patient files. Discussions revealed that medical records staff have not had training in file management.

The patient forms have been prepared by Suai and has not been endorsed by MoH

Outpatients are given a unique patient number, however if the patient has been referred from a health centre then no number is given

No clear definitions of the type of data to be recorded are in place. For example patients with trauma are recorded just as trauma regardless of the nature of the trauma. Again management have developed their own system, which is a good start however they do need some guidelines to be set by MoH and for training in data collection to be provided.


Under the current structure the budget for Suai hospital is compiled at the very top level, i.e. there is no departmental budgeting. This is the same across all hospitals. The hospital management have very little input into the preparation of the budget.


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Limited information is provided by central services to the hospital on budget vs actual reporting, in fact the hospital stated during our visit that they had never had a visit from the finance department of MoH, financial reports were received only when they visited Dili and requested the information;





The result of the current system is that managers are operating without the relevant information to enable them to make informed decisions.



Key Findings Patient records and information systems are being collected but are not being

collated, analysed or utilised to assist in management decisions; Low utilisation rates in adult wards compared to other hospitals in Timor-Leste, whilst

paediatrics has very high utilisation. Resulting in paediatrics utilising beds in other wards;

Referral system as adopted by the MoH has not been fully implemented; Centralised financial management systems has resulted in a lack of ownership of

financial management, including budgets; Lack of resources to manage inventory systems; Repairs and maintenance for equipment and buildings is often done on an ad hoc







A full list of recommendations for consideration to assist in addressing these matters can be found in the last section of this report. It is noted that many, if not all of the issues affecting Suai Referral Hospital are applicable to across all hospitals in Timor-Leste.

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9 Forward Estimates – MTEFThe MTEF tables for hospitals have been updated as part of this study, however it is noted that these tables will require continual updating, at least on an annual basis as the data improves as more advanced systems for monitoring and analysing costs are implemented. It is envisaged that technical assistance to update the MTEF will be carried out during 2008. The tables below present the updated tables for hospitals and these should be included in the annual updating of the MTEF:

Table 1 - Proposed Hospital Expenditure by line item (2008 - 2012)

2008

$2009

$2010

$2011

$2012

$ HOSPITAL/ REFERRAL LEVEL SERVICES RECURRENT Salaries 1,557,000 1,634,850 1,716,593 1,802,422 1,892,543

Good and Services (drugs and consumables) 1,300,000 2,194,556 2,454,433 2,619,598 2,784,763

Good and Services (other) 2,060,289 2,558,940 2,651,008 2,916,109 3,181,210

Operational Expenses, Catering, Cleaning, Misc 1,382,051 1,451,154 1,523,711 1,676,082 1,828,453

Utilities and Generator Fuel 360,238 371,101 380,515 418,566 456,617

Fuel 111,000 127,375 131,914 145,105 158,297

Maintenance of vehicles 87,000 90,857 93,582 102,940 112,298

Maintenance of equipment and buildings 623,000 1,198,000 1,198,000 1,198,000 1,198,000

Minor Capital 1,280,000 1,215,133 983,376 1,081,713 1,180,051 Sub-Total Recurrent 6,197,289 7,603,479 7,805,410 8,419,843 9,038,567CAPITAL Major Capital 2,554,000 1,500,000 1,500,000 1,500,000 1,500,000

Technical Assistance/ Professional Services 1,110,000 2,550,000 1,990,000 1,990,000 1,710,000

Training 288,000 288,000 240,000 140,000 140,000 Sub- Total Capital 3,952,000 4,338,000 3,730,000 3,630,000 3,350,000 TOTAL 10,149,289 11,941,479 11,535,410 12,049,843 12,388,567

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Table 2 - Proposed GSB Hospital Expenditure by Line Item (2008-2012)* 2011 & 2012 assumes that the GSB grows at a minimum of 15% a year (Source: combating poverty as a national cause)

2008

$2009

$2010

$2011

$2012

$ HOSPITAL/ REFERRAL LEVEL SERVICES RECURRENT Salaries 1,557,000 1,117,008 1,150,097 1,150,097 1,892,543

Good and Services (drugs and consumables) 1,300,000 1,205,808 1,237,409 1,237,409 1,237,409

Good and Services (other) 2,060,289 1,988,463 2,044,965 2,044,965 2,044,965

Operational Expenses, Catering, Cleaning, Misc 1,382,051 1,304,677 1,341,668 1,341,668 1,341,668

