# Hospital Industry Costing
## Cost Unit
For hospitals, the cost unit is cost per bed per day.
## Methodology
The calculation approach is the same as for hotels:
1. Different categories of beds (e.g., General Ward, Semi-Private, Private, ICU) may carry different cost ratios.
2. Convert all beds into Equivalent Beds using the ratios.
3. Cost per Equivalent Bed =
$$\frac{\text{Total Cost}}{\text{Total Equivalent Beds}}$$
4. Multiply by the category ratio to find cost for each category of bed.
## Key Difference vs Hotel
Only the cost unit terminology changes — from 'room per day' to 'bed per day'. The underlying method (equivalent units approach) is identical.
## Other Considerations in Hospital Costing
- Occupancy rate of beds (similar to bus occupancy)
- Separate cost for departments (OPD, IPD, ICU, OT, Pathology, etc.)
- Distinction between fixed costs (salaries, rent, depreciation of building/equipment) and variable costs (medicines, food, utilities consumed per patient)