Methodological problems of forming the costing of medical services and cost accounting in public healthcare organizations

Abstract

This study examines the current state of medical service costing in public healthcare organizations through a document-based review and quantitatively assesses methodological problems in cost accounting. The empirical basis consists of annual financial reporting data from four healthcare organizations for the period 2019-2025. Costing was evaluated using a three-stage framework: cost accumulation, allocation across organizational units, and assignment to a unit of service. Cost was estimated using a partial identification approach and expressed as an interval range. The results are as follows. Only the first stage of the costing chain is supported by documentary evidence, while the cost allocation base is specified neither in the accounting policies nor internal administrative orders. The share of costs directly attributable to a service decreased from 50.7% in 2019 to 11.3% in 2024, implying that eight-ninths of total costs reach the service unit through an unobservable allocation mechanism. The cost of one bed-day ranges from UZS 67.4 thousand to UZS 597.7 thousand, while the ratio of the upper to lower bound widened from 1.97 to 8.87. When two additional conditions are introduced, the interval narrows to UZS 512.4-571.2 thousand and the ratio declines to 1.1, without requiring the collection of any new data. The sensitivity coefficient with respect to the measurement base increased from 1.09 to 4.33. International comparison shows that the 20.3-fold variation reported for hospitals in India reflects actual differences across organizations, whereas the 8.87-fold interval identified in our study arises within a single organization due to uncertainty in the measurement method. A five-element costing model is proposed, with all elements relying on data available from existing reporting forms.