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UK Centre for the Measurement of Government Activity

UK Centre for the Measurement of Government Activity. Measuring health output and productivity in the UK: an essential element of public accountability. Phillip Lee, James Hemingway & Christopher Little OECD/ONS/Govt of Norway Workshop, London, 3 October 2006. Outline.

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UK Centre for the Measurement of Government Activity

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  1. UK Centre for the Measurement of Government Activity Measuring health output and productivity in the UK: an essential element of public accountability Phillip Lee, James Hemingway & Christopher Little OECD/ONS/Govt of Norway Workshop, London, 3 October 2006

  2. Outline • UK National Health Service • Output – data & methodology • Input – data & methodology • Output & productivity estimates • Current work

  3. 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

  4. 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

  5. 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)

  6. 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

  7. Volume of Health Output – National Accounts Index 1999 = 100 Average growth: +3.2 per cent a year

  8. 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)

  9. 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

  10. 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

  11. Volume of Health Input Index 1999 = 100 Highest growth: +4.6 per cent a year Indirect labour, Paasche drugs deflator, Capital services Lowest growth: +3.9 per cent a year Direct labour, NIC drugs deflator, Capital consumption

  12. 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

  13. Volume of Health Output– With & Without Quality Adjustments Index 1999 = 100 Including quality adjustments: +5% Without quality adjustments: +3.8%

  14. Productivity – Without Quality Adjustments Index 1999 = 100 Lowest inputs growth -0.9% pa Highest inputs growth -1.5% pa

  15. Productivity – With Quality Adjustments Index 1999 = 100 Lowest inputs growth +0.2% pa Highest inputs growth -0.5% pa

  16. 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

  17. 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

  18. Contact christopher.little@ons.gsi.gov.uk

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