Issued under the USAID Health Policy Initiative (HPI) indefinite quantity contract (IQC), this task order project on costing is a three-year project developed in response to the PEPFAR country teams requests for a mechanism to generate data on cost-effective interventions for health services and programs to support evidence-based decision making. The project supports missions in the areas of HIV/AIDS, family planning/reproductive health and maternal health, and health systems strengthening.The purpose of this implementing mechanism is to generate data on cost-effective interventions for health services and programs to support evidence-based decision-making and strengthen host country strategic information capacity. This is a global mechanism that is aligned to the Botswana Partnership Framework and the Botswana Integrated Health Sector Plan and which aims to assist host country governments to implement cost-effective HIV programs. To this end, Futures will provide: national, regional and local leaders and stakeholders costing data for policy and programmatic decision making; direct technical assistance to evaluate and assess resource allocation for public health programming and cost effective policy priorities; conduct training to bolster in-country expertise among policy national regional and local leaders and stakeholders to utilize, analyze, interpret, and present timely and accurate costing data for evidence-based decision-making and advocacy; publish, disseminate, and present relevant information to inform host country policy makers with cost data for decision-making information and analysis for program planning, and document processes for replicating this work. In Botswana, focus will be on National Health Accounts and health service costing.

Despite large increases in health spending per annum in the Botswana health system, there has never been a comprehensive assessment conducted on the cost of providing health care, which is important for assessing the efficiency of the health system. The latest NHA has revealed that Botswana is over the Abuja target, yet underachieving in the Millennium Development Goals largely caused by high spending in clinical care at the expense of primary health care and prevention. There are also questions as to whether the current financing system remains viable in the current economic climate. The new National Health Policy and Integrated Health Service Plan calls for a review of health financing in the country. Data on both health expenditures and the cost of providing health care are needed to guide policy development.

The first National Health Accounts (NHA) was completed in 2006 and a second round (2007-10) is currently being finalized. NHA will be institutionalized within the MOH with FY 2011 funding. In FY 2012, the MOH will conduct the next round of NHA. Technical assistance will be needed to ensure that the processes are followed accurately and to support the analysis and development of policy briefs. This will be the last year of support to NHA.

In addition, the GOB will undertake a study to determine the cost of health services. Such an undertaking will look at inputs and how they vary between health facilities in relation to outputs as measured by utilization of services. The utilization of services will include inpatient and outpatient services and other ancillary services such as drug prescriptions, laboratory tests, radiology and other diagnostic procedures. This will help to track if there are changes in inputs including technology, prices and productive efficiencies, which might need reallocation of resources. In summary, the study will specifically address the following: 1) estimating unit costs and conducting comparisons among health facilities; 2) assessing efficiency using health facility service indicators; and, 3) assessing availability of health personnel providing health services. This funding will be used to engage a technical partner to undertake the study while building the capacity of the MOH to do so in future. The partner, along with MOH staff, will collect data on: 1) Recurrent Costs: a) direct costs (labor, drugs, other supplies and food); b) indirect costs(all costs which cannot be directly identified with any of the departments/cost areas, i.e., administration staff costs, utilities, insurance, etc.); 2) Capital Costs; 3) Health facility indicators: bed occupancy rates, bed turnover rates, average length of stay; and, 4) Staff availability: against the recommended established in selected health facilities. The outcome will be a breakdown of the unit cost of providing health services for inpatient day, outpatient visit, and health facility services indicators (bed occupancy rates, bed turnover rates, and average length of stay) and staff availability in health facilities. This information will be used to inform health financing policy and rationalization of budget allocations. This will be the last year of funding for health services costing.

This is a focused HSS intervention with linkages to all other technical areas. Health financing reform will assist the government identify wastage which should free funds for HIV/AIDS prevention, care and treatment.