Financial Breakeven for Small Maternity Centres

The following is a very simple model for financial sustainability in small maternity centres. This is derived from a number of complex and detailed models used across a range of different country settings.

Ensuring that we meet safety and quality standards, and client affordability, I have not been able to find a breakeven at less than 80 deliveries per facility per month.

This is essentially a people business, the payroll can be as much as 65% of total expenditure.

Breakeven BalanceFacilities providing CEmONC services need to operate on a 24/365 basis. On each shift, we need minimum staffing of one medical officer, one midwife and one clinic aide. This assumes that anaesthesia when needed, will be provided on a sessional basis by calling one of a number of appropriate specialists from an on-call pool.

Across each week there are 21 eight-hour shifts, and the normal working pattern will be five shifts per week. Therefore we need at least 4.2 FTEs for each staff role, ideally, 5 to cover for holidays, offs and training days etc.. Yes, there are other shift patterns which can be deployed but the number of FTEs required will be much the same.

Let’s push the limits a bit and staff at just four FTEs per role. When modelled for an example country:

  • Monthly payroll for four each of MOs, Midwives and Clinic Aides = ~£10,500.
  • Thus the total monthly expenditure = ~£16,000.
  • Let’s call this £17,500 which provides some contingency and perhaps a small surplus.
  • Typical service prices for the same country are £125 for a normal vaginal birth and £375 for a C-section.

Whilst noting that income can be earned from the provision of other services, let’s just model the minimum number of deliveries required in order to fully recover the above monthly expenditure.

We only want to provide C-sections when indicated and so a maximum service mix would be 80% NVD and 20% C-section. From this, we derive an average income per delivery of £175, and thus we need to provide at least 100 deliveries each month in order to break even.

I have repeated this modelling many times, in much greater detail, and across multiple country settings, and have never been able to find a breakeven at less than 80 deliveries per facility per month, without exceeding guidelines for the C-section ratio, or without reducing staff numbers below safe and efficient levels, or without being paid higher rates which are often unaffordable for the majority client paying out-of-pocket.

 

About Kevin Duffy

Interim Management and Consulting - Global Healthcare Development. Kevin has over ten years of senior management experience in the delivery of healthcare services in Africa and South Asia. His current focus is on the strategic development of policy, guidance, and tools to help healthcare organisations achieve sustainable impact – balancing the need to become financially sustainable, with the mission of ensuring equitable access to affordable healthcare services.
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