10th NBSOECD workshop on national accounts

1
Towards a better measure ofnon market output

• The OECD non market project
• Report of the joint OECD/UK/Norway workshop
• (London, October, 3-5, 2006)

2
The 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. Next workshop in Paris, 7-8
  June 2007.
• Possibility of a  transatlantic gap  the US
  and Canada still apply input measures. Impact of
  0.25 of GDP growth/year ?

3
The 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.  

4
The 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
5
The 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
6
The London workshop 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. Model of class size.
• NA can only be one-dimensional

7
The London workshop education for PPP
Proposal of an output deduced from outcome
indicators.
8
Education draft framework for PPP (M NM)
9
Proposals (complaints) of DHfor 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 Quality-Adjusted
  Life years) instead of cost weights.
• Use of mortality rates and waiting times.
• Use of  value weight  for statins prevention
  better than curative care.
• Patient experience.
• Nothing in British NA yet. DRGs not fully
  convenient.

10
New Paris Health accounts meeting,6th of
October, 2006

•  Cost of illness  has been compared among a
  dozen of European countries, and Eurostat finds
  the results homogeneous and plausible. Diseases
  1st, providers 2nd.
•  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
  alternative framework (no methodology yet).
• But few data on QALY (main idea for quality
  adjustment).

11
Possible 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)
• Definitions, principles, terminology
• Review of (best) stratification and quantity
  indicators
• Review of best quality indicators
• Verification of consistency between market and
  non-market methods
• Temporal formulas
• Spatial framework and formulas
• Suggestions for further developments
• For September 2007