Cross-country comparison of health care system efficiency · Cross-country comparison of health care system efficiency Isabelle Joumard, OECD, Economics Department IMF conference,

Cross-country comparison of health care system

efficiency

Isabelle Joumard, OECD, Economics Department IMF conference, June 21, 2011 “Public Health Care Reforms: Challenges and Lessons for Advanced and Emerging Europe”

Weak link between health care spending and outcomes

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72

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82

84

0 1000 2000 3000 4000 5000 6000 7000 8000

Total expenditure on health per capita, US $ PPP

Life expectancy at birth, years

Source: OECD Health Data 2010.

Presentation outline

1. Measuring health care spending efficiency

2. Reaping efficiency gains: why (effect on public spending) and how

1. Measuring health care efficiency: difficulties

No obvious definition of health care outcomes and inputs; cross-country data on outcomes are imperfect

A large variety of actors (hospitals, outpatient physicians, drug companies, etc.) and co-ordination matters a great deal

Mix of public and private spending

1. Measuring health care efficiency: OECD approach

Choose an outcome indicator

… and an input indicator

Identify the other determinants

Implement various approaches (panel regressions and DEA) and robustness checks

Complement/compare the overall efficiency index with other performance indicators

Life expectancy at birth Total population, 1960 and 2007

JapanSwitzerlandAustraliaItalyIcelandSpainFranceSwedenCanadaNorwayNew ZealandNetherlandsAustriaGermanyBelgiumIrelandFinlandUnited KingdomGreeceLuxembourgKoreaPortugalOECDDenmarkUnited StatesCzech RepublicPolandMexicoSlovak RepublicHungaryTurkey

82.681.981.481.481.281.081.081.080.780.680.280.280.180.079.879.779.579.579.579.479.479.179.178.478.177.0

75.475.074.373.373.2

405060708090

2007 1960

Years

Source: Health at a Glance 2009, OECD Indicators.

Life expectancy at 65, women Women, 1970 and 2007

JapanFrance

SwitzerlandSpainItaly

AustraliaCanadaFinlandBelgiumNorwayAustria

GermanyNew Zealand

SwedenIcelandKorea

NetherlandsUnited StatesLuxembourg

OECDPortugal

United KingdomIrelandGreece

DenmarkPoland

Czech RepublicMexico

HungarySlovak Republic

Turkey

23.622.322.222.021.821.621.421.321.020.820.820.720.720.720.620.520.520.320.320.220.220.120.1

19.619.218.918.518.2

17.317.1

15.8

510152025

2007 1970

Years


Amenable mortality All causes, 2007 or latest year available

0 50 100 150 200 250

EstoniaHungary

Slovak RepublicPolandMexico

Czech RepublicPortugal

United StatesChile

OECDSloveniaDenmark

KoreaUnited Kingdom

New ZealandIreland

GermanyIsrael*

GreeceFinland

LuxembourgCanada

SpainNorwayAustria

AustraliaNetherlands

SwedenJapan

ItalyIcelandFrance

Age-standardised rates per 100 000 population

Source : Gay et al. (2011), "Mortality Amenable to Health Care in 31 OECD Countries: Estimates and Methodological Issues", OECD Health Working Paper, No. 55.

Correlations between outcome measures (level and rank)

LE at birth LE at 65Total Female

Life expectancy at birth, total 1.00 0.94 ** -0.93 ** 0.96 ** -0.96 **Life expectancy at 65, female 0.89 ** 1.00 -0.77 ** 0.91 ** -0.86 **Adjusted PYLL, total -0.82 ** -0.64 ** 1.00 -0.90 ** 0.91 **Health-adjusted life expectancy at birth 0.95 ** 0.85 ** -0.84 ** 1.00 -0.89 **Amenable mortality -0.92 ** -0.82 ** 0.85 ** -0.93 ** 1.00

Amenable mortality

Health-adjusted LE

Adjusted PYLL

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

Health care spending 2008

0

1000

2000

3000

4000

5000

6000

7000

8000

Public expenditure Private expenditureSpending per capita, US $


Practising physicians per 1000 population, 2007

GreeceBelgiumNetherlandsNorwaySwitzerlandAustriaIcelandItalySpain2SwedenCzech RepublicPortugalGermanyFranceDenmarkOECDSlovak RepublicIrelandFinlandLuxembourgAustraliaHungaryUnited KingdomUnited StatesNew ZealandPolandCanadaJapanMexicoKoreaTurkey

5.44.03.93.93.93.83.73.73.73.63.63.53.53.4

3.23.13.13.03.02.92.82.8

2.52.42.32.22.22.12.0

1.71.5

0246


Remuneration of specialists

Self-employed Salaried

0

50

100

150

200

250

300

350US $ PPP, thousands


Remuneration of general practitioners (GPs)

Self-employed Salaried

0

20

40

60

80

100

120

140

160

180US $ PPP, thousands


Health care resources

Lifestyle factors: diet, alcohol & tobbaco consumption

Socioeconomic environment: income and education

Pollution

Health care status determinants

DEA – defining the efficiency frontier and potential efficiency gains

0

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30

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60

0

1

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6 Life expectancy at birth Life expectancy at 65 Amenable mortality (right scale)

