HealthcareCOSTS andPERFORMANCEin the OECD
Adapted from Presentation to Economics for Public Management – Expenses classUniversity of Toronto, June 2009
Presented by Alex Rascanu [email protected]
www.rascanu.com
Healthcare Expense= consumption of health goods and services + capital investment in healthcare infrastructure
Good HealthDetermined by : a. Bio-medical, lifestyle and socio-economic factorsb. Level of healthcare resources available
Key driver of a population’s productivity and consequent economic growth
OECDaimed at international cooperation for better economic and social policies; 30 industrialized countries are members
AGENDA
2. Performance-Related Goals in OECD
1. Costs in OECD
3. Costs & Performance in OECD
PART 1: OECD Countries Healthcare Costs
Expenditure on healthAs a percentage of GDP, 2006 (i.e. latest available year)
Data: OECD Health Data 2008 (June 2008).
Turke
y
United Kingdom
Australia
OECD average
Canada
Switz
erland
United St
ates
0
2
4
6
8
10
12
14
16
18
Public Private
5.7%
8.4% 8.7% 8.9%10%
11.3%
15.3%
Health care costs across the OECD: expected to increase each year until 2050 by 2 to 4 % of GDP
International Comparison of Spending on Health, 1980–2006
Average spending on healthper capita ($US PPP)
Total expenditures on healthas % of GDP
Data: OECD Health Data 2008 (June 2008).
1990: USA was the only country that spent more than 10% of their GDP on health goods and services2000: 4 countries were spending that much on health goods and services2006: The number has risen to 6 countries.
Turke
y
United Kingdom
OECD average
Australia
Canada
Switz
erland
United St
ates
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
7000.0
Public Private
OECD Expenditure on healthPer capita ($US PPP), 2006
$591
$2760 $2824 $2999
$3678
$4311
$6714
Data: OECD Health Data 2008 (June 2008).
Canada’s expense on healthcare was 20% larger than the OECD average.
OECD Out-of-Pocket Health Care Spendingper Capita, 2006
Adjusted for Differences in the Cost of Living
Data: OECD Health Data 2008 (June 2008).
Switzerland USA Australia Canada OECD average$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$857
$546 $532$483
$1,305
Out-of-pocket citizens’ healthcare spending is another relevant consideration. Swiss citizens pay on average 50% more than the
Americas and 150% more than the Canadians.
2. Cost control
1. Access to services
3. Efficiency
4. Effectiveness
PART 2: OECD Countries Healthcare System Performance-Related Goals
- Provide healthcare insurance coverage- Ensure timely service availability
Easier to control spending in countries with single-payer systems or national health services
Very difficult to measure efficiency, but availability of cross-national data helps.
Reduce errors in delivery, increase workforce’s technical skills,better meet the expectations of patients and consumers.
PART 3: Healthcare Systems Cost and Performance: Canada, Australia and USA
Country Life expec-tancy
Infant Mortali-ty Rate
Physicians per 1000 people
Nurses per 1000 people
Per capita expendi-ture on health (USD)
Healthcare costs as a percent of GDP
% of govern-ment revenue spent on health
% of health costs paid by government
Australia
81.1 4.7 2.8 9.7 2,999 8.8 17.7 67.0
Canada 80.4 5.4 2.1 8.8 3,678 10.0 16.7 70.0
US A 77.8 6.9 2.4 10.5 6,714 15.3 18.5 46.0
WHO healthcare systems ranking: Canada #30, Australia #32, USA #37. Main challenges in Canada’s healthcare system: i. wait times (“This is a country in which dogs can get a hip replacement in under a week and in which humans wait two to three years” –Dr. quoted in NYT);
ii. medical professionals shortage (1 less doctor per thousand people as compared to OECD average, 1.1 less nurses per thousand people as compared to OECD average)
Magnetic Resonance Imaging (MRI) Unitsper Million Population, 2006
Data: OECD Health Data 2008 (June 2008).
