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Journal of the Academy of Hospital Administration

Cost Analysis of Hospitality Services in Paying Wards of a Large Hospital

Author(s): Bidhan Das*, R.K. Sarma**, P.C. Chaubey***

Vol. 13, No. 1 (2001-01 - 2001-06)


In the present context, there are two facets of patient care viz care and comfort, which have attained different dimensions with rapid development in the field of Medicare and ergonomics. Globalization of the economy and growth of communication during the last two decades have added a new dimension to the concept of Medicare. Healthcare is no longer the prerogative and dictate of the health care professionals. There is an increasing role of consumer of these services in as far as it relates to provisioning, type and quality of service. Consumers are more demanding now in the context of the existing consumer rights. Consumer Protection Act is an example of the dilution of Healthcare professionals" dictate with an overriding stipulation of consumer rights to receive the best possible, optimally priced, effective services.

The purchasing power of consumer is increasing with the mushrooming of market economies. This has a direct bearing on the healthcare sector also. Besides demanding "quality cure", the emphasis on 'Quality Care' has also increased. The concept of patient satisfaction is rapidly changing to customer"s delight. Given a choice, spending power permitting, one would prefer to be hospitalized in a single room rather than a multi-patient general ward.

This class of patients is on the increase. As per a study, the waiting time for a private wardroom at this hospital in 1983 was 2 months, which has now increased to almost 3 months. Due to economic recession and exponential rise in finances required for healthcare, it has been universally accepted that governments cannot sustain and provide free tertiary level care, and that these expenses have to be realized at least in part from the consumers.

Aim of the Study

This study had been initiated to do a comprehensive and scientific costing of hospitality services including nursing services at the paying ward of a large hospital.

Objectives of the Study

  • To study the hospitality services provided to patients in private wards at a large hospital.
  • To observe and establish the nursing care provided to the patients.
  • Cost analysis of the above services to determine the expenditure incurred viz a viz charges levied to the patients.
  • Assess the hospitality services in few sample corporate tertiary care hospitals in Delhi.
  • Explore the patient"s expectation of the hospitality services and the feasibility of their implementation at the hospital under study.

At present 113 rooms are available in the paying wards of this hospital.

Admission Procedure for Paying Wards:

They are generally elective and non-emergent in nature. A consultant advises the admission of the patient to paying wards on the OPD card. The patients are registered and kept on a waiting list in the medical superintendent"s office. Whenever a room falls vacant they are informed on phone to take the allotment duly signed by the medical superintendent. As the private ward patients are admitted as and when a vacancy arises it is generally not possible to coordinate it with the admission day of the unit to which the consultant belongs.

There are two categories of rooms

  • "A" Type Deluxe Rooms
  • "B" Type Rooms

It was observed from the records that the paying wards have an occupancy rate of 97%, and the waiting time is usually 3 months from the date of registration. A detailed study was done to assess the distribution of patients in one floor for one year. It was inferred that critically ill patients or patients in emergency don"t opt for a paying ward, however once the emergency is over and are convalescing they require a paying ward room.

Hospitality services at the Paying Wards

Following are the areas of hospitality services in paying wards of the Hospital:

  1. Front office/Reception
  2. Housekeeping Services
  3. Dietary Services
  4. Fire and Security Services
  5. Maintenance Services
  6. Linen and Laundry Services
  7. Barber Shop
  8. Billing
  9. Car parking

Rationalization of Charges of Paying Wards

Ever since their inception, the charges for the private wards have been revised from time to time. The changes are primarily in these areas:

  1. Room rentals
  2. Dietary charges
  3. Charges of clinical/diagnostic/therapeutic facilities availed by the patient.

To cover the increasing gap between revenue and expenditure, last revision of the private ward charges was done in 1999 and the charges fixed were admission charges Rs. 200/- (non-refundable), room rentals for "A" class room Rs. 1700/- per day, for "B" class room Rs. 1100/- per day and diet charges of Rs. 100/- per day.

It is observed that the charges have been revised from time to time not on any regular basis i.e. 1970, 1972, 1974, 1980, 1995, 1999 and the corresponding increase has no bearing with uniform scale of application of wholesale price index or any other inflationary scientific parameter on which such exercise is based. The exercises have lagged behind in real time price index as the year of application of charges has been 1 to 2 years ahead of the year when recommendations have been made.

The various cost heads that have been taken into consideration to derive the final figure are:

  • Building as well as rental value
  • Electricity consumption
  • Air-conditioning
  • Furniture and fixtures
  • Linen and laundry
  • Consumables
  • Water
  • Fire and security
  • Manpower (Nurses, Orderlies, Sweeper, Booking Clerk)
  • Maintenance
  • Food
  • Administrative expenses (including Cashier)

These are comparable to the facets of hospitality i.e. front office, house keeping, Linen and laundry, food services, maintenance and building upkeep, Security and fire etc.

The cost involved has been calculated separately for A and B class rooms. The reason for this is that the area of A class room is more than that of B, and the furniture, fixture etc. in an A class room is better both in quality & number.

