OECD/NBS Workshop on national accounts 27-31 October 2008 Paris

1. OECD/NBS Workshop on national accounts27-31 October 2008Paris Towards measuring the volume of health and education services Draft OECD Handbook Paul Schreyer, OECD/STD

2. Contents • Background • General concepts • Education • Health • Way forward

3. Background: OECD Project • Strong and continueddemand for output measures of education and health by policy-makers • EuropeanRegulation • Project started in 2005, endorsement by CSTAT • Builds on previouswork: Eurostat Handbook on Volume and Prices, Atkinson Report, country experiences • Workshops in London (2006) and Paris (2007) • Objectives: • OECD Handbook • Data development

4. Background: An old question – what is new? 1. Joint work with sector specialists • Elaborated jointly with OECD’s specialised networks • Network of education experts • Network of health experts • Both networks have strong interest in measuring appropriate volume output

5. Background: An old question – what is new? 2: Joint treatment of temporal and spatial dimensions • Education and health PPPs are of great importance to analysts • PPPs and national accounts have to be consistent • Handbook deals with both dimensions in parallel

6. Concepts and terminology • Distinction must be made between inputs, outputs, outcomes - • Best explained by way of a graph

8. If outcome indicators are used for quality adjustment, they: • Should control for any other factors that affect outcome for consumers (e.g. socio-economic background of pupils, environmental impact on health)

9. Quality adjustment • First and important step towards capturing quality change is the correct stratification, i.e., the comparison of products with the same or at least similar characteristics. • Explicit quality adjustment may make it necessary to invoke outcomes • Handbook: • Health: discussion but no proposals for explicit quality adjustment • Education: discussion and proposal for explicit quality adjustment (exam scores) for secondary-level education

10. Values and weights • Current price values of non-market production = sum of costs • Volumes: • Direct volume index =volume change of items, aggregation with cost weights • Deflation: apply price index to values • (Quasi) price index = unit costs: costs per unit of output • as opposed to costs per unit of input

11. Education – comparisons in time (1) • Basic approach: • Unit of output = (quality-adjusted) volume of teaching services delivered • Broadly, measured as pupil (hours), the number of hours during which pupils receive teaching services • But differentiation according to level of education important

12. Education – comparisons in time (2)

13. Education – comparisons in time (3) • To be developed: measuring research output of tertiary education establishments

14. Education – comparisons in time (3) Volume output measures of non-market education services, France

15. Health – comparisons in time (1) • Disease-based approach • Increasing number of countries use disease-based approach • Reflects changes in administrative practice (e.g. shift to DRG system in Germany’s hospital administration) • Unit of output = (complete) treatment • But differentiation by type of activity important • Unit of output may vary between activities

16. Health – comparisons in time (2)

17. Health – comparisons in time (3)

18. Health – comparisons in time (4)

19. Health – comparisons in time (5)

20. Health – comparisons in time (6) Input price index and output-based price index for acute hospital services in Denmark

21. Overall effects - France Impact of output and input-based methods on total value-added, France

22. Way forward • Health PPPs further developed in 2009 • Completion of the chapter on health PPPs • Presentation of draft to health and education experts • Revision and final draft in 2009

23. Thank you!