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Benchmarking of productivity in the Nordic countries. Jon Magnussen Nordic Case Mix Conference Helsinki 2010. Denmark Kim Rose Olsen Anette Søberg Rød Jes Søgaard Anni Ankjær-Jensen Janni Kilsmark Finland ) Unto Häkkinen Miika Linna Mikko Peltola Timo Seppälä Kirsi Vitikainen.

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benchmarking of productivity in the nordic countries

Benchmarking of productivity in the Nordic countries

Jon Magnussen

Nordic Case Mix Conference

Helsinki 2010

contributors
Denmark

Kim Rose Olsen

Anette Søberg Rød

Jes Søgaard

Anni Ankjær-Jensen

Janni Kilsmark

Finland)

Unto Häkkinen

Miika Linna

Mikko Peltola

Timo Seppälä

Kirsi Vitikainen

Norway

Jon Magnussen

Sverre Kittelsen

Kjersti Hernæs

Kjartan S Anthun

Sweden

Clas Rehnberg

Emma Medin

Contributors
nordic model similarities
Nordic model - similarities
  • Common goals and aspirations
    • Equity
    • Public participation
  • Common structural features
    • Tax based funding
    • Decentralization – the role of regions, counties and municipalities
    • (Local) Political governance
but differences in health policy
But: Differences in health policy
  • Governance
  • Financing and contracting
  • Choice and rights
  • There is a common model but we differ in how we approach important issues
financing
Financing
  • Sweden and Finland both use DRGs but have local variations
    • Finland mostly (?) for budgetary purposes
    • Sweden partly for budgetary purpose, partly for activity based financing
  • Geographical resource allocation less of an issue
financing1
Financing
  • Norway have used DRGs in activity based financing since 1997
  • Denmark introduced DRGs as a marginal payment in 1999, but have increased the use to cover 50 % of income in 2007
  • Centrally initiated uniform models for the whole country
our approach
Our approach
  • Productivity analysis on hospital level data
  • Two separate analysis
    • 1999-2004; Norwegian hospital reform
    • 2005-2007; Specialised health care in Norway
  • Data Envelopment Analysis (DEA) with Farrell technical productivity
  • Bootstrapping to test differences and estimate confidence intervals
  • Second stage analysis:
    • Reform effects
    • Financing models
    • Structural factors
data envelopment analysis dea method
Data envelopment analysis (DEA) method

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b) Free Disposal

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c) Convexity

d) Minimum extrapolation

production model
Production model
  • Outputs 1999-2004:
    • DRG-weighted Inpatients in 3 groups
      • Medical, Surgical, Others
    • DRG-weighted Day care patients in 2 groups
      • Medical, Surgical
    • Number of Outpatients
  • Outputs 2005-2007:
    • DRG-weighted inpatients
    • DRG-weighted day care
    • Number of outpatients
challenges
Challenges
  • Finland/Sweden – specialty discharge rather than hospital discharge
  • Denmark – DK-DRG
  • Day care – and outpatient visits
production model1
Production model
  • Inputs:
    • Operating costs in real value
    • Problems:
      • Comparability of price level for hospital inputs, variation across hospitals and remaining variation across countries
      • Consistent removal of capital costs?
      • Consistent removal of costs associated with research, teaching, psychiatric care etc etc
  • Aggregation problem
    • Sweden and Norway cannot always use hospital level data
    • Scale interpretations are problematic, Productivity/CRS model used
drg weights
DRG-weights
  • 1999-2004:
    • Common Nordic weights as (weighted) average of NO/Fin/Swe cost weights
  • 2005-2007:
    • Norwegian weights
    • Aggregate weights for complicated/uncomplicated
    • Separate (calibrated) Danish weights
  • Ideally: Patient level data grouped – so far not possible
2nd stage
2nd stage
  • Reform has increased productivity level by approx 4 %
  • Robust to different specifications
  • And:
    • Changes in Activity based financing (ABF) has no effect (?)
    • Changes in case-mix has no effect
    • Length of stay (LOS) longer than expected (within each DRG) is associated with lower productivity (severity or inefficiency)
second stage analysis
Second stage analysis
  • Country
  • Year
  • Region
  • Teaching hospital
  • Case-mix index
  • Length of stay deviation
  • Share of outpatient activity
  • Size
summary of results
Summary of results
  • Significant higher levels of productivity in Finland
    • Small differences between Norge, Sverige og Danmark
    • Large intra country variations
  • Diseconomies of scale?
    • Could be case-mix
    • Careful interpretation because different definitions of units
  • Other explanatory variables – not significant
    • Thus LOS deviation, no longer different
speculation
Speculation
  • Same result in three different analyes of Norway and Finland (1999, 1999-2004, 2005-2007)
  • Same result in two analyses of Norway/Sweden (1999-2004, 2005-2007)
  • Why?
    • Personnell mix?
    • Level of personnell
    • Capitalization?
    • Case-mix
    • Different institutional setting?
the way forward
The way forward
  • Using patient level data to provide a common grouping of patients
  • Harmonizing measurement of day care and outpatient activity
  • Cost weights – or possibly more disaggregated analysis
  • Micro level analysis to understand differences
  • A larger dataset to be able to test second stage variables