Costing of Hospitality Services

Cost Heads Type A Room
(Per day)
Type B Room
(Per day)
Cost of Building Rs. 1444/- Rs. 1033/
Cost of Electricity Rs. 865/- Rs. 498/
Cost of Maintenance Rs. 208/- Rs. 148/
Cost of Security Rs. 16/- Rs.16/
Cost of Fire & Safety Rs. 25/- Rs. 25/
Cost of Water Rs. 1/- Rs. 1/-
Cost of Consumables Rs. 12/- Rs. 12/
Cost of Linen & Laundry Rs. 60/- Rs. 51/
Cost of A/C Rs. 19/- Rs. 19/
Cost of Furniture & Fixture Rs. 18/- Rs. 11/
Cost of Manpower Rs. 276/- Rs. 60/
Cost of Food Rs. 276/- Rs. 276/
Cost of Admn. Rs. 35/- Rs. 35/
TOTAL COST Rs. 3039/- Rs. 2185/

This study carried out has brought out some interesting revelations.

  1. Being a referral hospital it gets patients from all parts of the country, most of who are referred from their respective governments or organizations.
  2. The waiting time is therefore very long which is not very professional. All the clinical departments should be advised to reduce the ALS in the paying wards particularly departments like Orthopedics, Nephrology, Psychiatry etc. If these steps don"t"s help, provisions should be made for additional floors.
  3. There is no definite ear marked area for the front office functions like reception, enquiry, information center, billing, telephone services, etc. Therefore, the patients and their relatives have to go to various places in order to book for the paying wards enquiring about the allotment and when the allotment slip is ultimately handed over to them they have to go to at least three windows before they enter into the room. Therefore, it is recommended that a definite area be ear marked so as to facilitate all these functions. However, immediately the booking clerk may be shifted and asked to sit at central admission office.
  4. Since the Sister in charge of the concerned floor initiates the process of billing, it will be very convenient for all if one accountant or billing clerk could sit at this office in shifts. He or she could make the final bill and the cashier could receive or refund the amount of cash from or to the patient.
  5. There is no concept of a bellboy or guide to escort the patient to the allotted room. It will not be a costly affair if one medical social guide could be assigned this task as that of the emergency services.
  6. As is evident by the patient satisfaction survey that nursing services at this hospital are excellent but on detailed enquiry the patients did mention that they were not informed about the policies and procedures of the hospital and their schedule for the day on many instances. Therefore, the nursing staff should be trained and motivated to be more compassionate to patients as well as their visitors and interact with them more frequently.
  7. The food services were found to be of very poor quality. Patients are served vegetarian food from the kitchen. The crockery and cutlery are not of very good quality. The food timings are not to the liking of the patients. The bearers were not wearing uniforms and were shabbily dressed.
  8. Arrangements should be made for deviation in the food timings. Many patients complain that the dinner is served very early. The chief dietician should look into this matter and make the dinner timings more flexible.
  9. It was also observed that the total number of bearers is rather big and is contributing to the high cost of food as is envisaged in the study wherein the cost of lunch and dinner is Rs. 90/- each and the cost of breakfast and evening tea is Rs. 96/-. It this number could be reduced by some means it will go a long way in reducing the cost of food.
  10. It was also proved beyond doubt that the linen and laundry services need improvement. The linen in the paying wards should be changed daily and on demand. The curtains and blinds should be cleaned more frequently and should be of a better quality.
  11. There should be adequate provisioning for toilet rolls, hand tissues, face tissues and soap cakes or liquid soap in all private ward rooms and should be replenished as and when required.
  12. The sister receiving them should greet all patients coming in which a warm welcome.
  13. A check list of all items in the rooms including linen, tissues, etc. should be hung behind the door, so as to enable the Sister to verify the articles at the time of discharge.
  14. A telephone directory of the hospital with a hospital guide should be provided in each room.
  15. A suggestion book to be placed in each floor of the paying wards to enable the patients/relatives in rating the services as well as any scope of improvement.
  16. Patients frequently complained about potable water therefore the bearers should arrange for a jug of water from the Aquaguard and keep in the room and also refill it as and when required. Another option is to provide mineral water for a price.
  17. The central A.C. is not effective many a times. The plant is a very old one. Necessary arrangements to be made for installing a new A.C. plant.
  18. The list of all the patients in the paying wards are supposed to be given to the telephone exchange and Central admission office to facilitate the departments to answer queries from callers or visitors.
  19. Maintenance for all services, be it civil, electric, linen and laundry should be of first class quality, and should be separate for the main hospital.
  20. There are hardly any signs and directions for the convenience of patients. Stress should be put at this important aspect.
  21. There is no parking area demarcated for the visitors of patients in paying for the convenience of the patients in paying wards.
  22. The formulation of the discharge policy is strongly required wherein the clinicians inform their residents to prepare the discharge summary first and the nurse to be informed for the necessary bills and then the patient be told about his or he discharge.


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* CEO Jain Medical Communication Network Ltd. N.D.
** Prof. & Head Deptt. of Hospital Administration & Medical Superintendent AIIMS N.D.
*** Addl. Prof. Hospital Administration AIIMS New Delhi.

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