This presentation was made by Michael Müller, OECD, at the 2nd Health Systems joint Network Meeting for Central, Eastern and Southeastern European Countries held in Tallinn, Estonia, on 1-2 December 2016

1. INFORMING POLICY
WITH HEALTH
ACCOUNTS
Michael Müller, OECD Health Division
2nd HEALTH SYSTEMS JOINT NETWORK MEETING FOR
CENTRAL, EASTERN AND SOUTHEASTERN EUROPEAN
COUNTRIES
Tallinn, 1-2 December, 2016

2. Health Accounts –What is it?
Early and
country
specific
efforts
Develop-
ment of
NHA
methods
• First HA standard; base for
NHA “Producers Guide”;
Disease-based accounts
SHA 2011
SHA 1.0
• Joined Global Standard;
legal framework in EU
• Country studies;
US National Health
Accounts
• System of National
Accounts (SNA); OECD
Health Data
Who
pays?
What
services?
Who
provides
?
Framework to
measure health
spending and
financing
History:

3. SHA 2011 Framework
Current
Health
Spending
Consumer health
interface
Financing interface Provision interface
Functions ICHA-HC
Financing schemes ICHA-HF Providers ICHA-HP
Characteristics of beneficiaries
(Disease, age, gender, income, etc.)
Financing Agents ICHA-FA
Revenues of Financing Schemes ICHA - FS
Factors of Provision ICHA-FP
External trade
Gross capital formation
non-health expenditure
Health-related
expenditure
Current health
spending
MOH
Boundary definition

4. PURPOSES OF HEALTH
ACCOUNTS
4

5. Health accounts sits at the centre of health
system analysis
Health Accounts
Quality of
services
Accessibility
Equity of
utilisation
Efficiency of the
system
Transparency
and
accountability
Innovation
Health
Equity in health
Financial risk
protection
Responsiveness
Governance
stewardship
Resource
generation
human, physical,
and knowledge
Financing
collecting,
pooling and
purchasing
Service delivery
personal and
population-based
Health system
functions
Instrumental
objectives
Ultimate
objectives
Health
care
Consumption
Financing Provision
Source: SHA 2011

6. The main purposes of SHA
To define harmonised boundaries of
health care for tracking expenditure on
consumption
HEALTH CARE
Prevention
and Public
Health
Long-term
Care
Medical
goods
Outpatient
care
Inpatient care
To provide a framework of
the main aggregates
relevant to international
comparisons of health
expenditures and health
systems analysis
Administration
To provide a tool,
expandable by individual
countries, which can
produce useful data in the
monitoring and analysis of
the health system

7. Assuring internationally comparable data
Source: OECD Health Statistics 2015
16.4
11.1
11.1
11.0
11.0
10.9
10.4
10.2
10.2
10.2
10.1
9.9
9.5
9.2
9.1
9.1
8.9
8.9
8.9
8.8
8.8
8.8
8.7
8.7
8.6
8.5
8.1
7.6
7.5
7.4
7.3
7.1
6.9
6.8
6.6
6.5
6.4
6.2
6.1
6.0
5.6
5.3
5.1
4.0
2.9
0
2
4
6
8
10
12
14
16
18
% GDP Public Private
21
19 18 18 18
16 16 16 15 15 15 15 14 13 13 12 12 12 12 12 12 12 11 11 10 10 10 9
6
22
17
16
14 13
11
9
8
0
5
10
15
20
25
% total government expenditure

8. 16 January 2000
TONY BLAIR: ...then at the end of that five
years we will be in a position where our
Health Service spending comes up to
the average of the European Union, it’s
too low at the moment so we’ll bring it up to
there.
DAVID FROST: Bring it up to there by when?
TONY BLAIR: At the end of that five year
period, in other words if…
DAVID FROST: Five years from today not five
years from the next election, five years
from…
TONY BLAIR: No five years from the end of
this financial year,...
Simple comparisons of aggregates
used for benchmarking!
United
Kingdom
EU-15
5
5.5
6
6.5
7
7.5
2000 2001 2002 2003 2004 2005 2006 2007 2008
Public spending on health (%of GDP)

