Measuring Performance in the Health Sector What do international comparisons tell us? Mark Pearson Head, OECD Health Division Berlin, March 2010

Why do economists need to know about health systems? Money: It is already larger than manufacturing industry in some countries Jobs: Health was virtually the only sector that kept on expanding jobs through the economic crisis Growth: Country after country identifies health as a sector which will drive growth over the coming years 2

What most economists know about health 3

What we need to do to measure performance Identify Inputs Identify Outputs (quantities of services and goods produced/consumed) Identify Outcomes (changes in health status attributable to outputs; adjust for ‘other factors’ – income, lifestyle) Identify policy features which explain differences in performance Great in theory, but poor quality Outcome measures are a big problem 4

Impact of SHA on national health expenditure estimates Austria: pre-SHA implementation: 7.5% of GDP (2003) post-SHA implementation: 10.2% (2003) France: pre-SHA implementation: 10.1% of GDP (2003) post-SHA implementation: 10.9% (2003) Portugal: pre-SHA implementation: 8.2% of GDP (1999) post-SHA implementation: 8.8% (2000)  Due mainly to redefining boundaries of health care (e.g. long-term care), identifying other (private) sources of funding, etc.

Health expenditure per capita Health expenditure is for the insured population rather than resident population. 2. Current health expenditure. Source: OECD Health Data 2009, OECD (

7 Health expenditure as a share of GDP (2007) 1. Public and private expenditures are current expenditures (excluding investments). 2. Current health expenditure.. 3. Health expenditure is for the insured population rather than resident population. Source: OECD Health Data 2009, OECD (

Growth rates in spending in Germany have been low over past 10 years Annual average real growth in per capita health expenditure, Source: OECD Health Data 2009, OECD (

The average length of stay for acute care has fallen in nearly all OECD countries Average length of stay for acute care Source: OECD Health Data 2009, OECD (

Appendectomy procedures per 100,000 population, 2007 or latest available year

Knee replacement procedures, per 100,000 population, 2007 or latest available year

Hip replacement procedures, per 100,000 population, 2007 or latest available year

Does more spending deliver longer lives?

Does more spending deliver longer lives? 2007 (or latest year available) Source: OECD Health Data 2009, OECD (

Quality of care is improving

Avoidable hospital admission rates, 2007

Out of pocket and private health insurance as a share of total health expenditure,

Low-income populations report unmet care needs due to cost * Did not get medical care, missed medical test, treatment or follow-up, did not fill prescription or missed doses. Unmet care need* due to costs, by income group, 2007 Source: Commonwealth Fund (2008).

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