recordin of all goods and services (direct and indirect) associated with different categories of services. In this way, the resource costs needed to treat the average case can be calculated. This type of study can provide interesting perspectives on efficiency. However, there are also important limitations. In particular, detailed costing is very time intensive, and attention is usually restricted to one or a few health care providers. For example, Lewis, La Forgia, and Sulvetta (1996) studied only a single hospital, although in considerable detail.

Some surveys have set out to estimate service specific costs. In this case, the issue of "joint" inputs-i.e., inputs that are used in the production of more than one type of servicecomprise a considerable challenge. For example, most facility staff are involved not only in the provision of outpatient services, but also in immunizations, deliveries, and inpatient care. Similarly, certain pieces of equipment may be shared across many categories of services. In terms of costing specific services, this raises the question of how the respective inputs should be allocated across the services in which they are used. This can be dealt with on the basis of _ad hoc_ assumptions, or using information collected in the survey-for example on the proportion of time staff spends on different types of activities.'<sup>8</sup> There are however some fundamental methodological concerns associated with the analysis of this type of data. in particular, in a multi-input/multi-output context, where facilities can substitute between inputs depending on the scale and scope of activities, it is far from clear how differences in unit costs across different facilities (based on an accounting approach to costing) can be interpreted.

# _oipits, activides and toug/pMes_

It is possible to conceptualize service delivery as a production process, where inputs are transformed into outputs. The "technology of production" refers to the relationship between inputs and outputs, and also determines costs. Information on outputs is clearly important from a management perspective, for example in establishing input requirements. However, the planning and management function is typically filled by routinely collected administrative data. In contrast, survey data on outputs are often collected with a view to analyzing costs and the relationship between inputs and outputs.

How should the output of a health care provider should be appropriately measured? A first issue concerns the distinction between "readiness-to-serve" capability and rendered services. At one level, we may think that the appropriate facility output is the capacity to provide services-e.g., outpatient care, immunizations, antenatal care, deliveries-rather than the actual number of cases seen. This is because households, as demanders of health services, play a part in influencing the level of utilization, so the amount of services delivered is not entirely under the control of providers. For example, low levels of utilization may be due to

> represent only 2.5 11.5 and 5.1 percent of total hospital costs for emergency patients, outpatients, and inpatients respectively,

> 84 percent of hospital budget in the Dominican Republic pays salaries. This indicates a high degree of waste in the system, and clearly demonstrates the possible divergence between expenditures and actual use of resources in the delivery of specific services.

> **17** Even in more comprehensive costing exercises, capital costs are often excluded due to problems of measurement. Capital costs arise from the use of assets in the production of services, and include the opportunity costs of the initial investments and the depreciation of the asset over time.

> 18 "Step down analysis" is a standard methodology for distributing aggregate costs across department (cost centers), and, ultimately, to final service categories (with measurable outputs). For a review of issues in the allocation of overhead costs, see, e.g., Drummond et al. (1997)

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