Comparative assessment of operational costs and funding gaps in rural and urban primary healthcare (PHC) facilities in Kaduna State, Nigeria

Abstract

Primary healthcare (PHC) is essential for achieving universal health coverage in Nigeria, yet chronic underfunding limits its effectiveness, with only 20% of facilities nationwide operational. This study analyzes operational expenditures, revenues, and funding gaps across urban and rural, and highly utilized and lowly utilized PHCs to inform direct facility financing (DFF) decisions. This is a cross-sectional retrospective study design, data were collected from four purposively selected Basic Health Care Provision Funds (BHCPF)-funded PHCs (two urban, two rural) using a pre-tested Excel-based costing template covering 14 expenditure and 15 funding components. Retrospective costs and revenue from December 2023 to May 2024 were annualized, adjusted for inflation, and analyzed using unit costs, sensitivity ranges (± 20%), and Ordinary Least Squares (OLS) regression to identify cost drivers. Findings reveal a mean annual operational unit cost of ₦12,477,857 ($7,799), with revenues of ₦5,320,338 ($3,325), yielding a funding gap of ₦8,811,524 ($5,507). Rural PHCs incurred 98% higher costs than urban PHCs (₦16.58 M vs. ₦8.38 M), while highly utilized facilities incurred 78% higher costs than lowly utilized facilities. Regular personnel (43.2%) and drugs/consumables (28.5%) accounted for the most significant expenditures. OLS regression confirmed these as key drivers (R² = 0.998). The study concludes that systemic underfunding and the implementation of recommended targeted DFF allocations, particularly for rural, high-volume PHCs, will enhance sustainability, equity, and service delivery in the PHCs studied in Kaduna State.