Hub and Spoke Model in Health Care – A Descriptive Study to Determine the Operating Cost for Running a Hospital in India

Aim and Objective: The aim of this study is to evaluate the costs incurred in providing medical services at hospitals in India. The primary objectives are to identify various cost centres involved in patient services and to estimate the cost of rendering all services per patient, per inpatient days and on various other parameter. Methodology: This study analyzes the cost structures of four hospitals (Hospitals A, B, C, and D), catering to diverse clientele including employees, their families, retired staff and local residents in emergencies. The hospitals offer services free of charge, covering outpatient care (OPD), inpatient care (IPD), radiology, laboratory services, and emergency care. Data for the study includes metrics from April 2022 to March 2023, such as OPD and IPD loads, surgeries performed, and radiology and lab loads of various hospitals. The total operating cost of all hospitals was calculated and subsequently categorized into the following components: manpower cost, cost of drugs and medical equipment consumables, infrastructure cost, and other service-related costs. This categorization enabled a detailed analysis of expenditure patterns across different operational areas within the hospitals. The study utilizes descriptive cross-sectional retrospective record-based analysis, with data collected from various hospital departments and analyzed using Microsoft Excel. Results: The study reveals significant disparities in operational costs among the hospitals. Manpower costs are the highest expenditure, particularly for Hospital D. Drugs and medical equipment costs vary, with Hospital C having the highest percentage expenditure. Hospital utilization indices indicate that Hospital D functions at nearly full capacity, demonstrating higher patient turnover rates and more efficient resource utilization. In contrast, Hospital C operates at the lowest operational efficiency among the hospitals studied. Conclusion: Effective healthcare management requires strategic resource allocation and optimization. Manpower is a major cost driver, highlighting the need for efficient resource use. Disparities in infrastructure costs suggest tailored investment strategies are necessary. These findings should guide decision making to improve healthcare service quality and sustainability.