A package is profitable or not at your cost base, not at anyone else’s. The calculation is arithmetic you can do before committing to volume.
The six lines
| Cost line | Usually measured as | Should be measured as |
|---|---|---|
| Consumables | Departmental average | Actual per case type |
| Implants and devices | Ignored if inside the package | Actual invoice cost per case |
| Bed-days | Standard length of stay | Observed length of stay for this case mix |
| Theatre and equipment time | Not attributed | Time occupied, at a loaded rate |
| Clinician cost | Fixed salary, treated as free | Attributed per case |
| Working capital | Not counted | Cost of the settlement delay |
Average cost per case is the wrong denominator
Scheme case mix is not the same as private case mix, so an average built across all patients does not describe the scheme cohort. The number that matters is cost for the case types the packages actually cover, computed from the cases you actually did.
The line that is always omitted
Working capital. A package that covers cost but settles slowly is still a financing decision: the hospital funds consumables, salaries and the stay for the period between discharge and settlement. That period is a real cost, and leaving it out makes marginal packages look viable.
Questions we get asked
How should a hospital decide whether scheme volume is worth taking?
By costing the specific packages against what those specific case types consume, using observed length of stay and actual consumable and implant costs rather than departmental averages. Scheme case mix differs from private case mix, so an average across all patients does not describe the cohort the packages cover.
Why does settlement delay matter in scheme package costing?
Because the hospital funds the entire episode until settlement arrives, and that financing has a cost. A package that covers direct cost but settles slowly is still consuming working capital, and omitting that line is what makes marginal packages appear viable when they are not.
On the figures in this piece. Every rupee amount above is arithmetic on the assumptions stated beside it, not a market statistic. Where you need published Indian claim data with its source named, that sits on claim data. We publish no figure we cannot show the working for.