Relating microeconomic efficiency with macro-level productivity of the health care sector in the EU...

Relating microeconomic efficiency with macro-level productivity of the health care sector in the EU Context

Akiko Maeda, Ph.D.Lead Health SpecialistThe World Bank Europe and Central Asia Region

Presentation Outline

Overview Defining “product” and “productivity” in health systemMeasurement tools and performance standards Critical role of health information systemsRelevance in the EU Context

Relating microeconomic efficiency with macroeconomic productivity in the health sector:

Health care is a significant and growing segment of the economy (7 to 14% of GDP in industrialized countries)Involves highly complex interactions among inputs, outputs and outcomes

Health, Health System and Growth

MacroeconomicGrowth

ImprovedHealth

Outcomes

Health System

Productivity

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

1970 1975 1980 1985 1990 1995

Year

Per

cent

of G

DP

Canada

FranceGermany

Japan

Sweden

U.K.USA

Percentage of GDP spent on Health, Seven OECD Countries 1970-1998

Total Health Spending in Europe as % GDP, 1990-1999

5.0

6.0

7.0

8.0

9.0

10.0

11.0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Year

Pe

rce

nt

GD

P

Austria

Denmark

France

Germany

Greece

Italy

Netherlands

Portugal

Spain

Sweden

United Kingdom

Life Expectancy in Europe, 1990 - 1998

73.0

74.0

75.0

76.0

77.0

78.0

79.0

80.0

1990 1992 1994 1996 1998

Year

Lif

e E

xp

ec

tan

cy

at

Bir

th, i

n Y

ea

rs

Austria

Finland

France

Germany

Netherlands

Portugal

Spain

Sweden

United Kingdom

TToottaall HHeeaalltthh EExxppeennddiittuurree

%%GGDDPP

TToottaall HHeeaalltthh EExxppeennddiittuurree,,

UUSS$$

IInnffaanntt MMoorrttaalliittyy

RRaatteess UK 6.7 1,607 5.9 Japan 7.6 2,283 3.7 Sweden 8.4 2,146 3.6 Canada 9.5 1,828 5.5 France 9.6 2,358 4.7 Germany 10.6 2,769 4.8 US 13.6 4,178 7.2

OECD Health Spending & Health Outcomes, 1998

Health Outcomes and Health Spending

6

7

8

9

10

11

12

13

14

3 4 5 6 7 8

Infant Mortality Rate (per 1000 live births)

Hea

lth

Exp

end

itu

re a

s %

GD

P, 1

997

USA

Japan

Sweden

UK

France

Germany

Canada

better health outcome

Measuring Health Systems Performance: Measuring Health Systems Performance: inputs, throughputs and outcomesinputs, throughputs and outcomes

Revenues Revenues /Inputs/Inputs

• Redistribution Redistribution (Equity)(Equity)

• Administrative Administrative EfficiencyEfficiency

• Risk-pooling/ Risk-pooling/

InsuranceInsurance

Health Services Health Services ThroughputsThroughputs

• Allocative Allocative EfficiencyEfficiency

• Technical Technical efficiencyefficiency

• Efficacy/ Efficacy/ EffectivenessEffectiveness

Health Health OutcomesOutcomes

• Aggregate Aggregate

• Disease Disease specific specific

• Socio-Socio-economic economic factorsfactors

Critical performance indicators needed at all levelsCritical performance indicators needed at all levels

Complex Nature of Health Care System

Transformation of Health Care from a “cottage industry” comprising individual practitioners to a highly professionalized and technologically intensive service “industry”with rapidly evolving production and technological frontiers

Health care “production” process...

Multiple input factors Complex production process Complex production settingsComplex interaction with the environmentComplex definition of products, outcomes and benefits

Challenges to measuring health system performance

Many areas of uncertainty in productivity due to:

Lack of data Lack of consistent and comparable dataDifficulty in relating financial inputs with production outputs and health outcomes Difficulty in adjusting for quality, external factors

Challenges in measuring productivity in health care:

Establishing common standards and definitions for: “Products”, Production processes Relating these to Cost, Quality and Cost-effectiveness What measurement tools are available?

