National Accounts Working Party14-16 October 2008

Paris

Towards measuring the volume of health and education services

Draft OECD Handbook

Paul Schreyer, OECD/STD

National Accounts Working Party14-16 October 2008

Paris

Towards measuring the volume of health and education services

Draft OECD Handbook

Paul Schreyer, OECD/STD

Contents

• Background

• General concepts

• Education

• Health

• Way forward

Background: OECD Project

• Strong and continued demand for output measures of education and health by policy-makers

• European Regulation• Project started in 2005, endorsement by CSTAT• Builds on previous work: Eurostat Handbook on

Volume and Prices, Atkinson Report, country experiences

• Workshops in London (2006) and Paris (2007)• Objectives:

– OECD Handbook– Data development

• First draft of handbook presented to WPNA 2007

Background: An old question – what is new?

1. Joint work with sector specialists

• Elaborated jointly with OECD’s specialised networks– Network of education experts– Network of health experts

• Both networks have strong interest in measuring appropriate volume output

Background: An old question – what is new?

2: Joint treatment of temporal and spatial dimensions

• Education and health PPPs are of great importance to analysts

• PPPs and national accounts have to be consistent

• Handbook deals with both dimensions in parallel

Concepts and terminology

• Distinction must be made between inputs, outputs, outcomes -

• Best explained by way of a graph

Inputs

Labour, capital, intermediate

inputs

Environmental factors

Information about outcome is a

possible tool for quality adjustment

Process without explicit quality

adjustment

Process with explicit quality

adjustment

Example education: number of

pupils/pupil hours by level of education

Example education: quality-adjusted number

of pupils/pupil hours by level of

education

Example health: number of complete

treatments by type of disease

Example health: quality-adjusted

number of complete

treatments by type of disease

Outputs

Information about outcome is a

possible tool for quality adjustment

Direct outcome

Indirect outcome

Knowledge and skills as measured by

scores

Health status of population

Future real earnings,

growth rate of GDP,

well-rounded citizens

etc.

Outcomes

Inhereted skills, socio-economic background, etc.

Hygene, lifestyle, infrastructure etc.

Inputs

Labour, capital, intermediate

inputs

Environmental factors

Information about outcome is a

possible tool for quality adjustment

Process without explicit quality

adjustment

Process with explicit quality

adjustment

Example education: number of

pupils/pupil hours by level of education

Example education: quality-adjusted number

of pupils/pupil hours by level of

education

Example health: number of complete

treatments by type of disease

Example health: quality-adjusted

number of complete

treatments by type of disease

Outputs

Information about outcome is a

possible tool for quality adjustment

Direct outcome

Indirect outcome

Knowledge and skills as measured by

scores

Health status of population

Future real earnings,

growth rate of GDP,

well-rounded citizens

etc.

Outcomes

Inhereted skills, socio-economic background, etc.

Hygene, lifestyle, infrastructure etc.

If outcome indicators are used for quality adjustment, they:

•Should control for any other factors that affect outcome for

consumers (e.g. socio-economic background of pupils,

environmental impact on health)

Quality adjustment

• First and important step towards capturing quality change is the correct stratification, i.e., the comparison of products with the same or at least similar characteristics.

• Explicit quality adjustment may make it necessary to invoke outcomes

• Handbook:– Health: discussion but no proposals for explicit quality

adjustment – Education: discussion and proposal for explicit quality

adjustment (exam scores) for secondary-level education

Values and weights

• Current price values of non-market production = sum of costs

• Volumes:

1.Direct volume index =volume change of items, aggregation with cost weights

2.Deflation: apply price index to values• (Quasi) price index = unit costs: costs per unit

of output • as opposed to costs per unit of input

Education – comparisons in time (1)

•Basic approach:

•Unit of output = (quality-adjusted) volume of teaching services delivered

•Broadly, measured as pupil (hours), the number of hours during which pupils receive teaching services

•But differentiation according to level of education important

Education – comparisons in time (2)Output-based methods

Pre-primary education Number of pupil-hours

Primary education

Number of pupils, adjusted for change in pupil attainmentNumber of pupil hours*Number of pupils*