Australia Canada OECD average Switzerland USA0
5
10
15
20
25
30
In recent years there has been rapid growth in the availability of diagnostic technologies such as MRI units. The number of MRIs
used in Canada has increased to 6.2 per million population, but is still lagging behind the OECD average of 10.2.
Life Expectancy at Birth, 2006
Data: OECD Health Data 2008 (June 2008).
Years
USA OECD average Canada Australia Switzerland0
10
20
30
40
50
60
70
80
90
Female Male
80.475.2
82.377.1
82.778
83.578.7
84.279.2
Large gains in life expectancy over the past decades, due to improvements in living conditions, public health interventions and
progress in medical care. In 2005, life expectancy at birth in Canada was 1 ½ year higher than the OECD average.
Conclusion
There is some positive correlation between public healthcare costs and subsequent performance, but citizens’ health is also heavily influenced by lifestyle and socio-economic factors.
Bibliography1. Organization for Economic Cooperation an. (2009). OECD Health Data 2008. How does
Canada Compare. Retrieved June 7, 2009 from OECD website: www.oecd.org/health/healthdata
2. Docteur, E. (June 2003). Reforming Health Systems in OECD Countries. Presentation given during OECD Breakfast Series in Partnership with NABE, Washington, DC.
3. The Canadian Press (2008, November 13). Health-care spending to reach $5,170 per person. CTV (Toronto, ON). Retrieved on June 9, 2009 from http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081113/healthcare_inflation_081113/20081113?hub=Canada
4. Anderson, G. F. & Markovich, P. (November 2008). Multinational Comparisonsof Health Systems Data, 2008. Study released by the Commonwealth Fund, New York, NY.
5. Wilkie, J., & Young, A. (2009). Why health matters for economic performance. Australian Treasury Economic Roundup. 3(1). 57-72. Retrieved June 10, 2009, from http://www.treasury.gov.au/documents/1496/PDF/05_Why_health_matters.pdf
6. Organization for Economic Cooperation an. (2009). OECD Factbook 2009. Health Expenditure, 220-221.
7. About OECD. (n.d). Retrieved June 9, 2009 from OECD website: http://www.oecd.org/pages/0,3417,en_36734052_36734103_1_1_1_1_1,00.html
8. Docteur, E. (January 2004). More value for money: Improving efficiency in OECD health systems. Presentation given during conference Health Systems - Approaching the Future, Berlin, Germany.
Bibliography
Appendix: Part 1
OECD Countries Expenditure on healthAs a percentage of GDP, 2006 (i.e. latest available year)
Turke
yKorea
Czech Rep
...
Irelan
dJap
an
Hungary
United K...
Norway Ita
ly
Icelan
d
Netherl
...
Denmark
Canad
a
Portuga
l
France
United St
... 0
2
4
6
8
10
12
14
16Public Private
Data: OECD Health Data 2008 (June 2008).
Case: Waiting times for elective surgery
Waiting times reported by those needing elective surgery in 2001
AUS CAN US ____________________________Less than 1 month 51% 37% 63%
1 to less than 4 months 26 36 32
4 months or more 23 27 5
SOURCE: Blendon et al. 2002
Appendix: Part 2
Improving efficiency in OECD health systems
Within OECD: very large cross-country variation in resources, activity and health system performance
Reforms Required: - Demand-side reforms- Supply-side reforms- Structural reforms
Highest spending and activity levels do not always translate into best results (e.g. health-care outcomes, waiting times, patient and consumer satisfaction, equitable access to care)
Appendix: Part 3 - Personal Remarks
Personal Remarks: Concluding Thoughts on Healthcare Costs and Performance in the OECD
• Systems could benefit from move away from blunt costcontainment instruments to more sophisticated approaches that take quality, outcomes, and value into account• Increasing efficiency may require some additional, targeted investments (e.g., in information systems or management Improvements)• Important to adopt an evidence-based approach– Evidence-based medicine– Evidence-based policy making