SOCIO-ECONOMIC CONTEXT

Social services,Environ-

mental policies,

Otherinter-

sectoralprograms

Health Care Production

Setting

managedcare,gate-keepingfunctions,continuityof care,...

Health CareServices

clinical practicedrugs, medical

technology, HRD

Public Health

Programs,Health

Promotion

Health Outcomes(e.g. QALYs)

R&D, Investments

Structure and Context of Health Care “Production” System..

Examples of Tools for Regulation & Standards

Clinical procedures

Clinical practice guidelines, clinical pathways

Pharmaceuticals Clinical trials, GMP, drug registration, EDL

Medical devices Medical device regulation (ISO); technology assessment

Human resources

Certification, Licensing, CME

Standards and regulation of health system inputs

Performance Measurement: Tools and Instruments

Evidence-Based Medicine: Health Technology Assessment

evaluating efficacy, cost-effectiveness & appropriatenessassessment of multiple inputsPotential value in defining a bundle of effective health interventions (personal and public health)

Still in early stages of development

Accounting for production process

Note: 1. CC = complicating conditions.

U.S. Medicare DRGS

Australian DRGs (Version 4.1)

Croatian PPTP

106 Coronary Bypass with PTCA

F05A

Coronary Bypass with Invasive Cardiac Investig. Procedure with catastrophic CC /1

107

Coronary Bypass with cardiac catheterization

F05B

Coronary Bypass with Invasive Cardiac Investig. Procedure without Catastrophic CC

108 Other cardio thoracic procedures

F06A

Coronary Bypass without Invasive Cardiac Investig. Procedure with Catastrophic or Severe CC

109

Coronary Bypass without cardiac Catheterization

F06B

Coronary Bypass without Invasive Cardiac Investig. Procedure without Catastrophic or Severe CC

Coronary

Bypass Surgery

Source: Croatia Health Finance Study, 2003, The World Bank

Cycle of Medical Technology Assessment, Planning & Implementation

Health Professionals

Health facilities

HEALTH TECHNOLOGY ASSESSMENT- Identification of priorities- Testing and analysis- Synthesis- Dissemination

Pharmaceuticals

Medical Devices

As

se

ss

me

nt

P

lan

nin

g &

De

cis

ion

s

Acquisition

Incoming InspectionIm

ple

me

nta

tio

n

Investment planning

Standards & Protocols

Policy, Planning & Management Decisions

Education Policy

Planning, Needs

assessment

Inventory & Documentation

Commissioning & Acceptance

Monitoring Use & Performance

Maintenance

Decommissioning

Safety, Efficacy, Cost-

Effectiveness

Quality Assurance & Risk

Management

Evaluation of drugs, devices, procedures & delivery systems

Database-Building for Regulation,

Technology Assessment

Life Cycle Management

Health Service

Outcomes

POLICY ANALYSIS- Service Coverage- Planning (# & distribution)- Regulatory systems- Standards and Guidelines- Educational Policies- Ethical standards

Manufacturers

Third-Party Payers

Registration, licensing



mental policies,

Otherinter-

sectoralprograms


Setting


Health CareServices


technology, HRD

Public Health

Programs,Health

Promotion


R&D, Investments


Variety of production categories and settings

Categories of personal careAcute careIntensive careRehabilitative carePalliative careOutpatient (specialist) clinical carePrimary care (general practice)

How to bundle production processes?

Evaluating productivity under different health care organizational settings

Mixed results on the impact of organizational reforms in US in the 1990s:

Vertical and horizontal integrationNon-profit vs for-profit

European experience:“Internal markets”, separation of provider/payer functionsDecentralization & corporatization



mental policies,

Otherinter-

sectoralprograms


Setting


Health CareServices


technology, HRD

Public Health

Programs,Health

Promotion


R&D, Investments


FLOW OF

FUNDS

Relating production to financing and costs

System of Health Accounts offers:Comprehensive and consistent definition of “core” health care activities, boundariesInternational classification on sources and uses of health resourcesComparable description of the flow of funds from sources to uses

Is it sufficient to describe financial flows for productivity measures?

