Consideration of cost takes an increasing amount of the attention of managers in health facilities and at district, regional and national levels of the health service. This concern applies in both the public and private (including both for-profit and not-for-profit) sectors. In 1994, in collaboration with UNICEF and the Aga Khan Foundation, WHO published Cost analysis in primary health care¹ to strengthen the management of primary health care programmes. Hospitals absorb the bulk of health spending in most countries, however, and the evidence suggests that there is considerable scope for improving the management of these resources. That is why this manual was prepared. A draft was completed in early 1997 and its usefulness to managers was tested through workshops in Bangladesh and Zimbabwe that year, and in Egypt in 1999. The present publication incorporates feedback from the workshop participants.

This manual is intended to help managers at various levels of the health system understand how cost analysis can assist decision-making, as well as to help them define and institutionalize relevant costing systems. The manual gives methodological guidance and it is expected that each country can and should develop its own costing strategy and specific methodologies on the basis of managerial needs and the availability of relevant information. It is hoped that the manual will facilitate national processes for developing hospital costing strategies and methods.

HRF