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New approaches to measuring non-market output in national accounts: Implications for

OECD work on Health Accounts

Eva Orosz

OECD Health Division

Joint OECD/ONS/Government of Norway Workshop

“Measurement of non-market output in

education and health”

London, 3-5 October, 2006

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Overview of presentation

Basic features of the System of Health Accounts (SHA)

Main purposes and components of Health Accounts developmental work in 2007-2008 OECD Programme of Work on Health

Key issues in creating appropriate links between the “Non-market” project and the SHA developmental work

Requirements for inclusion of new methodologies in the SHA Manual Version 2.0

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Basic features of the System of Health Accounts (Version 1.0) published in 2000

International statistical standard (an integrated system of comprehensive and internationally comparable accounts and basic accounting rules)

Designed to meet the needs of health policy analysis

‘Functional’ definition of health care goods and services

ICHA (1.0): International Classification for Health Accounting:– Functions of health care services and goods (ICHA-HC)– Categories of providers (health care industries) (ICHA-HP)– Sources of funding /financing schemes (ICHA-HF)

Standard SHA tables cross-classify expenditures under the three basic dimensions

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SHA: Definition of health care

Activities pursuing, through the application of medical, paramedical and nursing knowledge and technology (including pharmaceuticals), the goals of:

promoting health and preventing disease; curing illness and reducing premature mortality; caring for persons affected by chronic illness who require

nursing care; caring for persons with health-related impairment, disability, and

handicaps who require nursing care; assisting patients to die with dignity;

providing and administering public health; administering health insurance and other funding arrangements

Regardless whether provided by health care or other institutions

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SHA implementation in OECD countries: Joint OECD, Eurostat and WHO Questionnaire

Data have been (or will be) provided to the 2006 Joint Health Accounts data collection

SHA results are available for a pilot study or some previous years. Data provided only to OECD Health Data in 2006

Data provided to OECD Health Data based on national statistics so far

Australia, Belgium, Canada, Czech Republic, France, Germany, Japan, Korea, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Switzerland, United States

Denmark, Finland, Hungary, Mexico, Sweden, Turkey, United Kingdom,

Austria*, Greece*, Iceland*, Ireland*, Italy, New Zealand,

*/SHA implementation planned or currently

underway

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Main factors limiting international comparability of health expenditure data

Differences in boundaries of the health sector (e.g., in definition of Long-term care)

Differences in applying the functional classification (e.g., separation of inpatient care, day care, outpatient care within hospitals)

Lack of reliable healthcare price indices

– For international comparison, health expenditure are deflated by economy-wide (GDP) price indices

Lack of reliable health-specific Purchasing Power Parities (PPPs)

– economy-wide PPPs are used

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Growing expectations towards Health Accounts

To contribute to the analysis of health system performance

Sustainable financing Cost-effectiveness (Outcome / Input) Technical efficiency (Output / Input) Equity in financing Equity in access to care

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Main components of Health Accounts developmental work in 2007-2008 OECD Programme

of Work on Health

Refinement of the International Classification for Health Accounts (ICHA); including the project on Estimating Expenditure by Disease, Age and Gender

Refinement of the SHA framework for health financing

Incorporating input, output and productivity measurement into the SHA Framework;

Development of reliable health-specific Purchasing Power Parities (PPPs);

Strengthening the connection between SHA and SNA

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Necessity for appropriate links between SNA developmental work with implication for health and

the SHA developmental work

Health Accounts are expected to provide relevant information for health policy analysis, and to show the importance of the health sector within the

national economy

Characteristics of the System of Health Accounts (SHA) should reflect the specific features of health systems, and have appropriate linkages to the SNA

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Development of reliable health-specific Purchasing

Power Parities (PPPs)

Status: a component of the proposals under discussion in the framework of EU Contribution to OECD work on health

Aim of the project: to develop output-based PPPs for health goods and services

– appropriate for cross-country comparison of health expenditure– provide input to economy-wide PPPs

Components – Development of concepts and methodology – Assessment of data availability and feasibility of data development – Formulation of joint OECD/Eurostat guidelines

Organisation– The OECD would set up a PPP-SHA Task Force specifically

devoted to health PPPs (takes over health-related tasks from the current Eurostat/OECD Task Force)

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Key issues in creating appropriate links between the “Non-market” project and the SHA

developmental work

To clarify the differences and explore the possibilities for harmonisation in respect to:

Key information required by National Accounts and Health Accounts (basic indicators, level of disaggregation)

Different focuses on the role of government (SHA: government financing; SNA: non-market production)

Scope of health services and goods included in output measurement (treatment of medicines)

Possible options for quality adjustment of output

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Key information required

Health Accounts: input, output and productivity

– of the whole health sector

– of resources used/spent by government (including “purchase” from private providers)

– by main type of services (inpatient, day-care, outpatient) and by main type of diseases

National Accounts: input, output and productivity

– of the health sector as a whole

– by the government as producer of the services

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Differences between SHA and SNA in the scope of services and goods included in output

measurement

Currently proposed health output (and productivity) measurement under SNA:

– does not include pharmaceuticals provided to outpatients (while pharmaceuticals are included in inpatient care)

– does not include health care administration

– includes only LTC provided in hospitals

SHA:

– As defined earlier, including all these items

Purchasing Power Parity estimation

– Includes pharmaceuticals

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Total expenditure on health services and goods defined under SHA

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Public expenditure on health services and goods defined under SHA

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Prescribed drugs

Medical service

Drugs during

treatment

Medical procedures

In-Patient care

Shift to Out-Patient care

A consistent method for comparison of output over time requires the inclusion of prescribed medicine

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A consistent method for comparison of output over time requires the inclusion of prescribed medicine

Prescribed pharmaceuticals constitute an integral part of medical therapies applied in outpatient care

Changes in medical technology (including pharmaceuticals) resulted in considerable differentiation in the nature of outpatient care

Outpatient cases differ to a great extent according to the pharmaceutical and diagnostic (laboratory, diagnostic imaging) costs they generate

A possible approach:– To connect prescribed medicine to out-patient care (as part

of cost-weights)– Similarly to inpatient care, output of out-patient care should

reflect the changes in case-mix

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INPUTS (IP)Resources, Costs

OUTPUTS (OP)e.g. DRGs, Bundle of activities, Services etc.

OUTCOMES (OC)e.g. QALYshealth related quality of life

Technical and Cost Efficiency= OP/IP

Effectiveness= OC/OP

OC/IP = Cost effectiveness = (OP/IP)*(OC/OP)

Health (Care) Production Process

The relationship between input, output and outcome

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Questions for further consideration

Option A Adjust output with quality related to delivery of

services (e.g., medical errors, waiting time, etc.) and separately develop the indicators of effectiveness and cost-effectiveness

Option B Adjust output with outcome (health-gain)

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Requirements for inclusion of new methodologies in the SHA Manual Version 2.0

Policy relevance Theoretical soundness International comparability Available data sources or adequate estimation

methods Feasibility of regular data collection under the Joint

OECD, Eurostat and WHO Health Accounts data collection in the foreseeable future