Download Measurement of non-market output in education and

”Measurement of non-market output in education and health”
The Portuguese experience: estimation of the
output of hospitals according to different
methodologies
HEALTH ACCOUNTS
Health Accounts Working Group
Portugal
London, October 3-5, 2006
Introduction - Present situation:
- The Health Accounts are compiled according to
the same rules and methodology of the National
Accounts.
- This means that when a unit is market the output
is measured through its health sales and when the
unit is non-market is measured by its sum of costs
of production.
- This study covers only the Hospitals that are part
of the National Health Service.
Introduction - Present situation:
-In the end of 2002 the Government restructured the NHS: as a
starting point 31 hospitals changed its legal status to corporations
with limited liabilities. In 2005 the legal status was changed again
to a new legal figure (EPE) and 5 new units joined this group.
Nonetheless both hospitals EPE and the remaning public ones are
part of the NHS.
-In 2003 onwards the recording of the output is a mixed one: the
output of public ones, still non-market, is valued as the sum of
costs and the ouptu of the hospitals EPE, nowm market, is
measured as the sum of health sales.
- In 2003 the new Public Accounting Plan for Health comes into
force. This means that until 2002 data for all hospitals are on a
cash basis and in 2003 onwards data are on accrual basis.
Introduction - Present situation:
- Until 2002, the payments by IGIF (unit responsible
for the financial mangement of the financing of the
NHS) were made to finance the cost and therefore
recorded as transfers. Therefore the amount recorded
as payment for health services correspond to payments
made by other health schemes and private insurance
for services rendered to their beneficairies.
- In 2003 onwards IGIF has contracts with the
hospitals. IGIF buys a certain amount of health
services and this amount is recorded under sales of
these hospitals.
Purpose of the work:
- To apply different methodologies for measuring
output in order to understand how changes can not be
directly related with political restructuring that do not
affect the activity, except those resulting from merging,
splitting, creation or disappearance of units. The
sustainability of public expenditure in health is under
evaluation for the recent years and therefore the output
of the hospitals should be measured in a correct way.
Description of the work:
* The volume indicators used are not qualityadjusted. There is the consensus on what quality
is and which should be used.
* The output of the hospitals was broken-down
by the main functions of the services provided by
the hospitals in Portugal:
- In-patient;
- Day hospital;
- Out-patient;
- Home care.
Description of the work:
* The methods for measure the output that were used are 4:
- Method A: it measures the units as non-market. The health
output is measured as the sum of costs of production less nonhealth sales.
Health output
(=)
Compensations of employees (D1)
(+)
Intermediate Consumption (P2)
(+)
Consumption of Fixed Capital (k1)
(+)
Other taxes on production (D29)
(-)
Other subsidies on production (D39)
(-)
Non-health sales
Description of the work:
- Method B: it corresponds to the sales of health care
services of the hospitals.
- Method C: Corresponds to the present situation, that is,
how output is recorded in the Health Accounts for the
period 2000-2004. It can be considered as a mixed
recording at least for 2003 and 2004. For the period 20002002, all units are recorded as being non-market and
therefore its output is measured by the sum of costs of
production. In 2003 and 2004, as previously mentioned,
the hospitals EPE became market and their output was
measured by the sales of health services whereas the
hospitals SPA (public institutions) remained non-market
with its output measured by the sum of costs of
production.
Description of the work:
- Method D: Output is equal to the quantities multiplied by its price or
average cost. The quantities can be Diagnosis Related Groups (DRG’s)
and the respective price or average cost. It can also be number of
treatments or appointments multiplied by its price or average cost.
In-patient: Prices fixed legally by type X DRG (Diagnosis Related
Groups) by type;
Hospital Day Cases: Total average cost by type X Patients treated by
type of treatment;
Out-patient:
Specialised Medicine appointments: total average cost by specialised
medicine X nº appointments by specialised medicine;
Emergency: Total average cost by type X Patients treated by type of
treatment;
Ambulatory surgery: Prices fixed legally by type X DRG (Diagnosis
Related Groups) by type.
Home care: Total average cost by type X nº of visits by type
Description of the work:
* Price and volume Indices were calculated to measure real
growth also by using detailed data on quantities and prices/costs.
To calculate output figures valued at prices of previous year,
Paasche Price Indices were calculated in order to consider
weighters of the current year and to measure volume Laspeyeres
Quantity Indices were calculated.
* The health output was deflated for all Methods according to
the output deflator used in method D. The volume indices
obtained from the data in Methods A, B and C were implicitly
derived.
* For the period 2000-2002 detailed financial statements for the
hospitals in the NHS were used to estimate output according to
Methods A, B and C, both for production costs and health and
non-health sales. Data for these years are on a cash basis. In
2003 the new Public Accounting Plan came into force including
the availability of cost accounting. Therefore the calculation of
output according to Methods A, B and C for 2003 and 2004
considered the detailed cost accounting for the hospitals on an
accrual basis.
