Health care cost accounting in the Indian hospital sector

Abstract

Setting reimbursement rates in national insurance schemes requires robust cost data. Collecting provider generated cost accounting information is a potential mechanism for improving the cost evidence. To inform strategies for obtaining cost data to set reimbursement rates, this analysis aims to describe the role of cost accounting in public and private health sectors in India and describe the importance, perceived barriers, and facilitators to improving cost accounting systems. In-depth interviews (IDI) were conducted with 11 key informants. The interview tool guide was informed by a review of published and grey literature and government websites. The interviews were recorded for both audio and video and transcribed. A thematic coding framework was developed for the analysis. Multiple discussions were held to add, delete, classify, or merge the themes. The themes identified were: the status of cost accounting in the Indian hospital sector, legal and regulatory requirements for cost reporting, challenges to implementing cost accounting, and recommendations for improving cost reporting by healthcare providers. The findings indicate that the sector lacks maturity in cost accounting due to a lack of understanding of its benefits, limited capacity, and weak enforcement of cost reporting regulations. Providers recognize the value of cost analysis for investment decisions but have mixed opinions on the willingness to gather and report cost information, citing resource constraints and a lack of trust in payers. Additionally, heterogeneity among providers will require tailored approaches in developing cost accounting reporting frameworks and regulations. Healthcare cost accounting systems in India are rudimentary with a few exceptions, raising questions about how to source these data sustainably. Strengthening cost accounting systems will be contingent upon developing standardized formats that generate sufficient information for policymaking, are acceptable to private providers, and can be integrated with the existing data management systems.