Analysis of Total Manufacturing cost of Hospital Compounding Products at Maharat Nakhon Ratchasima Hospital

Abstract

Abstract: Introduction. Most of the hospital compounding products (72 of 94 items) are not available in the market whereas the rest (22 of 94 items) are. The total manufacturing cost of hospital compounding products has never been studied. Objective. To determine cost of production and packing such as direct and indirect, total and unit cost and to compare cost per unit between commercial and hospital compounding products. Materials and methods. The data in fiscal year 2000, were cost of each product was classified as direct and indirect costs, each one was further devided into fixed and variable costs. And allocated each cost to each items of the hospital product by suitable allocation factor. Then all cost were summarized, therefore total and unit costs could be found. The costing of commercial products consisted of purchasing price and that of purchasing cost. Allocated cost to each item with suitable allocation factor. Finally cost per unit was calculated. Results. Total production cost 1,928,553.18 bath comprised total direct cost 96.4% and total indirect cost 3.6% the first three major expenses were raw material cost, total labor cost (fixed and variable costs) and opportunity cost of building, respectively. For total packing cost 884,549.47 bath comprised total direct cost 96.7% and total indirect cost 3.3%. the first three major expenses were packaging materials cost, total labor cost (fixed and variable cost) and opportunity cost of building. When 22 commercial products (with 25 various sizes of packing) were compared to hospital made products. It was found that 18 of 25 items of Maharat Nakhon Ratchasima Hospital were more economic and while 7 items left of commercial products were more economic. And all of the latter belonged to GPO. Conclusion. To analyse all related costs until the true total costs can be established is beneficial in various aspects. For example 1) The reasonable prices of each product can be set for patients. 2) The highest output with lowest costs con be achieved. 3) Is it worth having hospital made products? Many hospitals including Maharat Nakhon Ratchsima Hospital con produce their own compounding products, the research/study should be clearly done for policy making.