9. Health Spending Analysis:
OECD average as a starting point for comparative analysis to show
the trend in health spending
-1%
0%
1%
2%
3%
4%
5%
6%
2001 2004 2007 2010 2013
OECD OECD (EU) OECD (non-EU)
Average annual growth in total health expenditure per capita, in real terms,
2001 to 2013
Source: OECD Health Statistics 2015

10. Average OECD health expenditure growth
rates in real terms
Health Spending Analysis:
Country level data point to large variations across OECD countries
and direction for further investigation
5.4
-0.4
5.3
1.3
3.5
0.5
3.4
0.4
3.2
5.4
3.6
3.5
6.7
3.2
3.4
11.3
4.1
-2.3
1.5
2.2
1.7
5.0
1.9
1.7
2.3
3.3
1.7
2.9
2.8
8.4
1.3
1.9
3.2
9.0
5.9
-7.2
-4.3
-4.0
-3.0
-1.7
-1.6
-0.8
-0.4
-0.3
-0.2
-0.1
0.3
0.3
0.5
0.6
0.6
0.6
0.8
0.9
1.0
1.0
1.2
1.2
1.3
1.5
1.7
1.7
2.0
2.0
2.3
2.5
3.6
3.9
5.4
6.4
-10
-5
0
5
10
15
2005-2009 2009-2013
Source: OECD Health Statistics 2015

11. Health Spending Analysis: Breaking spending down by
components can start to tell a story
Average growth by main function per capita, OECD
average, 2005-2013, in real terms
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
Inpatient care Outpatient care Long-term care Pharmaceuticals Prevention Administration
2005-09 2009-13
Source: OECD Health Statistics 2015

12. SHA plays key role in monitoring financial sustainabilityUSA
GREECE
CAN
IRELAND
FRA
BEL
DEU
JPN
ITA
ESP
PRT
AUT
AUS
CHE
SVK
SWE
ISL
HUN
FIN
SVN
LUX
NOR
KOR
GBR
CZE
DNK
POL
NZL
EST
MEX
200
400
600
800
Per capita spending in USD PPP, 2007

13. Health spending analysis:
Evaluation of reforms and impact of governance changes
Average per capita inpatient expenditure growth rates (in real terms), OECD average, 2005-2011
0 1 2 3 4 5 6
General government/
Social security
Private out-of-pocket
Private insurance
2005-07 2007-09 2009-11 2011-13
In %
Source: OECD Health Statistics 2015

14. Health spending analysis:
Explaining factors that differentiate the level of health
spending
0.53
0.60
0.57
0.47
0.53
0.81
0.70
0.67
0.64
0.54
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Germany Switzerland Netherlands France Canada
Adjusted for
differences in
economy-wide
price levels
Adjusted for
differences in
health sector
price levels
United States
Comparison of per capita health expenditure estimated using general price levels
and health-specific price levels (United States=1), 2011
OECD analysis on
comparative price levels in
health suggests prices rather
than volumes contribute to
high US spending.
because of…
Intense use of health-related
technologies, low productivity,
decentralised price
negotiations, fragmentation in
the insurance market, high
level of provider concentration
and weak price control

15. Application of Health Accounts – spending
by disease
0 10 20
Circulatory
Digestive
Mental health
Musculoskeletal
Nervous system
Cancer
Endocrine
Respiratory
Symptoms
Injuries
Genitourinary
Otherfactors
Infectious
Skin
Pregnancy
Congenital
Blood
Perinatal
External
GERMANY, 2008
0 10 20
Circulatory
Digestive
Respiratory
Cancer
Musculoskeletal
Nervous system
Injuries
Infectious
Mental health
Genitourinary
Endocrine
Skin
Symptoms
Otherfactors
Pregnancy
Blood
Congenital
Perinatal
KOREA, 2009 NETHERLANDS, 2011
0 10 20
Mental health
Not allocated
Circulatory
Digestive
Musculoskeletal
Nervous system
Cancer
Symptoms
Respiratory
Genitourinary
Endocrine
Injuries
Pregnancy
Skin
Infectious
Blood
Congenital
Perinatal
Source: OECD Exp. by Disease, Age and Gender Database.

