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International Journal of Health Economics and Management
Published in: International Journal of Health Economics and Management 4/2017

01-12-2017 | Research Article

Comparisons of hospital output in Canada: national and international perspectives

Authors: Ruolz Ariste, Kam Yu

Published in: International Journal of Health Economics and Management | Issue 4/2017

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Abstract

Current cost-based approach in measuring health care output does not allow decomposition of health care expenditure into price and output components. In this paper we propose an episode-based direction measurement method which closely resembles the concept of output in the system of national accounts. Using data from the Canadian Institute for Health Information, we calculate a quality unadjusted output index of the Canadian hospital sector for the periods 1996–2005. The result shows that total output increases at an average annual growth rate of 1.49%. We expect that with the quality adjustment the actual rate is higher. This is in contrast with the long-held assumption that health care productivity growth is zero. Our results provide key information on the ongoing health care policy debate.
Footnotes
1
See Triplett (1987).
 
2
See Pritchard (2003), Mai (2004), and HMSO (2005).
 
3
See Triplett (1999), Berndt et al. (2000), National Academy of Science (2002) and Mai (2004).
 
5
For reviews see Gold et al. (1996), Brazier et al. (1999), and Garber (2000). For the theoretical foundation see Grossman (1972).
 
6
Some analysts allow \(w_i\) to have negative values, meaning the suffering from an illness is worse than being dead from the patient’s perspective.
 
7
Conceptually, QALY can be viewed as a special case of quality-adjusted life expectancy. That is, if we assume \(\delta = w_i = 1\) for all i, the result is life expectancy of the patient at age A.
 
8
This seems to be the position taken by Wolfson and Lievesley (2007).
 
9
For example, see Lleras-Muney (2005) for the effect of education on mortality rates. For other problems in using QALY as output measurement see Pauly (1999).
 
10
In this study, administration costs from different health expenditure categories have been segregated and summed up to report an overall administration costs.
 
11
Before 1990 categories called bin groups were assigned to the data.
 
12
Diewert (2008) measures productivity changes using a productivity index \(Q/Q^*\) where Q is an output quantity index and \(Q^*\) is an input quantity index. Productivity changes are reflected in the change in the production function over time in producing the same products. Here e reflects the quality changes in the products themselves.
 
13
RIW values or average cost per stay used to set the weights are derived from data that do not include fee-for-service payments to physicians or out-of-pocket expenses.
 
14
See Berndt et al. (2006) on applying this “expert” approach to price indices for mental health care, and Cutler et al. (1998) for heart attack treatments. McDowell (2006) and Brazier et al. (1999) provide extensive reviews on health measuring tools. Also, waiting time for diagnoses and treatments can in principle be incorporated into HALE.
 
15
See Caplan (1998), Pritchard and Powell (2001), and HMSO (2005).
 
16
Quebec is excluded because their inpatient and day surgery data are not reported in the DAD, but in HMDB. The DAD is a more comprehensive database for the application of the CMG methodology. Manitoba is excluded because DAD data for all facilities in the province are available only from 2003 and after. Alberta is excluded because their day surgery data are not reported in the DAD or in NACRS.
 
17
The data source for hospital expenditure is CIHI (2007).
 
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Metadata
Title
Comparisons of hospital output in Canada: national and international perspectives
Authors
Ruolz Ariste
Kam Yu
Publication date
01-12-2017
Publisher
Springer US
Published in
International Journal of Health Economics and Management / Issue 4/2017
Print ISSN: 2199-9023
Electronic ISSN: 2199-9031
DOI
https://doi.org/10.1007/s10754-017-9217-9

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