measuring health output and productivity in the uk: an essential element of public accountability uk...
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Measuring health output and productivity in the UK: an essential
element of public accountability
UK Centre for the Measurement of Government Activity
Phillip Lee, James Hemingway & Christopher Little
OECD/ONS/Govt of Norway Workshop,
London, 3 October 2006
Outline
• UK National Health Service
• Output – data & methodology
• Input – data & methodology
• Output & productivity estimates
• Current work
UK National Health Service
• Public services in UK account for ~20% total GDP
• NHS largest public service: 30% final govt consumption
• Health expenditure in UK (2005):
– £88 billion (public); £13 billion (private)
• England (82%), Scotland (10%), Wales (5%), Northern
Ireland (3%)
• Separate activity & financial data collection
Output, Input & Productivity
• Productivity = (Output volume)/(Input volume)
• Require output & input measures on same
basis
• Output – Cost-weighted activity index
(Laspeyres)
• Input – Expenditure deflated for price/salary
increases
Volume of Health Output – Methodology
• Data available from England & NI – proxy for UK
• England
– 1900 activity types
– 81% coverage by expenditure (2005)
• Northern Ireland
– 1500 activity types
– 79% coverage by expenditure (2005)
Volume of Health Output – Activity Data
• Secondary Care (Hospitals) – Episodes of treatment (FCEs),
classified by diagnosis/procedure (DRG-like scheme)
• Outpatients – number of appointments by specialty
• Community healthcare – number of appointments by specialty
• Primary Care (General Practice) – number of appointments
• Dentists, Optometrists – number of appointments
• Ambulance services – emergency journeys by specialty
• NHS Direct phone/internet services, walk-in centres – number of
activities
• Prescription drugs – number of prescriptions
80
90
100
110
120
130
140
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Volume of Health Output – National Accounts Index 1999 = 100
Average growth:+3.2 per cent a year
Volume of Health Input – Methodology
• Resources used in the production of NHS activities
• Labour (e.g. medical, administrative staff)
• Procurement (e.g. drugs, electricity)
• Capital (e.g. buildings, equipment)
• Convert to volume measures by removing changes
in pay & prices over time (deflators)
Volume of Health Input – Methodology 2
• Detailed expenditure & deflators for Labour &
Procurement are England only
• Calculate aggregate deflator for Labour & Procurement
for England as proxy for UK
• Apply to current price UK expenditure figures to get
volume Labour & Procurement input
• Add to UK volume of input measure for Capital
Volume of Health Input – Estimates
• Experimental options lead to a range of input estimates:
• Labour
– Counts of staff hours (direct)
– Deflated staff costs (indirect)
• Capital
– User costs (capital services)
– Depreciation (capital consumption)
• Procurement
– Alternative deflators for prescription drugs
80
90
100
110
120
130
140
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Volume of Health Input
Highest growth: +4.6 per cent a yearIndirect labour, Paasche drugs deflator, Capital services
Index 1999 = 100
Lowest growth: +3.9 per cent a yearDirect labour, NIC drugs deflator, Capital consumption
Health Productivity – Estimates
• Productivity = (Output volume)/(Input volume)
• National Accounts output volume series
• With/without experimental adjustments to output
volume for quality
• Range of experimental input volumes
80
90
100
110
120
130
140
1999 2000 2001 2002 2003 2004
Index 1999 = 100
Including quality adjustments: +5%
Without quality adjustments: +3.8%
Volume of Health Output – With & Without Quality Adjustments
90
95
100
105
110
1999 2000 2001 2002 2003 2004
Index 1999 = 100
Lowest inputs growth-0.9% pa
Highest inputs growth-1.5% pa
Productivity – Without Quality Adjustments
90
95
100
105
110
1999 2000 2001 2002 2003 2004
Index 1999 = 100
Lowest inputs growth+0.2% pa
Highest inputs growth-0.5% pa
Productivity – With Quality Adjustments
Current Work
• More accurate measures of primary care
• Improved data & methodology for hospital activity
• Better input volume measures
• Wider UK coverage
• Public consultation
– Quality adjustments
– Value of health adjustment
Summary
• UK health output series based on direct measurement
• Comprehensive, but improving with wider geographic &
activity coverage
• Experimental quality adjustments to output
• Advanced measure of productivity being developed
• Includes experimental ‘direct’ measures of labour and
capital
