1. Relating microeconomic efficiency with macro-level productivity of the health care sector in the EU Context Akiko Maeda, Ph.D. Lead Health Specialist The World Bank Europe and Central Asia Region

2. Presentation Outline Overview Defining “product” and “productivity” in health system Measurement tools and performance standards Critical role of health information systems Relevance in the EU Context

3. 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

4. Health, Health System and Growth Macroeconomic Growth Improved Health Outcomes Health System Productivity

8. OECD Health Spending & Health Outcomes, 1998

10. Measuring Health Systems Performance: inputs, throughputs and outcomes Revenues /Inputs Redistribution (Equity)Redistribution (Equity) Administrative EfficiencyAdministrative Efficiency Risk-pooling/ InsuranceRisk-pooling/ Insurance Health Services Throughputs Allocative EfficiencyAllocative Efficiency Technical efficiencyTechnical efficiency Efficacy/ EffectivenessEfficacy/ Effectiveness Health Outcomes AggregateAggregate Disease specificDisease specific Socio- economic factorsSocio- economic factors Critical performance indicators needed at all levels

11. 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

12. Health care “production” process... Multiple input factors Complex production process Complex production settings Complex interaction with the environment Complex definition of products, outcomes and benefits

13. Challenges to measuring health system performance Many areas of uncertainty in productivity due to: Lack of data Lack of consistent and comparable data Difficulty in relating financial inputs with production outputs and health outcomes Difficulty in adjusting for quality, external factors

14. 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?

15. SOCIO-ECONOMIC CONTEXT Social services, Environ- mental policies, Other inter- sectoral programs Health Care Production Setting managed care, gate- keeping functions, continuity of care,... Health Care Services clinical practice drugs, medical technology, HRD Public Health Programs, Health Promotion Health Outcomes (e.g. QALYs) R&D, Investments Structure and Context of Health Care “Production” System..

16. SOCIO-ECONOMIC CONTEXT Social services, Environ- mental policies, Other inter- sectoral programs Health Care Production Setting managed care, gate- keeping functions, continuity of care,... Health Care Services clinical practice drugs, medical technology, HRD Public Health Programs, Health Promotion Health Outcomes (e.g. QALYs) R&D, Investments Structure and Context of Health Care “Production” System..

17. Examples of Tools for Regulation & Standards Clinical proceduresClinical practice guidelines, clinical pathways PharmaceuticalsClinical trials, GMP, drug registration, EDL Medical devicesMedical device regulation (ISO); technology assessment Human resourcesCertification, Licensing, CME Standards and regulation of health system inputs

18. Performance Measurement: Tools and Instruments Evidence-Based Medicine: Health Technology Assessment evaluating efficacy, cost-effectiveness & appropriateness assessment of multiple inputs Potential value in defining a bundle of effective health interventions (personal and public health) Still in early stages of development

19. 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

21. SOCIO-ECONOMIC CONTEXT Social services, Environ- mental policies, Other inter- sectoral programs Health Care Production Setting managed care, gate- keeping functions, continuity of care,... Health Care Services clinical practice drugs, medical technology, HRD Public Health Programs, Health Promotion Health Outcomes (e.g. QALYs) R&D, Investments Structure and Context of Health Care “Production” System..

22. Variety of production categories and settings Categories of personal care Acute care Intensive care Rehabilitative care Palliative care Outpatient (specialist) clinical care Primary care (general practice) How to bundle production processes?

23. Evaluating productivity under different health care organizational settings Mixed results on the impact of organizational reforms in US in the 1990s: Vertical and horizontal integration Non-profit vs for-profit European experience: “ Internal markets ”, separation of provider/payer functions Decentralization & corporatization

24. SOCIO-ECONOMIC CONTEXT Social services, Environ- mental policies, Other inter- sectoral programs Health Care Production Setting managed care, gate- keeping functions, continuity of care,... Health Care Services clinical practice drugs, medical technology, HRD Public Health Programs, Health Promotion Health Outcomes (e.g. QALYs) R&D, Investments Structure and Context of Health Care “Production” System.. FLOW OF FUNDS

25. Relating production to financing and costs System of Health Accounts offers: Comprehensive and consistent definition of “ core ” health care activities, boundaries International classification on sources and uses of health resources Comparable description of the flow of funds from sources to uses Is it sufficient to describe financial flows for productivity measures?

26. Health System Performance Evaluation Process Utilization and Quality Reviews Analysis of Outputs, outcomes and Expenditures Provider level Population groups Clinical and epidemiological outcomes NHA framework on resource flows Evidence-Based MedicineService benchmarks HTA, Cost-effectiveness Analysis

27. Measuring Health Systems Performance Revenues /Inputs Redistribution (Equity)Redistribution (Equity) Administrative EfficiencyAdministrative Efficiency Risk-pooling/ InsuranceRisk-pooling/ Insurance Health Services Throughputs Allocative EfficiencyAllocative Efficiency Technical efficiencyTechnical efficiency Efficacy/ EffectivenessEfficacy/ Effectiveness Health Outcomes AggregateAggregate Disease specificDisease specific Socio- economic factorsSocio- economic factors A comprehensive Health Management Information System needed to track critical performance indicators at all levels

28. Structure of an integrated health management information system patients heath 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/payer Claims processing Utilization & quality reviews Health policy, strategic planning, regulation Public health Reporting, surveillance, statistics

29. European e-Health Initiatives: Potential Applications Public health statistics, reporting & surveillance Beneficiary 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

30. E-Europe 2005 objectives European Wide e-Health Insurance Card Regional Health Information Networks (broadband) connecting all Health Actors Online 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

31. Information standards motivated by EU e-Health initiatives HISA Health Information Systems Architecture CEN – TC251 European Standards Centre Specific Middleware Architecture open to all kinds of standards: HL7, IP, XML, Java Effective strategy for dealing with Legacy Health Systems Standard categories and definitions EU regulation on patient confidentiality, privacy, security

32. Impact of EU Integration and Expansion... Need for common information standards for health insurers/ purchasing agencies Need for transparency, comparability on quality of care, cost structures Need for security, privacy, patient confidentiality

33. Impact of EU Integration and Expansion... Potential consolidation of providers and insurers seeking: Economies of scale and scope Lower cost structures Higher quality

34. Impact of EU Integration and Expansion... Movement of goods, services and people across borders Pharmaceuticals and medical devices Health professionals Harmonization of regulation Research and Development

35. Look for lessons from US Health Insurance Portability and Accountability Act (HIPAA), 1996 To improve portability & continuity of health insurance coverage in group & individual markets All entities covered by CMS (formerly HCFA) must be in compliance with electronic transactions and code sets standards (by Oct 16, 2003)

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