Results
Health Output
Health Output (2000-2004)
Health Output (2000-2004)
5000
4000
4000
10
10
6
6
€
€
5000
3000
3000
2000
2000
1000
1000
0
0
2000
2001
2002
2003
2004
Method A - Cost of Production
Method B- Sales of Health Services
Method C- Present situation
Method D- Output (PXQ)
Method A - Cost Method B- Sales
of Health
of Production
Services
2000
2001
2002
Method CPresent
situation
2003
Method DOutput (PXQ)
2004
Health Output
Nominal Growth of Health Output (2000-2004)
20%
395%
350,5%
345%
15%
295%
245%
10%
195%
5%
145%
95%
0%
-5%
2001/2000
3,7%
2002/2001
13,8%
2003/2002
Method A - Cost of Production
Method D- Output (PXQ)
Method A - Cost of Production
2004/2003
0,8%
45%
-5%
Method C- Present situation
M ethod B- Sales of Health Services
2001/2000 2002/2001 2003/2002 2004/2003
-0,35%
9,01%
7,37%
5,56%
Method B- Sales of Health Services
3,71%
13,82%
350,52%
0,78%
Method C- Present situation
-0,35%
9,01%
8,23%
2,92%
Method D- Output (PXQ)
10,15%
9,38%
11,63%
7,00%
Health Output
Real Growth of Health Output (2000-2004)
10%
8%
340%
321,9%
290%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
240%
190%
2001/2000
2002/2001
2003/2002
2004/2003
140%
90%
-1,7%
-3,4%
10,7%
40%
-10%
Method A - Cost of Production
Method C- Present situation
Method D- Output (PXQ)
Method B- Sales of Health Services
Method A - Cost of Production
2001/2000 2002/2001 2003/2002 2004/2003
-5,55%
6,04%
0,54%
1,14%
Method B- Sales of Health Services
-1,69%
10,72%
321,88%
-3,43%
Method C- Present situation
-5,55%
6,04%
1,35%
-1,39%
Method D- Output (PXQ)
4,41%
6,40%
4,53%
2,52%
Health Output-Breakdown by functions
Method A - Cost of Production (20002004)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Method B- Sales of Health Services
(2000-2004)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000
2001
In-patient
2002
Day hospital
2003
Out-patient
2004
2000
Home care
Method C- Present situation (2000-2004)
100%
2001
In-patient
2002
Day hospital
2003
Out-patient
2004
Home care
Method D- Output (PXQ) (2000-2004)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000
2000
In-patient
2001
2002
Day hospital
2003
Out-patient
2001
2002
2003
2004
2004
Home care
In-patient
Day hospital
Out-patient
Home care
Health Output-Breakdown by functions
Structure of functions for 2004 recorded in all methods
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2004
2004
2004
Method A - Cost Method B- Sales
Method Cof Production
of Health
Present situation
Services
In-patient
Day hospital
Out-patient
2004
Method DOutput (PXQ)
Home care
Health Output-Breakdown by functions
Real Growth of Health Output - In-Patient (2000-2004)
10%
8%
340%
304,6%
290%
6%
4%
2%
0%
-2%
240%
190%
2001/2000
2002/2001
2003/2002
2004/2003
-4%
-6%
-8%
-10%
140%
90%
4,1%
10,3%
-2,3%
40%
-10%
Method A - Cost of Production
Method D- Output (PXQ)
In-patient
Method A - Cost of Production
Method B- Sales of Health Services
Method C- Present situation
Method D- Output (PXQ)
Method C- Present situation
Method B- Sales of Health Services
2001/2000
-8.73%
4.13%
-8.68%
3.13%
2002/2001 2003/2002
6.20%
-5.42%
10.26%
304.64%
6.86%
-6.68%
8.91%
4.14%
2004/2003
6.99%
-2.27%
2.25%
2.14%
Health Output-Breakdown by functions
Real Growth of Health Output - Out-Patient (2000-2004)
30%
385%
25%
335%
323,5%
20%
285%
15%
235%
10%
185%
5%
135%
0%
-5%
2001/2000
-10%
-9,0%
2002/2001
2003/2002
14,2%
2004/2003
-10,8%
-15%
85%
35%
-15%
Method A - Cost of Production
Method C- Present situation
Method D- Output (PXQ)
Method B- Sales of Health Services
Out-patient
Method A - Cost of Production
Method B- Sales of Health Services
Method C- Present situation
Method D- Output (PXQ)
2001/2000
8.95%
-8.96%
9.06%
6.32%
2002/2001 2003/2002
3.04%
10.64%
14.21%
323.46%
3.68%
21.35%
4.08%
5.22%
2004/2003
-13.96%
-10.85%
-12.69%
1.98%
Conclusions:
The volume indicators that were used are not quality adjusted
due to its complexity. We think that presently no consolidated
methodology is established to allow the calculation of quality
indicators.
• As a conclusion from the available data we think that Method
D seems to be the best measurement of health output because
it is more stable and it is not influenced by externalities such
as those mentioned in the first paragraph of this section. This
Method describes in a better way the volume growth of the
health output making it easier to study the factors that are
responsible for changes in productivity.
•Should Method D be applied the only limitation rely on the
estimation of the non-health output which is part of both
questionnaire on Health Accounts and National Accounts.
There is a need to consistent with the National Accounts.