Arua Regional Referral Hospital has been faced with the increased cost of health care inputs. However, there was a knowledge gap of actual costs and budget needed to provide quality health care services in the hospital. The primary rationale of this study was to determine the costs of providing health services in the financial year 2005/ 2006 in ARRH. The cost analysis information would provide a basis for management, decision-making, budgeting, planning, advocacy for increased funding, improved efficiency and monitoring. This was a descriptive cost analysis a providers perspective that included Step-down cost accounting and Micro-costing methodologies. It was done in Arua Regional Referral Hospital and covered the financial year 2005/ 2006. Data were collected by review of records, observations, and interviews. The total cost of ARRH health services amounted to Ushs. 5.4 billion inclusive of ARVs costs. The recurrent budget represented less than 50 % of the total cost. The major cost drivers of total hospital cost were personnel and medicines accounting for 76 % of the total hospital operational cost.

Dr. Olaro Charles is currently the Director of Clinical Services in the Ministry of Health, Uganda. He is also a Senior Consultant Surgeon. Having served in a number hospital; St Marys Lacor, Mulago, Arua, and Fort Portal. He Holder of MBChB (MUK), MMed (MUK) Surgery, Fellow of College of Surgeons (ECSA), MSc HSM (UMU) and MBA (ESAMI).