Costing estimation/ calculation methods

Calculating the costs of setting up a HCWM system isn't easy if one wants to take into account all the components (management, training, regulatory and technical).

This approach called system costing requires that a full description of the national HCWM system be drawn. Such a description would also include knowing for each HCF, the services offered, number of beds and occupancy rates, number of outpatients; quantity and composition of HCW produced; treatment systems used; transport requirements; etc.

Although ideal, experience shows that such an approach will be very difficult to carry out due to a lack of precise data available. We therefore suggest a simpler approach that should enable to get fairly realistic figures worked out easily.

Initial estimations

If no budget or financial information is available, getting a first rough estimation of the total annual costs of an appropriate HCWM system can be obtained quite simply [read more…]

To do so, multiply (x) one of the four different indicators listed below by its related factor, depending on what data is available (detailed information about where the factors come from can be found in Tool A of the Excel spreadsheet):

  • Total amount of HCW produced/ year x 1
  • Total number of medical staff x 750
  • Total number of beds x 150
  • Total number of small HCFs x 600 + total number of medium-sized HCFs x 6'000 + total number of large HCFs x 60'000

The totals you will obtain (USD/ year) take into account both annualized capital and recurrent costs.

As a first approach, and also costing information obtained from the field shows important variations, an average value of 1 USD/ kg of HCW treated has been used. This figure also has the advantage of being easy to memorize and use in calculations.

On average the cost repartition are typically approx. 30-40% for containerization and storage; 10-20% for transport; 5-10% for cleaning and disinfection and 40-50% for treatment.

Simplified system costing

If no budget or financial information is available, getting a first rough estimation of the total annual costs of an appropriate HCWM system can be obtained quite simply [read more…]

Costs should be divided into capital (resource items with a life time above one year) and recurrent (items which are used on a regular basis and have a life time below one year) costs.

All costs should be estimated on an annual basis. This approach helps perform meaningful additions of capital and annual costs; enables comparisons between systems and simplifies annual HCWM budgeting.

To calculate the annualized capital costs, you need to obtain for each capital cost (C) item:

  • The value (purchase price) = C
  • The lifespan (years) = L

         Annual capital cost = [insert formula]

To calculate the annual recurrent costs, you need to obtain for each recurrent cost item:

  • The unit value (purchase price) = C
  • An estimation of the annual quantities needed = Q

Multiply each unit cost by its annual quantity and add the results to obtain the total annual recurrent costs of the system.