Abstract: Malta, like many other countries, is faced with the problem of sustaining the coverage and quality of the services offered by its public health system in the face of a rapid rise in health care costs. Within this context, local public health services must undergo the necessary transformation in order to meet future needs, expectations and demands of health care consumers. The aim of this paper is to estimate the ‘shadow prices’ of ten surgical procedures that are carried out in the public health system in Malta, namely at St. Luke’s Hospital. The Accounting approach was used and results were compared to prices charged by a private hospital in Malta, namely St. James Hospital in Sliema. The methodology used in this costing study may be beneficial for the setting up of a Diagnosis-Related Group System in the Maltese Public Health system.

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