measuring health output and productivity in the uk: an essential element of public accountability uk...

Measuring health output and productivity in the UK: an essential

element of public accountability

UK Centre for the Measurement of Government Activity

Phillip Lee, James Hemingway & Christopher Little

OECD/ONS/Govt of Norway Workshop,

London, 3 October 2006

Outline

• UK National Health Service

• Output – data & methodology

• Input – data & methodology

• Output & productivity estimates

• Current work

UK National Health Service

• Public services in UK account for ~20% total GDP

• NHS largest public service: 30% final govt consumption

• Health expenditure in UK (2005):

– £88 billion (public); £13 billion (private)

• England (82%), Scotland (10%), Wales (5%), Northern

Ireland (3%)

• Separate activity & financial data collection

Output, Input & Productivity

• Productivity = (Output volume)/(Input volume)

• Require output & input measures on same

basis

• Output – Cost-weighted activity index

(Laspeyres)

• Input – Expenditure deflated for price/salary

increases

Volume of Health Output – Methodology

• Data available from England & NI – proxy for UK

• England

– 1900 activity types

– 81% coverage by expenditure (2005)

• Northern Ireland

– 1500 activity types

– 79% coverage by expenditure (2005)

Volume of Health Output – Activity Data

• Secondary Care (Hospitals) – Episodes of treatment (FCEs),

classified by diagnosis/procedure (DRG-like scheme)

• Outpatients – number of appointments by specialty

• Community healthcare – number of appointments by specialty

• Primary Care (General Practice) – number of appointments

• Dentists, Optometrists – number of appointments

• Ambulance services – emergency journeys by specialty

• NHS Direct phone/internet services, walk-in centres – number of

activities

• Prescription drugs – number of prescriptions

80

90

100

110

120

130

140

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Volume of Health Output – National Accounts Index 1999 = 100

Average growth:+3.2 per cent a year

Volume of Health Input – Methodology

• Resources used in the production of NHS activities

• Labour (e.g. medical, administrative staff)

• Procurement (e.g. drugs, electricity)

• Capital (e.g. buildings, equipment)

• Convert to volume measures by removing changes

in pay & prices over time (deflators)

Volume of Health Input – Methodology 2

• Detailed expenditure & deflators for Labour &

Procurement are England only

• Calculate aggregate deflator for Labour & Procurement

for England as proxy for UK

• Apply to current price UK expenditure figures to get

volume Labour & Procurement input

• Add to UK volume of input measure for Capital

Volume of Health Input – Estimates

• Experimental options lead to a range of input estimates:

• Labour

– Counts of staff hours (direct)

– Deflated staff costs (indirect)

• Capital

– User costs (capital services)

– Depreciation (capital consumption)

• Procurement

– Alternative deflators for prescription drugs

80

90

100

110

120

130

140

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Volume of Health Input

Highest growth: +4.6 per cent a yearIndirect labour, Paasche drugs deflator, Capital services

Index 1999 = 100

Lowest growth: +3.9 per cent a yearDirect labour, NIC drugs deflator, Capital consumption

Health Productivity – Estimates

• Productivity = (Output volume)/(Input volume)

• National Accounts output volume series

• With/without experimental adjustments to output

volume for quality

• Range of experimental input volumes

80

90

100

110

120

130

140

1999 2000 2001 2002 2003 2004

Index 1999 = 100

Including quality adjustments: +5%

Without quality adjustments: +3.8%

Volume of Health Output – With & Without Quality Adjustments

90

95

100

105

110

1999 2000 2001 2002 2003 2004

Index 1999 = 100

Lowest inputs growth-0.9% pa

Highest inputs growth-1.5% pa

Productivity – Without Quality Adjustments

90

95

100

105

110

1999 2000 2001 2002 2003 2004

Index 1999 = 100

Lowest inputs growth+0.2% pa

Highest inputs growth-0.5% pa

Productivity – With Quality Adjustments

Current Work

• More accurate measures of primary care

• Improved data & methodology for hospital activity

• Better input volume measures

• Wider UK coverage

• Public consultation

– Quality adjustments

– Value of health adjustment

Summary

• UK health output series based on direct measurement

• Comprehensive, but improving with wider geographic &

activity coverage

• Experimental quality adjustments to output

• Advanced measure of productivity being developed

• Includes experimental ‘direct’ measures of labour and

capital

Contact

christopher.little@ons.gsi.gov.uk