Healthcare Costs And Performance In The OECD

Healthcare
COSTSand
PERFORMANCE
in the OECD
Adapted from Presentation to Economics for Public Management – Expenses class
University of Toronto, June 2009
Presented by Alex Rascanu
alexandru.rascanu@utoronto.ca
www.rascanu.com

Healthcare Expense
=consumption of health goods and services +capital investment in healthcare infrastructure
Good Health
Determined by :
a. Bio-medical, lifestyle and socio-economic factors
b. Level of healthcare resources available
Key driver of a population’s productivity and consequent economic growth

OECD
aimed at international cooperation forbetter economic and social policies; 30 industrialized countries aremembers

AGENDA
1. Costs in OECD
2. Performance-Related Goals in OECD
3. Costs & Performance in OECD

PART 1: OECD Countries Healthcare Costs
Expenditure on health
As a percentage of GDP, 2006 (i.e. latest available year)
15.3%
11.3%
10%
8.7%
8.9%
8.4%
5.7%
Health care costs across the OECD: expected to increase
each year until 2050 by 2 to 4 % of GDP
Data: OECD Health Data 2008 (June 2008).

International Comparison of Spending on Health, 1980–2006
Average spending on healthper capita ($US PPP)
Total expenditures on healthas % of GDP
1990: USA was the only country that spent more than 10% of their GDP on
health goods and services
2000: 4 countries were spending that much on health goods and services
2006: The number has risen to 6 countries.

OECD Expenditure on health
Per capita ($US PPP), 2006
$6714
$4311
$3678
$2999
$2824
$2760
$591
Canada’s expense on healthcare was 20% larger than the OECD average.

OECD Out-of-Pocket Health Care Spendingper Capita, 2006Adjusted for Differences in the Cost of Living
$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.

PART 2: OECD Countries Healthcare System Performance-Related Goals
1. Access to services
- Provide healthcare insurance coverage
- Ensure timely service availability
2. Cost control
Easier to control spending in countries with
single-payer systems or national health services
3. Efficiency
Very difficult to measure efficiency,
but availability of cross-national data helps.
4. Effectiveness
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
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
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
Years
83.5
84.2
82.3
82.7
79.2
80.4
78
78.7
77.1
75.2
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.

Thank you!
Alex Rascanu
alexandru.rascanu@utoronto.ca
www.rascanu.com

Bibliography
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
Docteur, E. (June 2003). Reforming Health Systems in OECD Countries. Presentation given during OECD Breakfast Series in Partnership with NABE, Washington, DC.
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
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 health
As a percentage of GDP, 2006 (i.e. latest available year)

Appendix: Part 2
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 3 - Personal Remarks
Improving efficiency in OECD health systems
Within OECD: very large cross-country variation in resources, activity and health system performance
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)
Reforms Required:
- Demand-side reforms
- Supply-side reforms
- Structural reforms

Personal Remarks: Concluding Thoughts on Healthcare Costs and Performance in the OECD
Systems could benefit from move away from blunt cost
containment 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