Title: Working Party on National Accounts
1Towards a better measure ofnon market output
- The OECD non market project
- Report of the joint OECD/UK/Norway seminar
- (London, October, 3-5, 2006)
2The context SNA 93
- 16.134. In principle, volume indices may
always be compiled directly by calculating a
weighted average of the quantity relatives for
the various goods or services produced as outputs
using the values of these goods and services as
weights. Exactly the same method may be applied
even when the output values have been estimated
on the basis of their costs of production. - 16.138. There is no mystique about non-market
health or education services which make changes
in their volume more difficult to measure than
volume changes for other types of output, such as
financial or business services or fixed tangible
assets. Moreover, changes in their volume are
also needed in order to be able to measure volume
changes for the actual consumption of
households. The same principles apply to the
measurement of consumption as to production.
3The context the European handbook
pupil-hours or number of pupils
- Education the quantity of teaching received by
the students, adjusted to allow for the qualities
of the services provided, for each type of
education -
- the transfer of knowledge, successfully or not
- Health quantity of health care received by
patients, adjusted to allow for the qualities of
service provided, for each type of health care. - The quantity of health care received by
patients should be measured in terms of complete
treatments .
class size, school inspections, scores ?
by ISCED-97
number of treatments, or consultations, or first
visits
?
by providers, then by functional care, then by
DRGs
4The context the Atkinson review
- Principle A the measurement of government
non-market output should, as far as possible,
follow a procedure parallel to that adopted in
the national accounts for market output. - Principle B the output of the government
sector should in principle be measured in a way
that is adjusted for quality, taking account of
the attributable incremental contribution of the
service to the outcome. - Principle C Account should be taken of the
complementarity between public and private
output, allowing for the increased real value of
public services in an economy with rising real
GDP. - 6 other principles (H on triangulation)
- Note the UK had already output methods, but
sub-optimal ?
good practice for quality adjustment
5The context a transatlantic gap ?
- European countries by commission decision
2002/990/EC, almost all countries will apply
output methods in education and health according
to the European handbook recommendations, in 2006
or following years. - Australia and New Zealand have applied also
output methods for years. - North America (US, Canada) still apply input
methods - Output methods often lt Input methods
- There could be a transatlantic gap of 0.25 of
GDP growth / year. - OECD role is to promote international
comparability.
6The OECD non market project
- This project, focussed on education and health
especially, both in temporal and spatial
dimensions, was presented by OECD at the 2005
meeting of the Committee on Statistics. - INSEE has assigned Alain GALLAIS to coordinate
this project in OECD, for 18 months (April 2006
-gt September 2007). - workshop in London, 3-5 October 2006, co-hosted
by ONS and the government of Norway. Attendance
of more than 160 experts of National Accounts,
PPP, education, health and public services
efficiency fields.
7Objective OECD handbook on best practices
- Review of best practices in output methods, more
detailed international guidelines for temporal
analysis - Frameworks and formulas for output methods in PPP
limited to education and health
- OECD non-EU countries
- Questionnaire OECD June 2006
- AU, NZ wo quality adjustments, projects in the US
? - gt Promotion of output methods
- EU countries
- Questionnaire Eurostat June 2006
- Almost all countries in the process, but few with
quality adjustment - gt Promotion of best quality adjustments
- The originality of the OECD non-market project
develop a synergy between experts in NA, PPP,
education, health and public services efficiency
fields (several networks).
8The London seminar the UK experience
- Of course, the UK was not chosen by hazard to
host the workshop the ATKINSON review and then
the creation of the UKCeMGA inside the ONS have
provided a good experience, still in progress
(public order and safety, social services). - Importance of the communication strategy. Key
stakeholders. - Need for more timely, detailed and better quality
data on government expenditure. - A lot of proposals by DfES (education) and DH
(health). - Not always easy for the NA unit.
9The London seminar nordic experiences
- Norwegian StatRes project transparency and
benchmarking. Mapping the current information
jungle (input, activity, output, outcome) - KOSTRA for municipalities
- SAMDATA for health statistics
- Skoleporten for education
- Each sector / agency has its own specific website
- Swedish NA all individual services, including
social services and culture. - Finnish project for NA each public entity is
asked on its shares of turnover / costs and on
its outcomes / quantity indicators. No quality
adjustment. Example
10The London seminar US projects
- There is no agenda for moving to output methods.
- But there are 3 parallel projects on alternative
methods for education - Barbara FRAUMENI et al., relying on human capital
theory - Michael CHRISTIAN et al., more classic output
method - Use of market prices.
- In health, research is still "in its nascent
stage. A paper of Michael CHRISTIAN has explored
several possibilities, mainly relying on DRGs,
leading to counter intuitive results (output lt
lt input).
11The London seminar terminology aspects
- In the view of policy makers
Activities quantities ?
Source Wouter Van Dooren
12The London seminar terminology aspects
No ! (quality adjustment)
- In the view of health economists
- The term of outcomes refers to a
multi-dimensional concept of (positively or
negatively expressed) characteristics of output,
such as health changes, responsiveness of
services to peoples non-health expectations
(e.g., no waiting time, other convenience of
access, quality of facilities, and amenities in
hospitals or nursing homes). There are several
possibilities for valuation of changes in health
states measured, such as Quality Adjusted Life
Years (QALYs).