Utilities and Generator Fuel 360,238 371,101 380,515 380,515 380,515

Fuel 111,000 127,375 131,914 131,914 131,914

Maintenance of vehicles 77,000 90,857 93,582 93,582 93,582

Maintenance of equipment and buildings 130,000 94,453 97,287 97,287 97,287

Minor Capital 1,280,000 191,133 209,376 209,376 209,376 Sub-Total Recurrent 6,197,289 4,502,412 4,641,847 4,641,847 5,174,918CAPITAL Major Capital 2,554,000 1,350,000 1,100,000 1,100,000 1,100,000

Technical Assistance/ Professional Services 600,000 1,629,128 1,706,390 1,706,390 1,706,390

Training 22,260 22,928 23,616 23,616 23,616 Sub- Total Capital 3,176,260 3,002,055 2,830,006 2,830,006 2,830,006 TOTAL 9,373,549 7,504,467 7,471,854 7,471,854 8,004,924

82


Table 3 – Required Hospital Donor Expenditure by Line item (2008-2012)* * Gap between resource needs (table 1) and GSB resources (table 2)

2008

$2009

$2010

$2011

$2012

$ HOSPITAL/ REFERRAL LEVEL SERVICES RECURRENT Salaries 0 517,842 566,496 652,325 0

Good and Services (drugs and consumables) 0 988,748 1,217,024 1,382,189 1,547,354

Good and Services (other) 0 570,477 606,043 871,144 1,136,245

Operational Expenses, Catering, Cleaning, Misc 0 146,477 182,043 334,414 486,785

Utilities and Generator Fuel 0 0 0 38,051 76,103

Fuel 0 0 0 13,191 26,383

Maintenance of vehicles 10,000 0 0 9,358 18,716

Maintenance of equipment 493,000 1,103,547 1,100,713 1,100,713 1,100,713

Minor Capital 0 1,024,000 774,000 872,338 970,675 Sub-Total Recurrent 0 3,101,067 3,163,563 3,777,996 3,863,649CAPITAL Major Capital 0 150,000 400,000 400,000 400,000

Technical Assistance/ Professional Services 510,000 920,873 283,610 283,610 3,610

Training 265,740 265,072 216,384 116,384 116,384 Sub- Total Capital 775,740 1,335,945 899,994 799,994 519,994 TOTAL 775,740 4,437,011 4,063,556 4,577,989 4,383,643

83

10RecommendationsAs a result of the findings it is recommended that the following areas be addressed. The recommendations only indicate a general direction for future investigations and discussions and will, in some instances, require policy formulation by the MoH. It is suggested that the next stage would be for the Hospital Service Package working group to take up these recommendations and develop strategies and work plans, together with the hospitals to address these areas.

Functional uses of hospitals including referral systems and processes

The results of this study show that all hospitals, apart from Maliana, are operating at well below the internationally accepted occupancy rate; this suggests that hospitals are either inappropriately sized or being run inefficiently and that there is substantial excess capacity in the hospital sector. It is recommended that the new hospital department within the MoH works closely with the BSP unit and hospital managers to make estimates for future demand for hospital services to ensure that current hospital size is appropriate and is in line with the referral system adopted under the BSP.

The results also indicate that hospitals are not yet operating as the pinnacle of the referral system and as such non-referral outpatients take up a high proportion of hospital activities. Whilst it is expected that as the BSP is rolled out by the MoH, patients and medical staff will become more aware of the referral system. However it needs to be emphasised that in some cases it is not feasible to send non-referral patients away, for example in Baucau and Maliana where there is no CHC operating, whilst in Oecusse the closest CHC to the hospital is 7 kilometres away. Discussions are needed regarding the operations of outpatient departments within hospitals and the following issues should be addressed; What are the alternatives, for example will MoH set up new CHC’s in hospital grounds, or will the old hospitals be set up as CHC’s or will hospitals continue to provide non-referral outpatient services? Are these alternatives cost effective? What are the implications of these alternatives for hospitals, for example, if hospitals are to continue to provide outpatient services to non-referral patients then hospitals should receive a proportion of primary health care funding.

Patient Statistics

The activity information system needs to be improved, with the emphasis on supplying clear and accurate information to managers coupled with training for managers to enable them to fully understand and utilise the data and reports they receive. Hospitals currently collect patient data, however only some hospitals are analysing this data and hospital managers are not fully aware of how this data can assist them in improving hospital operations. Ideally in the near future, managers should be able to receive clear regular reports which show the level of actual activity against planned activity, the level of actual expenditure against planned expenditure, estimated unit costs, key staff performance indicators, quality indicators and any areas of particular concern such as the state of equipment. Collecting the information should not impose a high cost on the hospital, or be highly technology dependant. The right balance will need to be made between cost and accuracy. The initial step would be to analyse the present system in detail and design and cost a new system which can be rolled out to all hospitals

Resource Allocation across hospitals

The overall allocation of resources to each individual hospital, varies year by year, and appears to be based on historical expenditure with minor adjustments. However there has been little or no reflection of increases due to population, catchment areas and increased or decreased utilisation.

