08. Costing Essential Services Package An Issue Paper

Costing Essential Services Package: An Issue Paper 25
7. Key Findings
Based on the indepth analysis of the relevant studies, brainstorming sessions and one-to-one
discussion with the relevant persons, the following key issues are in order so as to improve
upon the ESP Costing framework in the future:
1. Both the top down and bottom-up procedures generate useful information. However,
appropriate combination (matching) of top-down (allocation) and bottom-up (accounting)
procedures is needed to arrive at a closer-to-reality costing estimate.
2. The level of accuracy and utility of top-down estimation of salary and operating
expenditure can be enhanced through thorough work pattern analysis. This needs to be
done in the future to get rid of the assumption that existing staff, skill mix, work efficiency
and working routines are adequate. Available information on work pattern analysis can
be gainfully utilized in the process. A detailed study involving various dimensions of
work pattern analysis is warranted.
3. Information about full cost of ESP by components should be made available and be
applied to meet the requirements of technical efficiency, allocative efficiency and
dimensions of financial sustainability.
4. Information about non-ESP in ESP and ESP in non-ESP should be available. Wide use
of ‘notions’ and ‘guesses’, and ‘rule of thumb’ should be gradually replaced by
apportionment exercises to the extent feasible. These exercises are needed also for
capital and joint cost allocations.
5. Input-coefficients need to be estimated. This is necessary to work out optimal input
combinations and measurement of cost-efficiency.
6. Unit costs by major areas of ESP upto certain level of details are needed. Unit cost by
services by type of facilities needs to be worked out. Appropriate apportionment
exercises are needed to estimate unit cost by components.
7. ESP costs’ share to the poor, women and poor men and women need to be estimated to
have clearer idea about the equity consideration of public health benefits. Studies on
user-profile and benefit-incidence may appear useful.
8. Appropriate means and ways need to be devised to ensure that the consensus reached
are followed-up.