Source Manfred HUBER
13The London seminar scares and hopes about
output methods
- National Accountants
- Before, with hypothesis of null productivity,
countries were comparable. - Now, with diversity on quality adjustment,
countries could not be comparable any longer. - Data on productivity will be scrutinized by
politicians - But new productivity is often negative !
- Output is not outcome
- Policy makers
- Before, output in NA was of no interest.
- Interest of harmonization.
- Now, NA could capture all outcomes useful for
policy makers, with an official and consistent
label, according to the vocation of NA. - Interest of explanations.
- NA can only be one-dimensional
14The London seminar differencesbetween output
and outcome (1)
- Influence of consumers characteristics
- The outcome can be influenced by consumers
characteristics (level of knowledge of pupils,
health status of patients before they are
provided any service). Should the output be as
close as possible of outcome, or should it
neutralize consumers characteristics to rely
only on providers ? - Externalities
- In general, National accounts do not record
externalities (pollution). But some expected
outcomes of an activity can concern other ones
(road safety for health or health status for
market economy). Should the output of public
services record the externalities on other
activities ?
15The London seminar differencesbetween output
and outcome (2)
- Inequalities
- Some policies in individual non market services
focus on reduction of inequalities (of knowledge
and skills in education). Market activities do
never take them into account (total F C single
addition of individual F C, total income).
Should NA make an exception for non market
services ? Including individual services ? - Coverage of policy makers purposes
- Must all the dimensions of outcomes be reflected
in the one-dimensional output ?
16The London seminar education
- The European handbook suggests several
possibilities for quality adjustments - Pupil-hours (if possible adjusted for occasional
absence of pupils) are a better quantity
indicator than number of pupils - The class-size or pupil/teacher ratio after a
sound analysis on its effect on the quality of
teaching - School inspections
- Examination data.
- But are all these quality adjustments consistent
with each other ?
17The London seminar education for PPP (not yet
validated)
Translation of the same formula in spatial
dimension
Output in NA (my point of view) OECD Education unit statistics Outcome for policy makers (ex of FR point of view)
PISA national scores corrected on ESCS time-lag PISA national average scores Level of knowledge
Out of purpose of NA PISA national SD Reduction of inequalities
Externality ? Out of purpose of NA Citizenship
Quality adjustment for upper second. vocational Rates of employment Insertion in Labour market
18Education draft framework for PPP (M NM)
Recommendations of the handbook Finest detail of cycles Act. F.C. Num. pupils Quality index
Pre-school - ISCED 0 Pre-school none
Primary school ISCED 1 Primary school PISA / PIRLS TIMSS ?
Primary school ISCED 1 Special primary PISA / PIRLS TIMSS ?
Lower secondary ISCED 2 Secondary 1st stage PISA
Lower secondary ISCED 2 Special secondary PISA
Upper secondary - ISCED 3 general, pre-voc. PISA
Upper secondary - ISCED 3 vocational PISA employ. rate ?
Post-sec. non tert. - ISCED 4 Post-secondary non tertiary PISA
Higher education - ISCED 5 and 6 Long superior ISCED 5A Number of degrees and duration of studies.
Higher education - ISCED 5 and 6 Short technical superior-ISCED 5B Number of degrees and duration of studies.
Higher education - ISCED 5 and 6 Advanced research qualification ISCED 6 Number of degrees and duration of studies.
Other education
19The London seminar proposals of DH for health
output (UK)
- Two treatments might have the same costs, but
one might result in a major increase in health
outcomes (longer life, or better quality life)
while the other might have much smaller health
gain. The aggregate measure of healthcare output
should reflect the number of treatments with
major health gain, rather than just taking
account of current costs. - Use of value weights (QALY) instead of cost
weights. - Use of mortality rates and waiting times.
- Use of value weight for statins prevention
better than curative care. - Patient experience.
- None of these has been into account in British NA
yet. Some proposals can be exclusive of each
other.
20New Paris Health accounts meeting,6th of
October, 2006
- Cost of illness has been compared among a
dozen of European countries, and Eurostat find
the results homogeneous and plausible. - Cost of illness is recommended for
international comparisons, should be integrated
in SHA, which would harmonize some conventions
(fixed costs, prevention, collective purposes) - NL wants to calculate volume and price with this
framework (no methodology yet). - But few data on QALY (main idea for quality
adjustment).
21Possible content of the final OECD best
practices manual
- Synthesis of national experiences and results
- Definitions, principles and terminology (input /
output / outcome) - Then by activities (education, health, public
order and safety ?) - Definitions, principles, terminology
- Review of (best) stratification and quantity
indicators - Review of best quality indicators
- Temporal formulas
- Spatial framework and formulas
- Verification of consistency between market and
non-market methods - For September 2007
22Next steps
- 2 meetings in 2007 for the Eurostat-OECD NA-PPP
task force on Non Market Services - ? Meetings in 2007 for the (planned) upcoming
OECD task force on Health specific PPP - Permanently in contact with countries to study
their practices and projects - Submission of proposals to Health and Education
OECD networks - Workshop in Paris, 7-8 June 2007, on the model of
the London workshop. - Presentation of draft handbook to the October
2007 WPNA