There are many methods for allocating resources across hospitals. A simple method for allocating resources in an equitable manner, which may be the best for Timor-Leste at this time, would be to set bed levels based on catchment populations and expected number of patients, and then calculate the precise amount based on an efficient cost per patient. This would result in hospitals receiving their budget allocation based on utilisation and efficiency. The new hospital department should work closely with the finance department to develop and implement this approach to budget allocation.

Standard Protocols and Operations Manuals

The study found, through discussions with medical staff that there are ad-hoc standards and guidelines throughout the hospital system. There is a need to develop operations manuals and provide guidance and training across all hospitals.

Staffing Numbers and Mix

This study has made it apparent that the commentary in relation to the staffing numbers for the hospital sector needs to be assessed in light of the very low activity/productivity currently being achieved. It is clear that there is ample spare capacity for the hospital workforce to cope with desired increased utilisation. However as noted above it is the skill mix of the hospital workforce rather than the numbers which must be addressed. The updated workforce plan addresses these areas. In addition it is strongly recommended that as MoH HR capacity improves that a priority be given to clarifying job descriptions and duty statements of all staff.

Financial Management and Budgeting

As noted in the overall findings Timor-Leste operates a centralised system of financial management. Under this centralised system hospitals do not have their own financial management systems, hospital transactions are recorded in the whole of Government Freebalance accounting software and as such hospitals have very little control over the structure and reporting for financial transactions. It was also noted that hospitals are currently not preparing their own budgets, but rather send ‘proposals’ to MoH finance department who will prepare budgets. It is recommended that as an initial step, a finance working group consisting of staff from MoH and hospitals develop a work plan and timeline to introduce financial management systems across all hospitals. The working group should address the following issues:

Budget structures, including departmental budgeting; Guidance and training to hospital finance staff on budget preparation; Review of equitable allocations together with policy and planning; Timelines for preparation of annual departmental budgets; Training for all department heads on how to read and understand financial

reports; Preparation of accounting manuals for hospitals; Training in accounting manuals; Review and recommend an accounting system into hospitals which will allow

the tracking of all expenditures and revenues; Regular reporting formats should be developed and departmental managers

should receive timely reports; Reconciliation of staffing numbers across all hospitals between hospitals, HR

and payroll; Financial indicators be developed and monitored by all hospitals.

Regular Updating of Costing Information

As this is the first time that a detailed costing study has been undertaken many estimates have had to be made and the patient data collected has not been entirely reliable. It is therefore recommended that hospital costs continue to be collected as a matter of routine and more advanced analysis is carried out, in conjunction with the updating of the MTEF and the annual budget cycle.

Inventory Management

There is an urgent need to develop and implement an inventory system across all hospitals for both the pharmacy and ward stocks. No hospital has a functioning stock management system in place. The risk of loss and obsolescence is greatly increased due to the absence of a robust stock management system, including regular stock counts and reports on usage, wastage and current stock values.


The management of repairs and maintenance needs to be urgently examined. Preventative maintenance schedules should be designed together with clear inventory records. It is understood that the MoH is in the process of recruiting technical assistance to develop the framework for maintenance of equipment and hospitals.

. Contracting Performance Management

A number of services are outsourced to local companies, for example cleaning and catering services. It was noted during the study that management have received no training on contract management and this has left them in a difficult situation in managing both catering and cleaning contracts. HNGV is the only hospital which has outsourced cleaning services, and again it was noted that protocols and standards for cleaning have not been developed, including the optimal number of cleaners required. Furthermore, in relation to the catering, it was noted, that the reconciliation between inpatients and meals charged is not carried out. These are areas where potentially large losses can occur it is recommended that criteria and guidelines, including training in contract management is provided for managers.

User Fees

Whilst it is understood that the Government will not, in the near future be introducing user fees, HNGV is currently charging for the VIP ward. It was noted during this study that the amount being charged does not cover the cost of the VIP ward; it is assumed that the costs of the VIP should only cover the hotel services provided. It is recommended that a more detailed analysis of the fees charged to the VIP be carried out to ensure that the hotel services are being charged at an appropriate and cost recovery rate, it is further recommended that this is reflected in hospital policy.

