Basic concepts for price and output measurement in health Ann Lisbet Brathaug Statistics Norway

2 Definition of output The health output is the quantity of health care received by patients, adjusted to allow for the qualities of services provided, for each type of health care provided. The quantity of health care received by patients should be measured in terms of complete treatments Two important elements in the definition: – adjustment for quality – complete treatments

3 Current and constant prices Current prices: – Aggregation of the transactions that has taken place Constant prices: – Describe an economic situation of a particular year in the prices of another year Value index = price index x volume index

4 Estimating health output at constant prices Most of health services is non-market, hence, no market prices exists Two options for constant price estimates: – direct volume measurements (output indicator method) or – deflating inputs (input methods) Output indicator methods is recommended

5 Hospital services - methods DRGs with quality adjustments Methods based on the ICD classification if detailed main diagnosis,appropriate costs and quality adjustments Inpatients grouped by detailed hospital disciplines Occupant days by type of institutions (for hospital psychiatric services)

6 Methods for rehabilitation and nursing services Number of occupant days by care of level Number of occupant days by type of institutions (proxy for care of level)

7 Medical practice services - General practitioners - methods Total number of consultations by treatment or diagnosis (quality adjusted) Collective agreements: As above if available, or total number of (potential) patients + annual sample survey in order to give the number of consultations and specific acts provided The total number of consultations + quality changes arising from service characteristics (second best) If Market: Deflation with CPI (sub index for GP-services)

8 Medical practice services - Specialists - A and B methods A: The number of first visits broken down by type of specialist and type of treatment if proper weighting and quality adjustments B: Number of first visits by specialist Market services: CPI sub index

9 Dental practice service - A and B methods A: Number of first visits by type of treatment if B: Total number of consultations Market services: Deflation with CPI sub index

10 Social work services with accommodation The discussion is similar to nursing services A: Number of occupant days by type of institution if..... B: Number of occupant days

11 Examples from Norway

12 Volume indicators – General hospitals

13 Constant prices – general hospitals (HP1)

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15 Hospitals (HP1) – Growth rates from the previous year