OECD/NBS Workshop on national accounts

27-31 October 2008Paris

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

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

Education – comparisons in time (3)

Volume output measures of non-market education services, France

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

2000 2001 2002 2003 2004 2005 2006

Output method Number of pupils / students Input method

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 (6)Input price index and output-based price index

for acute hospital services in Denmark

90.0

95.0

100.0

105.0

110.0

115.0

120.0

2000 2001 2002 2003 2004 2005

Input based

Output based

Overall effects - FranceImpact of output and input-based methods on total value-added, France

-1,0%

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

200

0

200

1

200

2

200

3

200

4

200

5

200

6

Impact of the output method for NM education and health on the evolution of value-added for all industriesin volume

Output method for NM education and health

Input method for NM education and health

-0.3 % -0.2 % -0.3 % -0.2 %+0.1 %-0.1 % -0.0 %

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

Thank you!