Appendix 1 – Departments By Hospital

DEPARTMENTS BY HOSPITAL

Department HNGV



Maubisse Referral Hospital



Cost Centre

Outpatient Department X X X X X XEmergency Department X X X X X XVIP Ward XOperating Theatre X X X X X XPaediatric Ward X X X X X XMaternity Ward: Post Natal X X X X X X Delivery X X X X X XSurgical Ward: Male X X X X X X Female X X X X X XMedical Ward: Male X X X X X X Female X X X X X XICU Ward X XIsolation Ward X X X X X XLaboratory X X X X X XRadiology X X X X X X

Overhead DepartmentsGeneral Administration X X X X X XMaintenance Dept X X X X X XTransport Dept X XCatering/Kitchen Dept X X X X X XLaundry Dept X X X X X XDomestic Services X X X X X XClothing Services X XMedical Records X X X X X XDispensary/Pharmacy X X X X X X

Appendix 2 - Assumptions

1. Medical Equipment Costing - As there are currently limited records available for existing medical equipment in each of the hospitals, and the equipment that does exist is very old and mostly in need of replacement. It was decided to utilise the medical equipment listings prepared by the Bio-Medical engineer for the Ministry of Health in 2005. These listings have been fully costed and provide the required equipment for each department/ward for each of the hospitals. The Ministry is in the process of procuring these items and it is expected that they will be commissioned in early 2008. Once the total costs from the procurement, including delivery and installation costs are known the hospital costs should be updated.

2. Building Costing – Every hospital in Timor-Leste is currently undergoing new construction/rehabilitation. Oecusse, Maliana and Maubisse hospitals have been completed in the last quarter of 2007, whilst Dili, Baucau and Suai are expected to be completed in late 2008. Accordingly it was decided to use the new construction costs for each hospital as the basis for annualised capital building costs.

3. Cuban Medical Brigade – The Timor-Leste Government pays for the accommodation, local travel and small incidentals for the Cuban medical brigade. Whilst the salaries for the Cuban Medical Brigade are paid for by the Cuban Government. It was not possible to obtain the true costs for salaries therefore the equivalent salary for a National position was utilised. It is also assumed that the Cuban Medical Brigade will remain in Timor-Leste until the Timorese students currently studying medicine in Cuba return to Timor-Leste. Currently the bulk of the medical students will not return to Timor-Leste until 2012.

4. Chinese Medical Doctors – The Timor-Leste Government does not contribute to the costs of the Chinese Doctors, they are fully funded by the Chinese Government. It was not possible to obtain details of these costs and accordingly, as with the Cuban Medical Brigade, the equivalent salary for a National position has been used. Again it is also assumed that the Chinese doctors will remain in Timor-Leste until 2012.

5. Teaching and Training Costs - The costs for teaching medical students and nurses have not been included in the total costs collected for each hospital. It is felt that these costs should not be included at this stage as there is no teaching hospital operating in Timor-Leste, although Guido Valadares Hospital does have anaesthesia training on site, but these costs are minimum and would not distort the overall figures. The majority of study by Timorese Doctors and specialist is carried out overseas, and this is funded through a European Commission Grant, whilst the clinical nurse training is funded through the central services of the Ministry of Health.

6. Bed Numbers - All statistical data has been based on the approved number of beds for each of the hospital and not the actual number of beds in place. Across all hospitals additional beds have been added to wards to accommodate patients.

Appendix 3 – Patient Satisfaction Survey

Assessment

A problem is present when the actual situation that exists is different to the desired situation. The generation of ideas, selection of the best solution, planning and implementation must be followed by assessment to find out if the implementation of the solution has in fact achieved the outcome that is required. That is, “Has the desired situation been achieved?”

Surveys

Since all activity within a hospital or health service is directed towards providing better care for patients or clients it is reasonable to ask them how well the organization is doing. A common and effective method of doing this is to conduct a survey through a series of questions called a questionnaire. The following example is a general “Patient Satisfaction Survey” which is designed as a verbal survey as many patients are illiterate.

PATIENT SATISFACTION SURVEY

Patients surveyed must be asked the same questions. The surveyor must not lead the patient but listen closely to what they say and then mark the responses which best match their answers. The Surveyor should add brief notes if they offer additional comments.

