National Accounts Working Party 14 16 October 2008

National Accounts Working Party 14 -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, outcomes • Best explained by way of a graph

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: general Primary education: special education, e. g. , for disabled pupils Note: The sub-stratification normal / special could be replaced by coefficients reflecting the extra costs for social services provided to disabled pupils Number of pupils, adjusted for change in pupil attainment Number of pupil hours* Secondary education Number of pupils* Lower secondary: general Lower secondary: special classes, e. g. for disabled pupils Upper secondary education: general + pretechnical or pre-vocational Upper secondary education: vocational Post-secondary non-tertiary education

Education – comparisons in time (3) Tertiary education with practical and occupation-specific programmes Tertiary education with more theoreticallybased programmes Note: differentiation by field of education useful Credits (ECTS) Full-time equivalent students* Enrolled students* • 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 diseasebased 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 Hospital activities Acute Hospitals 8511 & 8610 Mental health and substance 8511 & 810 abuse hospitals Speciality (other than HP. 1. 2) 8511 & 8610 hospital Output-based methods (Quasi) Price 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) (Quasi) Price index based on DRG-like categories (cost or revenue-weighted) Direct volume index based on ICD categories (e. g. , discharge numbers with quantityweights such as shares in day care days) Number of discharges* Number of days of care*

Health – comparisons in time (3) Residential care activities Nursing care facilities 8519/8531 Note: RUGS are only used for 8710 nursing care Residential mental retardation, 8519/8531 mental health and substance 8720 abuse facilities Community care facilities for the 8519/8531 elderly 8730 All other facilities residential care 8519/8531 8790 & (Quasi) Price or unit cost index based on Resource Utilisation Groups (RUGs) or equivalent (cost-weighted) Direct volume index based on RUGs or equivalents (cost-weighted) & Direct volume index based on number of days of care by level of care (cost weighted) Direct volume index based on number of cases by level of care (cost weighted) & Number of days of care* Number of cases/discharges* &

Health – comparisons in time (4) Medical and dental practice activities Doctor services 8512 & 8620 Note: services are defined as consultation/visit/treatment depending on the typology of the country Dental services 8512 &8620 Note: ‘number of services’ refers to units such as consultations, visits or treatments, depending on the typology of the country (Quasi) Price index based on number and type of service (cost or revenue-weighted) Direct volume index based on number and type of service (cost or revenue-weighted) Relevant component of Consumer Price Index if applicable** (Quasi) Price index based on average costs/revenues per service (cost or revenueweighted) Direct volume index based on number of services (cost or revenue-weighted) Number of services* Relevant component of Consumer Price Index if applicable** Direct volume index based on number of services (cost or revenue-weighted) Number of services*

Health – comparisons in time (5) ISIC rev 3. 1 & 4 Other human health activities Note: the list of services below heterogeneous activities Other health practitioner consultations Other outpatient visits Family Planning centres Outpatient mental health and substance abuse centres Free-standing ambulatory surgery centres Dialysis care centres Other outpatient multispecialty and cooperative service centres All other outpatient care centres Output-based methods is not exhaustive as other human health activities covers very 8519 & 8690 Direct volume index based on number of consultation by type of consultation (cost or revenue-weighted) 8519 & 8690 (Quasi) Price index based on average cost or revenue per consultation (cost or revenueweighted) 8519 & 8690 8519/8531 & 8690 Relevant component of Consumer Price 8519/8531 & Index if applicable** 8690 diagnostic 8519 & 8690 Number of consultations* Medical and laboratories Home health care services 8519/8531 & Number of tests performed* 8690 All other ambulatory health care 8519 & 8690 Number of cases treated* services

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!