Break-Even Analysis and Willingness of CVD Patients to pay for the Service of Catheter Unit in Ramallah Hospital, Palestine

Abstract

This study has been undertaken with objectives of determining of break-even point of catheter unit and to investigate whether government subsidizes the catheter unit or not. The methodology of the study was based on cost analysis by using step-down method to allocate overhead costing. Equivalent diagnosis has been used to determine break-even point. A questionnaire consisting of 13 independevt variables was used to gather primary data from individuals to determine willingness to pay (WTP) and to estimate the demand function for this unit. Sensitivity analysis has been used to estimate the economic benefit for patients and government. From the findings of the study, it was revealed that variable cost consitst of 56% of total cost, while fixed cost consists of 44% the same. OLS method has been used to estimate the unit variable cost for each function. It was found that the unit variable cost for Diagnosis is $141, for Balloon is $532. and for Pacemaker is $1,690. Break-even point for each function has been estimated as Diagnosis, Balloon, and Pacemaker. It was found that actual numbers of patients who obtain service exceed the break-even point in each function. Further it was revealed that for diagnostic test, all income groups are willing to pay higher than the costs. For Balloon, rich patients can leave a difference which can cover 23.5% of ppr Balloon patients. For Pacemaker, income groups are willing to pay lower than the costs. Economic benefit for patient was estimated of $4,480 for five years, $8,960 for ten years, $13,440 for 15 years, and $17,920 for 20 years. Expected benefit for government from each patient was estimated of $ 1,636 for five years, $3,295 for ten years, $4,955 for 15 years, and $6,614 for 20 years. The policy recommendations to improve this service in Palestine can be proposed as follows: the government can increase the capacity of the present catheter unit by providing more subsidizes. And also establish another catheter unit in Gaza strip to provide more service to the people.