Good morning/afternoon, my name is ................... We would like to know what you like and what you do not like about our Hospital. Would you like to answers some questions that will help the Hospital find out how it can make you, and other patients, happier while they are in our Hospital?1. The first question is “Where do you live?”1. Dili town2. Close rural3. Other District4. Another country2. How long was it between when you first felt sick and

when you came to the Hospital?1. Less than 1 day2. 2-3 days3. 4-7 days4. more than 7 days3. Did you go to a Health Centre before you came to this

Hospital1. Yes2. No

If “No” ask “Why not?”1. Health Centre closed2. They don’t have medicines3. I wanted to see a doctor4. I do not like the staff5. There is not a Health Centre near where I live6. Other commentsIf “Yes” ask “Did they make you feel better?”1. Yes2. No3. They sent me to Hospital4. Other comments

4. How many days have you been in Hospital?1. 1 day2. 2-3 days3. 4-7 days4. more than 7 days5. Do you feel better since you have been in Hospital?1. Yes2. No3. Other comments6. Has a doctor been to see you each day that you have

been in Hospital1. Yes2. No3. Other comments7. Do you have a relative or friend with you?1. Yes2. No3. Sometimes8. Have you been told what is wrong with you and how it

will be fixed?1. Yes2. No3. Other comments9. Do you understand what the doctors and nurses have

told you?1. Yes2. No3. Other comments10. How often are you given medicines, tablets or

injections1. Lots of times each day2. When I ask for them3. Not very often4. Other comments

11. Does a Nurse come when you need one?1. Yes2. No3. Sometimes4. Other comments12. Do you like the bed?1. Yes2. No3. Other comments13. Have you slept under a bed net1. Yes2. No3. Other comments14. Do you like the people in the beds near you?1. Yes2. No3. I don’t like being next to Males/females4. I am frightened of some people5. Other comments15. Have you been able to sleep when you are tired?1. Yes2. No3. It’s too noisy4. I can’t sleep with the lights on5. Other comments16. Has the Hospital given you enough food?1. Yes2. No17. Have you been given enough to drink?1. Yes2. No18. Do you like the food that you have been given by the

Hospital?1. Yes2. No3. Sometimes4. Other comments19. Do you think that the ward is kept clean and tidy?1. Yes2. No3. Other comments20. Do you think that the toilets are cleaned properly?1. Yes2. No3. Other comments

21. Can you go to the toilet and shower by yourself?1. Yes2. No, I need help3. No, I can’t get out of bed4. No it is too far away5. No, I am frightened to go outside6. Other comments22. Do you like being in this Hospital?1. Yes2. Not very much3. Not at all4. Other comments

Thank you for answering my questions.

Preparing a questionnaire requires time and careful thought including the following matters:

Decide whether the questionnaire will be verbal (ie. a surveyor will ask questions and write the answers down on a prepared response sheet) or whether it will be written (ie the person being surveyed will read the questions and mark the survey form themselves). The first of these methods is slower and great care (and training) is needed to make sure that the responses are the patient’s and not the surveyors). The second method is quicker but not all patients who are given a questionnaire will complete it and many will not be able to read at all.

List the things that the group producing the questionnaire want to know about. Do not try to write questions until all topics are recorded. (For example you might want to know whether the nurses are friendly, whether they are comfortable, whether they like the food, whether they know about their illness etc.)

Write your questions to find out about those topics to suit the experience and skills of the people to be surveyed. Do not ask questions that a patient could not reasonably answer. For example it is unreasonable to ask patients “Is there enough staff?” but it is reasonable to ask them “Does a Nurse come when you need one?”

To get a good measure (particularly in written surveys) it is better to ask questions that allow people to grade the service. The above example gives choice without grading as it is a verbal survey.

Write the questionnaire so that it can be used before changes are made to services and procedures and at intervals after implementation of the changes. To be useful measures of performance, surveys must be able to be used many times over a long period

Test surveys on friends and/or family before giving them to patients as this will help show any questions that are unclear or which do not give you information about the topic you are trying to assess.

You cannot survey every patient so, for a survey of this type to be reliable, great care must be taken in selecting the sample of patients. Generally the more patients that are surveyed, the more accurate will be the results (results are obtained by averaging everybody’s responses). A good way of surveying a ward would be to give the questionnaire to every patient in the ward on a particular date (or dates) of a month (for example the 5th and 15th) and to continue doing this until 100 or more questionnaires have been answered. The sample must be a typical mix of patients (sex, age, religion, degree of illness, level of education etc.).

Different questionnaires can be designed to find out whether other workers in the hospital are happy with the service a section is providing. In these cases the number of people who can complete the questionnaire is small (much less than 100) so it is important that everyone is included in the survey.

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Hospital Costing Study-Timor Leste

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