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Health Care Sector Efficiency: Measuring and improving it

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  1. Health Care Sector Efficiency:Measuring and improving it Christophe André OECD, Economics Department Institute of Health Economics – Alberta, Canada Becoming the Best: Building Sustainable Health Systems High Performing Health Systems Edmonton, April 15th, 2011

  2. The OECD’swork on health Selected publications and weblinks • Healthat a Glanceand Health Data • Health Care Systems: Efficiency and Policy Settings • OECD Economicsurveys: Canada, 2010 • Improving Value in Health Care – Measuring quality • Value for Money in Health Spending • Obesity and the Economics of Prevention: Fit not Fat Websites: Health The Economics of Health

  3. Outline of the presentation • Measuringhealth care outcomes… • …and inputs • Derivingefficiencyindicators • Reapingefficiency gains: the impact on public spending • Performance and institutions

  4. A positive link between health care spendingand outcomes but with country differences Source: OECD Health Data 2010.

  5. 1. Measuring health care outcomes • Life expectancy (raw and adjusted for morbidity and disabilities), specificmortalityindicators (infant, premature and amenablemortality) • Volume of health care consumption • Quality of care (avoidablehospital admissions and in-hospitalfatality rates)

  6. Life expectancy at birth Source: Health at a Glance 2009, OECD Indicators.

  7. Life expectancy at 65, women Source: Health at a Glance 2009, OECD Indicators.

  8. Prematuremortality, adjusted for transport accidents, suicides and assaults Source: OECD Health Data.

  9. Amenable mortality Source : Gay et al. (2011), "MortalityAmenable to Health Care in 31 OECD Countries: Estimates and Methodlogical Issues", OECD Health WorkingPaper, No. 55.

  10. Correlationsbetweenoutcomemeasures(level and rank) Source: Joumard , André & Nicq (2010), "Health Care Systems: Efficiency  and Institutions", OECD Economics Department Working Paper, No. 769.

  11. Obesity rates Source: OECD Health Data.

  12. Volume of care Hospitaldischarges Source: OECD Health Data.

  13. Volume of care Physician consultations Source: OECD Health Data.

  14. Quality of careAsthmaavoidablehospital admissions Source: OECD Health Data.

  15. Quality of care - Congestive heartfailureavoidablehospital admission Source: OECD Health Data.

  16. Quality of care Ischemic stroke Source: OECD Health Data.

  17. 2. Measuring health care inputs • Spending on health care • Number of physicians • Remuneration and prices

  18. Health care spending2008 Source: OECD Health Data 2010.

  19. Health care spending (% of GDP)2008 Source: OECD Health Data 2010.

  20. Practising physiciansper 1000 population, 2007 Source: Health at a Glance 2009, OECD Indicators.

  21. Remuneration of general practitioners (GPs)2006 (2003 for the US) Source: OECD Health Data.

  22. Remuneration of specialists2006 (2003 for the US) Source: OECD Health Data.

  23. Comparative price levels for hospital servicesAverage of countries in the sample = 100 Source: F. Koechlin, L. Lorenzoni, P. Schreyer, Comparing Price Levels of Hospital Services Across Countries – Results of pilot study, OECD Health Working Paper No. 53 (2010).

  24. Health care prices and volumes Source: OECD Health Data.

  25. 3. Derivingefficiencyindicators • Identify health status determinants • Implement 2 methods (panel regressions and DEA) and various robustness checks • Complement the overall efficiency index with other performance indicators

  26. Health care status determinants • Health care resources • Lifestylefactors: diet, alcohol & tobaccoconsumption • Socio-economicenvironment: income and education • Pollution

  27. Panel regressions – Model specification (log form)

  28. Panel regressionsContribution of main explanatory variables to cross-country differences in life expectancy Source: Joumard , André, Nicq & Chatal (2008), "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency ", OECD Economics Department Working Paper, No. 627.

  29. Panel regressionsYears of life not explained by the model Source: Joumard , André, Nicq & Chatal (2008), "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency ", OECD Economics Department Working Paper, No. 627.

  30. DEA – Defining the efficiency frontier and potential efficiency gains

  31. DEA – Results and sensitivityanalysis(for differentoutcomes) Potential gains in life expectancy, years Potential gains in amenable mortality, % Source: Joumard , André & Nicq (2010), "Health Care Systems: Efficiency  and Institutions", OECD Economics Department Working Paper, No. 769.

  32. DEA – Results and sensitivityanalysis(for different inputs) Potential gains in life expectancy, years Source: Joumard , André & Nicq (2010), "Health Care Systems: Efficiency  and Institutions", OECD Economics Department Working Paper, No. 769.

  33. Comparingefficiencyindicatorsderivedfrom panel regressions and DEA

  34. Efficiency: DEA efficiency score and other performance measures Group 2: Australia, Belgium, Canada, France Source: OECD Health Data.

  35. Efficiency: a closer look at administrative costs Source: OECD Health Data.

  36. 4. Reapingefficiency gains: the impact on public spending Main assumptions: • Health outcomes improve as they did in the past • Two scenarios on the spending side are compared: • No reform scenario – spending increases as it did in the past • Reform scenario – efficiency gains are exploited and finance all or part of the improvement in health status  In most countries, potential savings in public spending are large

  37. Exploitingefficiency gains wouldallow to improvehealthoutcomesfurther

  38. Exploitingefficiency gains would help to contain future spending

  39. Potentialsavings in public spending Source: OECD Health Data 2009; OECD calculations.

  40. 5. Performance and institutionsIs there an ideal health system ? • A new set of OECD indicators on health care policies and institutions (seeHealth Care Systems: Efficiency and Policy Settings) • Cluster analysis to identifyhealth care models • The bad news is: thereis no ideal system… • The good news is… thereis no ideal system ! … • … No « big bang » reformisrequired to improve performance. Incrementalreformcanyield large benefits

  41. Characterisinghealth care systems:country groups Source: Joumard, André & Nicq (2010), "Health Care Systems: Efficiency  and Institutions " , OECD Economics Department Working Paper. No. 769.

  42. Linkingefficiencywithpolicy settingsNo health care system clearlyoutperforms the others Source: Joumard, André & Nicq (2010), "Health Care Systems: Efficiency  and Institutions", OECD Economics Department Working Paper, No. 769.

  43. Conclusions • Indicators of health care spendingefficiencycanbebuilt and are relativelyrobust • The efficiencyindicatorscanbecomplemented by indicators of the quality of care and other performance indicators • There is a large potential for efficiency gains in many OECD countries • No health care model clearly outperformsothersIncrementalreformis the wayforward

  44. Thankyou !