1

A framework for international comparisons of volume and prices in health care

Interim Report

Manfred Huber

7th Meeting of HA Experts and Correspondents for Health

Expenditure Data

2

Overview of presentation

Objectives of the project of health specific PPPs (H-PPPs)

Expenditure classifications for price comparisons

Potential data sources: Where are we? What’s missing?

Aggregation strategies for multilateral comparisons

Which role for quality adjustment?

Conclusions & Next steps

3

The project of price and volume comparisons: objectives

Set of comparative indicators at different levels of aggregation (ICHA-HC [three]/two/one digit level)

Indicators for bilateral comparisons Simple comparisons of volume measures with

unweighted OECD averages But also aggregation to Indicators for multilateral

comparisons.. ..for Improved purchasing power parities for health

(H-PPPs) (“health-specific” PPPs)

4

Basic definitions (SNA terminology)

Expenditure = price x volume Value: synonym to “expenditure” Quantity: units for homogenous, individual goods or

services Volume: weighted average of quantities of individual

products or groups of products Output: volume of well-defined bundle of goods

5

Expenditure classifications for price comparisons: ICHA

ICHA-HC Expenditure category for H-PPP ICHA-HF source of funding

function of health care

HF.1 HF.2HF.2.1 + HF.2.2

HF.2.3 HF.2.4

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HC.1.1; 1.2; 2.1; 2.2;

10.00 In-patient curative and rehabilitative care including day cases

HC.1.3;1.4; 2.3 ; 3.4

20.00 Curative and rehabilitative care: ambulatory, outpatient & home care

HC.1.3.1 20.01 Basid medical and diagnostic servicesHC.1.3.2 20.02 Dental careHC.1.3.3 20.03 All other specialised health careHC.1.3.9 20.04 All other ambulatory and outpatient care

HC.3.1; 3.2; 3.3 30.00 Long-term care services

HC.3.1 30.01 Long-term care in institutionsHC.3.2; HC.3.3 30.02 Long-term care: home care

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Expenditure classifications for price comparisons: ICHA (cont)

HC.4 40.00 Ancillary services to health care (1)

HC.5 50.00 Medical goods in ambulatory care (2)

HC.5.1.1/2 50.01 PhamaceuticalsHC.5.1.1 50.01.1 Prescribed medicinesHC.5.1.2 50.01.2 Over-the-counter medicinesHC.5.1.3 50.02 Other medical non-durables

HC.5.2 50.03 Therapeutical appl.; other medical durablesHC.5.2.1 50.03.1 Glasses and other vision productsHC.5.2.2 50.03.2 Orthopaedic appliances; other prostheticsHC.5.2.3-5.2.9 50.03.3 All other misc. durable medical goods

HC.6; HC.7 60.00 Public health and health administrationHC.6 60.01 Prevention and public health servicesHC.7 60.02 Health administration and health insurance

HC.1-HC.7 Total current expenditure on health care

(1) This item includes freestanding clinical laboratory; diagnostic imaging; and patient transport.(2) Included are fitting of prosthesis; eye tests and other services of providers of these goods.

Note: HF.2.5 (enterprises) and HF.3 (rest of the world) have been excluded from the picture

HF.1 HF.2HF.2.1 + HF.2.2

HF.2.3 HF.2.4

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Four estimation methods and their data requirements

Price Quantity

Input Detailed expenditures on inputs (labour and intermediate inputs); average salary data of selected occupations (1)

Detailed expenditures on inputs (labour and intermediate inputs); numbers of workers in selected occupations

Output Detailed set of unit prices for market prices; alternatively imputed prices of selcted services (cost estimates) for non-market services

Detailed list of selected services; representative mapping to expenditure categories

Source: adapted from Tandon et al. (2002, Table 4)

(1) The Eurostat-OECD comparisons collect for this purpose data on 17 input items, among which are 3 salary items.

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Method of choice ?

Unit prices for market services (in particular for medical goods)

Indirect comparison for non-market services via output measures from (secondary) administrative data sources suggested for the H-PPP project

Input price method for non-market services (Eurostat-OECD, 2002 PPPs)

But: non-market/market distinction in SHA-based health accounts not available..

..and what about expenditure corresponding to transaction prices for mixed public-private payment (cost-sharing)?

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Expenditure classification: ICHA modified

ICHA-HC Expenditure category for H-PPP Source of funding adapted for price comparisons

function of health care

HF.1 HF.2.3 HF.1 HF.2.3HF.2.1 + HF.2.2

HF.2.3 HF.2.4

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HC.1.1; 1.2; 2.1; 2.2;

10.00 In-patient curative and rehabilitative care including day cases

HC.1.3;1.4; 2.3 ; 3.4

20.00 Curative and rehabilitative care: ambulatory, outpatient & home care

HC.1.3.1 20.01 Basid medical and diagnostic servicesHC.1.3.2 20.02 Dental careHC.1.3.3 20.03 All other specialised health careHC.1.3.9 20.04 All other ambulatory and outpatient care

HC.3.1; 3.2; 3.3 30.00 Long-term care services

HC.3.1 30.01 Long-term care in institutionsHC.3.2; HC.3.3 30.02 Long-term care: home care

HC.4 40.00 Ancillary services to health care (1)

HC.5 50.00 Medical goods in ambulatory care (2)

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Which are the “shortcuts” used for health in current PPPs?