Health System Performance Evaluation Process

Utilization and Quality Reviews

Analysis of Outputs, outcomesand Expenditures

Provider levelPopulation

groups

Clinical and epidemiological

outcomes

NHA frameworkon resource flows

Evi

denc

e-B

a se d

Me d

icin

e

Ser

v ic e

ben

c hm

a rks

HT

A, C

ost-

e ff e

c ti v

ene s

s A

n al y

sis

Measuring Health Systems PerformanceRevenues Revenues

/Inputs/Inputs

• Redistribution Redistribution (Equity)(Equity)

• Administrative Administrative EfficiencyEfficiency

• Risk-pooling/ Risk-pooling/

InsuranceInsurance

Health Services Health Services ThroughputsThroughputs

• Allocative Allocative EfficiencyEfficiency

• Technical Technical efficiencyefficiency

• Efficacy/ Efficacy/ EffectivenessEffectiveness

Health Health OutcomesOutcomes

• Aggregate Aggregate

• Disease Disease specific specific

• Socio-Socio-economic economic factorsfactors

A comprehensive Health Management Information System needed to track critical

performance indicators at all levels

Structure of an integrated health management information system

patientsheath data

resources activities

authorisations

classifications

common data & functions

Health Care Management: daily

operational support

Patients, public

Clinical venues

Source: Adapted from Leo P. Vollebregt, EHTEL

Life-time patient record, analyses

Public information, education, etc.

Insurer/payerClaims processing

Utilization & quality reviews

Health policy, strategic planning,

regulation

Public healthReporting,

surveillance, statistics

European e-Health Initiatives: Potential Applications

Public health statistics, reporting & surveillanceBeneficiary management for insurers/payers

Eligibility checking, claims processing, utilization & quality reviews/ medical audits

Health care management Health policy, management and planning Patient Lifetime Health Records

E-Europe 2005 objectives

European Wide e-Health Insurance CardRegional Health Information Networks (broadband) connecting all Health ActorsOnline Health Services : e-Health Record, tele-consultation, e-medication, e-reimbursement (across national borders)

Introduction of Health Information Clearinghouse concept: public or private entity that facilitates processing of nonstandard health data into standard data elements

Opportunities created by EU Integration

Information standards motivated by EU e-Health initiativesHISA Health Information Systems Architecture

CEN – TC251 European Standards Centre

Specific Middleware Architecture open to all kinds of standards: HL7, IP, XML, JavaEffective strategy for dealing with Legacy Health SystemsStandard categories and definitions

EU regulation on patient confidentiality, privacy, security

Impact of EU Integration and Expansion...

Need for common information standards for health insurers/ purchasing agenciesNeed for transparency, comparability on quality of care, cost structuresNeed for security, privacy, patient confidentiality


Potential consolidation of providers and insurers seeking:

Economies of scale and scopeLower cost structuresHigher quality


Movement of goods, services and people across borders

Pharmaceuticals and medical devicesHealth professionals

Harmonization of regulationResearch and Development

Look for lessons from US Health Insurance Portability and Accountability Act (HIPAA), 1996

To improve portability & continuity of health insurance coverage in group & individual marketsAll entities covered by CMS (formerly HCFA) must be in compliance with electronic transactions and code sets standards (by Oct 16, 2003)

ConclusionMany positive developments in measurement tools, but will require strategic coordination among different domains to obtain meaningful results in aggregateDevelopment of a comprehensive strategy for health management information system is critical EU integration offers opportunities and motivation for finding common standards, strategies

Relating microeconomic efficiency with macro-level productivity of the health care sector in the EU...

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