16. Application of Health Accounts –
forecasting, sustainability & equity
OECD comparative
studies linking financing
data from SHA with
utilisation data to
measure inequalities
Using Public Health Spending
Data as a starting point to
project spending growth

17. SHA 2011: A FOCUS ON
FINANCING
17

18. The SHA 2011 Financing Framework
Financing
agent
(FA)
Financing
agent
(FA)
Institutional units of
the economy
providing revenues
Financing
agent
(FA)
Providers
(HP)
Functions
(HC)
Financing
scheme
(HF)
Financing
scheme
(HF)
Basic structuralrelationships
of health financing
Moneyflow
• refined framework to
mirror the evolution in
financing and align with
the financing functions
of collection, pooling and
purchasing
• Financing schemes and
related financing agents
• The basic flows: (i)
revenue-raising and (ii)
allocation of resources

19. Health Care Financing: Main Questions SHA
2011 can help to answer
• How is financing in a country’s health care sector structured and
how is it managed?
• How does a particular health financing scheme collect its revenues?
• What is the extent of external funding?
• Where does the money go?
• How are the particular health care services or goods financed?
• What share of the spending on inpatient care is covered by out-of-
pocket (OOP) payments?
• How are the resources of the different financing schemes allocated
among the different groups of beneficiaries, such as by disease?

20. Revised classification of schemes and a
focus on revenues
Classification of financing schemes (HF)
HF.1
Government schemes and compul.
contrib. health care financing schemes
HF.1.1 Government schemes
HF.1.2
Compul. contrib. health insurance
schemes
HF.1.2.1 Social health insurance
HF.1.2.2 Compulsory private insurance
HF.2 Voluntary health care payment schemes
HF.2.1 Voluntary health insurance schemes
HF.2.2 NPISH financing schemes
HF.2.3 Enterprise financing schemes
HF.3 Household out-of-pocket payment
HF.4 Rest of the world financing schemes
Classification of revenues of financing
schemes (FS)
FS.1 Transfers from government domestic revenue
FS.1.2 … on behalf of specific groups
FS.1.3 Subsidies
FS.2
Transfers distributed by government from
foreign origin
FS.3 Social insurance contributions
FS.3.1 ... from employees
FS.3.2 ...from employers
FS.3.3 ...from self-employed
FS.4 Compulsory prepayment (other than FS.3)
FS.5 Voluntary prepayment
FS.6 Other domestic revenues n.e.c.
FS.7 Direct foreign transfers

21. New Framework sheds better light on
government involvement

22. Tracking revenues: Policy relevance
0%
25%
50%
75%
100%
Other Soc. Ins. Contributions Govt. Transfers
•Track diversification of revenue
sources for health financing e.g.
away from payroll-based
contributions in the face of
changing demographics
•Refine definitions and
improve overall country
coverage to feed work on fiscal
sustainability and expenditure
forecasting
•Measure the full burden of
government spending on health
taking into account subsidies
and transfers to other financing
schemes
0
10
20
30
40
50
60
2000 2002 2004 2006 2008 2010 2012 2014
trillions Revenues Expenditures

23. NHA can help assessing health system
performance
• Transparency and accountability - Where does the money come
from, who manages it and what is it used for ?
• Financial risk protection – levels of out-of-pocket spending /pre-
payments
• Accessibility and equity – by beneficiary characteristics with
other non-expenditure data (e.g. Utilisation)
• Efficiency – by function with data on activities, outcomes.
But:
• NHA not an end in itself but should follow country priorities
• Insufficient on their own to assess programme interventions
• Cannot answer questions it is not designed to accommodate
Problems with budget process, formulation, execution?
 other instruments: PER, PETS

24. What information can health accounts provide?
• Internationally comparable data on the overall level and growth and
composition of spending on health care
– International benchmarking
– Compare and relate spending with priorities
• Deeper analytic possibilities of
– how services are financed and provided
– Factors that drive growth in health spending
– Financial sustainability (for schemes & health system)
– tracking of domestic and external sources of financing
– Evaluation of reforms and impact of governance changes
– Achievement of Universal Health Coverage on regional level
• SHA 2011 is intended as a reference guide and a flexible toolkit
 priorities and policy uses can differ and should be up to countries

25. Contact: michael.mueller@oecd.org
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Website: www.oecd.org/health
Newsletter: http://www.oecd.org/health/update
Thank you