ICHA-HC Expenditure category for H-PPP Source of funding adapted for price comparisons

function of health care

HF.1 HF.2.3 HF.1 HF.2.3HF.2.1 + HF.2.2

HF.2.3 HF.2.4

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HC.1.1; 1.2; 2.1; 2.2;

10.00 In-patient curative and rehabilitative care including day cases

HC.1.3;1.4; 2.3 ; 3.4

20.00 Curative and rehabilitative care: ambulatory, outpatient & home care

HC.1.3.1 20.01 Basid medical and diagnostic servicesHC.1.3.2 20.02 Dental careHC.1.3.3 20.03 All other specialised health careHC.1.3.9 20.04 All other ambulatory and outpatient care

HC.3.1; 3.2; 3.3 30.00 Long-term care services

HC.3.1 30.01 Long-term care in institutionsHC.3.2; HC.3.3 30.02 Long-term care: home care

HC.4 40.00 Ancillary services to health care (1)

HC.5 50.00 Medical goods in ambulatory care (2)

HC.5.1.1/2 50.01 PhamaceuticalsHC.5.1.1 50.01.1 Prescribed medicinesHC.5.1.2 50.01.2 Over-the-counter medicinesHC.5.1.3 50.02 Other medical non-durables

HC.5.2 50.03 Therapeutical appl.; other medical durablesHC.5.2.1 50.03.1 Glasses and other vision productsHC.5.2.2 50.03.2 Orthopaedic appliances; other prostheticsHC.5.2.3-5.2.9 50.03.3 All other misc. durable medical goods

HC.6; HC.7 60.00 Public health and health administrationHC.6 60.01 Prevention and public health servicesHC.7 60.02 Health administration and health insurance

13.02.11.3

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11.06.23.113.02.12.3

13.02.12.2

13.02.11.0

11.06.31.0

13.02.12.1

11.06.11.0

11.06.22.0

(13.02.12.3) (11.06.23.1)

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1.0

11.06.21.0

13.02.11.1 11.06.11.1

11.06.13.1

13.02.12.4

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Current specification of health in PPPs

Detailed list of market prices for medical goods and selected ambulatory/outpatient services (~540 of which 85% are pharmaceuticals

Advantages: questionnaire with very detailed specifications, tested in the field

Potential to complement list of ambulatory services (e.g. put in more services which correspond to current/latest technology; more expensive treatment)

E.g. complement unit-prices for long-term care

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Example of detailed specification: pharmaceutical

77 06.1.1.0b07 Aspirin ATC Code: B01AC06, N02BA01Active principle: Acetylsalicylic acidStrength: 100 mgDosage form: Tablet(s)Quantity: 20 tab

78 06.1.1.0b08 Nu-seals (Aspirin anti-inflammatory), Hjertemagnyl

ATC Code: B01AC06, N02BA01

Active principle: Acetylsalicylic acidStrength: 300 mgDosage form: Tablet(s)Quantity: 100 tab

79 06.1.1.0b09 Nu-seals (Aspirin), Hjertemagnyl ATC Code: B01AC06, N02BA01Active priciple: Acetylsalicylic acidStrenght: 75 mgDosage form: Tablet(s)Quantity: 56 - 100 tab

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Example of detailed specification: home care

Assistant nurse: home visit Patient type: Elderly, handicappedDuration: ± 60 minTiming: Normal working hoursService: Qualified nurse supervision. Help with personal hygiene, administering light treatment, cleaning and tidying of home, giving of instructionsService distance: 5 kmLocation: At home of patient

Nurse: home visit Patient type: Elderly, handicappedDuration: ± 15 minTiming: Normal working hoursService: Routine health check, dispensing of medicines, giving of instructionsService distance: ± 5 kmLocation: At home of patient

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Example of detailed specification: dental care

Dentist: Routine check-up Duration: ± 15 minTiming: Normal working hoursService: Routine check-up, normal scaling and polishing, no other treatmentService excluded: X-rayAvailability: By appointmentLocation: At surgery

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How to improve PPPs and move to H-PPPs?

Focus on “comparative resistant” item of hospital care Big spending item, not covered well in current PPPs Select inpatient care items: high spending items;

dynamic spending development (ageing/chronic conditions); e.g. surgery like: hip/knee replacement

Complement ambulatory care list with high volume surgical procedures (cataract etc.)

Further develop indicators for long-term care

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Potential data sources

Use of secondary data sources: survey too costly? Design hospital data set with a view to provide relevant

data for H-PPP purposes Same for long-term care Health care quality indicators project: many indicators

refer to volumes (often measuring times, “right thing is done”)

Co-operate with main PPPs project to improve available items in questionnaire and for quality checking?

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Calculation and aggregation: standard methods of linking countries

Comparison of four countries with a multilateral average

Complete system of bilateral comparisons

Source: Hill (2002) Linking Countries and Regions using Chaining Methods and Spanning Trees

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Linking countries with (minimum) spanning trees

Examples of spanning trees

Source: Hill (2002) Linking Countries and Regions using Chaining Methods and Spanning Trees

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Example of spanning tree

Source: Hill (2002) Linking Countries and Regions using Chaining Methods and Spanning Trees

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Which role for quality adjustment?

Quality differences important issue that needs to be addressed

Direct adjustment versus post-adjustment/analysis? Suggestion to keep volume/output/quality separate for

the first phases of the project Later on, test regression models before “adjustments”

can be justified Hedonic regression technique for PPPs available, but

seldom used so far; should be tested once more data available

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Conclusions and next steps

Project of H-PPPs major undertaking, potentially resource intensive

Better linking of SHA to SNA becomes a concern Synergy with overall PPP project? Break project down in manageable parts Get countries involved in bilateral comparisons to

improve quality, commitment and save cost? Need to write down the math on index formulas to be

tested and do first tests with hospital data

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Points for discussion

Comments on conceptual framework Data availability and feasiblity from national sources Interest to participate in further methodological work

and work with test data