S everal attempts to strengthen newborn care in India have been made, but a review of these interventions found that their overall impact on neonatal mortality was limited [1]. Under the National Rural Health Mission, newborn care has become central to the child survival strategy both in community and facility level interventions. Hospital- based neonatal units are being strengthened in India to provide specialized treatment services, which are classified into different levels. Level II care includes Special Care Newborn Units (SCNUs) at the district hospital level. These units are equipped to handle sick newborns other than those who need ventilatory support and surgical care. The level III units are the neonatal intensive care units [2]. In order to strengthen provision Cost of Neonatal Intensive Care Delivered through District Level Public Hospitals in India SHANKAR PRINJA, NEHA MANCHANDA , *PAVITRA MOHAN, † GAGAN GUPTA , $ GHANASHYAM SETHY, # ASHISH SEN, *HENRI VAN DEN HOMBERGH, AND RAJESH KUMAR From the School of Public Health, Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, India; * UNICEF India Country Office, 73, Lodhi Road, New Delhi, India; † UNICEF, E-7/650 Arera Colony, Shahpura, Bhopal 462 016, Madhya Pradesh, India; $ UNICEF, UNICEF Office for Bihar, 8, Patliputra Colony,Patna, Bihar, India and # UNICEF Field Office for Orissa, 44, Surya Nagar, Bhubaneswar, Orissa, India. Correspondence to: Dr Shankar Prinja, Assistant Professor of Health Economics, School of Public Health, Post Graduate Institute of Medical Education and Research, Chandigarh 160 012, India. shankarprinja@gmail.com Received: September 24, 2012; Initial review: October 29, 2012; Accepted: December 20, 2012. Objective: To assess the unit cost of level II neonatal intensive care treatment delivered through public hospitals and its fiscal implications in India. Design: Cost analysis study. Setting: Four Special Care Newborn Units (SCNUs) in public sector district hospitals in three Indian states, i.e. Bihar, Madhya Pradesh and Orissa, for the period 2010. Methods: Bottom-up economic costing methodology was adopted. Health system resources, i.e. capital, equipment, drugs and consumables, non-consumables, referral and overheads, utilized to treat all neonates during 2010 were elicited. Additionally, 360 randomly selected treatment files of neonates were screened to estimate direct out-of-pocket (OOP) expenditure borne by the patients. In order to account for variability in prices and other parameters, we undertook a univariate sensitivity analysis. Main Outcome Measures: Unit cost was computed as INR (Indian national rupees) per neonate treated and INR per bed-day treatment in SCNU. Standardized costs per neonate treatment and per bed day were estimated to incorporate the variation in bed occupancy rates across the sites. Results: Overall, SCNU neonatal treatment costs the Government INR 4581 (USD 101.8) and INR 818 (USD 18.2) per neonate treatment and per bed-day treatment, respectively. Standardized treatment costs were estimated to be INR 5090 (USD 113.1) per neonate and INR 909 (USD 20.2) per bed-day treatment. In the event of entire direct medical expenditure being borne by the health system, we found cost of SCNU treatment as INR 4976 (USD 110.6) per neonate and INR 889 (USD 19.8) per bed-day. Conclusions: Level II neonatal intensive care at SCNUs is cost intensive. Rational use of SCNU services by targeting its utilization for the very low birth weight neonates and maintenance of community based home-based newborn care is required. Further research is required on cost-effectiveness of level II neonatal intensive care against routine pediatric ward care. Keywords: Child health, Costing, Economic evaluation, SCNU, Neonatal intensive care. RESEARCH P H P H P H P H PAPER INDIAN PEDIATRICS 765 VOLUME 50 __ AUGUST 15, 2013 and utilization of neonatal services, Government of India recently launched a Maternal and Newborn Safety Program (Janani Shishu Suraksha Karyakram, JSSK), a scheme for provision of free delivery services and treatment for sick newborn till 30 days of birth in public hospitals [3]. Neonatal intensive care is regarded as one of the most expensive components of paediatric health care [4,5]. This makes it important to gain insights into the cost of facility-based newborn care. Previous studies have limited their focus on the paediatric treatment costs for particular diseases and in focal geographic areas [6, 7]. Neonatal costs have been assessed in tertiary-care setting only, and the methodology of these studies does not allow PII: S097475591200822