Primary education: general

Primary education: special education, e.g., for disabled pupilsNote: The sub-stratification normal / special could be replaced by coefficients reflecting the extra costs for social services provided to disabled pupils

Secondary education

Lower secondary: general

Lower secondary: special classes, e.g. for disabled pupils

Upper secondary education: general + pre-technical or pre-vocational

Upper secondary education: vocational

Post-secondary non-tertiary education

Education – comparisons in time (3)

Tertiary education

Credits (ECTS) Full-time equivalent students*Enrolled students*

Tertiary education with practical and occupation-specific programmes

Tertiary education with more theoretically-based programmes Note: differentiation by field of education useful

•To be developed: measuring research output of tertiary education establishments•To be completed and corrected: annex table with country practices

Education – comparisons in space

•In the past, PPPs for education based on comparison of input prices (teacher’s wages etc.)

•Significant difficulties in measuring comparable input costs

•Eurostat/OECD Taskforce on PPPs for education:

•Examined output-based approach•Concluded that it yields more plausible results than input-based measures

Education – comparisons in space

Approach:

•Stratification by level of education

•Unit of output: pupil-hour (teaching received)

•Secondary education: explicit quality adjustment with PISA scores, corrected for socio-economic variables

Health – comparisons in time (1)•Disease-based approach

•Increasing number of countries use disease-based approach

•Reflects changes in administrative practice (e.g. shift to DRG system in Germany’s hospital administration)

•Unit of output = (complete) treatment

•But differentiation by type of activity important•Unit of output may vary between activities

Health – comparisons in time (2)ISIC rev 3.1 & 4 Output-based methods

Hospital activitiesAcute Hospitals 8511 & 8610 (Quasi) Price index based on DRGs (cost or

revenue-weighted)Direct volume index based on DRGs (cost or revenue-weighted)Direct volume index based on ICD categories (e.g., number of discharges by category with quantity-weights such as shares in hospital days)

Mental health and substance abuse hospitals

8511 & 810 (Quasi) Price index based on DRG-like categories (cost or revenue-weighted)Direct volume index based on DRG-like categories (cost or revenue-weighted)Direct volume index based on ICD categories (e.g., discharge numbers with quantity-weights such as shares in day care days)Number of discharges*Number of days of care*

Speciality (other than HP.1.2) hospital

8511 & 8610

Health – comparisons in time (3)

Health – comparisons in time (4)

Health – comparisons in time (5)ISIC rev 3.1 & 4 Output-based methods

Other human health activitiesNote: the list of services below is not exhaustive as other human health activities covers very heterogeneous activities Other health practitioner consultations

8519 & 8690

Direct volume index based on number of consultation by type of consultation (cost or revenue-weighted)

(Quasi) Price index based on average cost or revenue per consultation (cost or revenue-weighted)

Relevant component of Consumer Price Index if applicable**

Number of consultations*

Number of tests performed*

Number of cases treated*

Other outpatient visits 8519 & 8690Family Planning centres 8519 & 8690Outpatient mental health and substance abuse centres

8519 & 8690

Free-standing ambulatory surgery centres

8519 & 8690

Dialysis care centres 8519 & 8690Other outpatient multispecialty and cooperative service centres

8519/8531 & 8690

All other outpatient care centres 8519/8531 & 8690

Medical and diagnostic laboratories

8519 & 8690

Home health care services 8519/8531 & 8690

All other ambulatory health care services

8519 & 8690

Health – comparisons in time (3)

• Overview table of country practices•Based on country responses to Eurostat/OECD questionnaire in 2006•Attempt to describe practices in a common terminology difficult but potentially useful!•Countries’s help needed to complete

Health – comparisons in space

• Presentation by Luca Lorenzoni (OECD Health Division)

Way forward

•Health PPPs further developed in 2009•Completion of the chapter on health PPPs•Presentation of draft to health and education experts•Revision and final draft in 2009

•Delegates are asked to:•Comment on substance•Complete information on country practice

•Foreseen: written procedure

Thank you!