Analysis of contribution margin of ventilatorsin intensive care services of a hospital

Rani, Usha and Kumar, Naveen P (2018) Analysis of contribution margin of ventilatorsin intensive care services of a hospital. Academy of Hospital Administration, 30 (2). pp. 47-52. ISSN 0970-9452

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Background: Intensive Care Unit (ICU) is an area where intensive nursing and medical care are provided round the clock in a hospital. Intensive care beds account for at least 12% of the hospital beds and 20-40% of all hospital operating costs. Cost calculation is necessary to enhance conceptual uniformity and to optimize resource consumption. Based on the National Sample Survey in 2014, 63 million individuals or 12 million households fell below poverty line due to health expenditures (6.2% of all households). Even more disconcerting is the fact that more than 40% of those admitted to an ICU had to borrow money or sell assets. Cost analytic studies are needed for better knowledge of the costs and economics involved in intensive care of a developing country like India. Aim: To analyse the profitability margin of ventilator usage in a hospital. Six Intensive Care units were considered for the study purpose, which housed 46 ventilators. The Variable Costs, Fixed Costs and the Revenue were collected during a 3-month duration. Results: There was a 70% contribution margin from each ventilator towards the fixed costs. The Cost-Volume-Profit from total ventilators was Rs. 23,51,363/- (Rs. 51,116/- per ventilator) during the study period.

Item Type: Article
Uncontrolled Keywords: Contribution margin; ventilators; variable costs; fixed cost; Cost-Volume-Profit.
Subjects: Departments at MU > Public Health
Medicine > KMC Manipal > Hospital Administration
Depositing User: KMC Library
Date Deposited: 10 Jun 2019 04:11
Last Modified: 10 Jun 2019 04:11

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