DEA – results and sensitivity analysis (for different outcome indicators)


Potential gains in life expectancy, years Potential gains in amenable mortality, %

DEA – results and sensitivity analysis (for different input indicators)

0

1

2

3

4

5

6

7 Expenditure, ENV Health professionals, ENV Expenditure, ESCS, Nox

Expenditure, ESCS, Smoking Expenditure, ESCS, Alcohol

Potential gains in life expectancy, years


Panel regressions – model specification (log form)

itHCRiit ⋅+=Υ βα

itDIETitDRINKitSMOK ⋅+⋅+⋅+ θφγ

ititGDPitEDUitAIRPOL ελσδ +⋅+⋅+⋅+

Panel regressions: contribution of main explanatory variables

to cross-country differences in life expectancy

Determinants

Spending Education Tobacco Alcohol Diet Pollution GDPCountry-specific effect

United States -0.5 2.9 0.5 0.0 0.0 0.0 -0.6 0.6 -4.0 Germany 0.6 0.8 0.4 -0.1 -0.1 0.0 0.5 0.1 -1.0 France 1.3 0.9 -0.2 0.0 -0.3 0.0 0.4 0.2 0.4 United Kingdom 0.5 -0.1 0.4 0.1 -0.2 0.0 0.1 0.2 0.0 Canada 1.8 0.9 0.4 0.1 0.1 0.0 -0.8 0.3 0.9 Czech Republic -2.7 -1.8 0.5 -0.1 -0.3 -0.1 0.0 -0.6 -0.3 Korea -0.6 -2.4 0.1 0.0 0.0 0.1 0.3 -0.4 1.7

Life expectancy

at birth

Source: Joumard , André, Nicq & Chatal (2008), "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency ", OECD Economics Department Working Paper, No. 627.

Panel regressions: years of life not explained by the model

With health care resources measured in monetary terms

-5

-4

-3

-2

-1

0

1

2

3

Source: Joumard , André, Nicq & Chatal (2008), "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency ", OECD Economics Department Working Paper, No. 627.

Comparing efficiency indicators derived from panel regressions and DEA

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0 1 2 3 4 5 6 7DEA (years)

Panel regression (years)

Complementing overall efficiency score by other performance measures -- France

France OECD average

-2

-1

0

1

2Overall efficiency

EquityALL, in-patient care

Colorectal cancer

Lung cancer

Breast cancer

AMI

Fracture of femur

OccupancyTurnover

CataractConsultations/doctor

Adm. costs

DTP

Measles

Influenza

Asthma

Bronchitis

Heart failureAmenable mortality

Vac

cina

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s

Average length of stay

Avo

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2. Reaping efficiency gains -- Impact on public spending

Main assumptions:

• Health outcomes improve as they did in the past

• Two scenarios on the spending side are compared:

1. No reform scenario – spending increases as it did in the past

2. Reform scenario – efficiency gains are realised to finance all or part of health status improvements

Potential savings in public spending are large

Exploiting efficiency gains would allow to improve health outcomes further

0

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increase over 1997-2007 Potential gains in 2007 through greater efficiency

Gains in life expectancy, years

Source: OECD Health Data 2009; OECD calculations.

Exploiting efficiency gains would help to contain future spending

0

20

40

60

80

100

120

140

1997-2007 2007-2017, if exploiting efficiency gains % increase in per capita spending, in real terms


Potential savings in public spending are large


% 2017 GDP

-2

-1

0

1

2

3

4

5 Population covered

Scope of basic coverage

Depth of coverage

Choice of insurer, basic coverage

Insurer levers, basic coverage

Over-the-basic coverage

Patient choice among providers

Gate-keeping

Price signals on users

Degree of decentralisation Delegation to insurers

Consistency

Priority setting

Stringency of the budget constraint

Degree of private provision

Volume incentives embedded in provider payment schemes

Regulation of prices paid by third-party payers

Regulation of prices billed by providers

Regulation of workforce & equipement

User information on quality and prices

France OECD average Group 2

How to reap efficiency gains? A new set of policy indicators provides guidance

Indicators of health care spending efficiency at the system level can be built and are relatively robust

They can be complemented by indicators of the quality of care and other performance indicators

Exploiting potential efficiency gains would help contain public spending and result in large savings for some countries (on average 2% of GDP by 2017)

To conclude

OECD (2010), Health Care Systems: Efficiency and Policy Settings.

Joumard, André, Nicq & Chatal (2008), "Health Status Determinants: Lifestyle, Environment, Health Care Resources and Efficiency", OECD Economics Department Working Paper, No. 627.

OECD, Health at a Glance (bi-annual publication).

For more information

Characterising health care systems:

country groups

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

No health care system clearly outperforms the others

No big-bang reform is warranted

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

Documents

Cross-country comparison of health care system efficiency · Cross-country comparison of health care system efficiency Isabelle Joumard, OECD, Economics Department IMF conference,