Transcript PRODUCTIVITY AND COSTS IN THE SYSTEM OF HEALTH CARE

PRODUCTIVITY AND
COSTS IN THE SYSTEM
OF HEALTH CARE
Cost Identification Analysis
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The first type of analysis we will
consider is cost identification.
Generally speaking, cost identification
studies measure the total cost of a
given medical condition or type of
health behavior on the overall economy.
The total cost imposed on society by a
medical condition or a health behavior
can be broken down into three major
components:
Direct medical care costs
Direct nonmedical costs
Indirect costs
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Direct medical care costs
encompass all costs incurred by
medical care providers, such as
hospitals, physicians, and nursing
homes. They include such costs as
the cost of all necessary medical
tests and examinations, the cost of
administering medical care, and the
cost of any follow-up treatments.
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Direct nonmedical costs represent all
monetary costs imposed on any
nonmedical care personnel, including
patients. For the patient, direct nonmedical
costs include the cost of transportation to
and from the medical care provider, in
addition to any other costs borne directly
by the patient.
For example, the patient may require home
care or have specific dietary restrictions.
Others may also be influenced by the
treatment.
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Indirect costs consist primarily of the time
costs associated with implementation of
the treatment.
Indirect costs include the opportunity cost
of the patient’s (or anyone else’s) time that
the program affects, especially because
many health behaviors and medical
conditions result in lost productivity due to
injury, disability, or loss of life. Consider the
substance abuse program previously
discussed.
Costs should reflect the opportunity costs
of the time needed to educate workers
about the potential dangers of substance
abuse. The time cost is borne by the
employer and equals the value of forgone
production.
Uses of Medical Funds
Uses of Medical Funds
the data in the figure show that great strides have been taken
in terms of more people insured in the United States.
A Note on the Relation between System
Structure and Performance
Health care is extremely labour-intensive, perhaps
more than any other public sector activity. With more
than six million workers, health and welfare constitute
one of the most significant sectors of the economy in
the EU, providing employment for 9.7% of the EU
workforce (European Commission 2002). While health
care consumes between 7% and 11% of the gross
domestic product (GDP) in western European
countries, approximately 70% of health budgets are
allocated to salaries and other charges related directly
to employment. In CEE and the NIS of the former
USSR the health sector has an even greater role in
employment due to the relative underinvestment in
capital, resulting in a labour-intensive model of service
delivery.
Approaches to analysing future trends
Medical Care Quality
Mapping the future of HRH in Europe: analysing the
factors affecting the health care workforce
While the different approaches to analysing trends in
health and HRH explored in the previous section may
contribute usefully to exploring future trends in Europe,
it is clear that no single discipline can address all
aspects of human resources using these three
perspectives simultaneously. Instead, a
multidisciplinary approach is required to examine the
full array of forces affecting HRH and to gain insights
about how and why they are changing.
Amount of Medical Care Spending
A framework for analysing future trends in HRH
Demographic trends
Demographic trends pose one of the
most fundamental challenges to
optimizing HRH, shaping the future health
labour market directly, by impacting on
the supply and composition of the health
care workforce, and indirectly, by
influencing the demand for products and
services.
the data in the figure show that great strides have been taken
in terms of more people insured in the United States.
Direct effects
Across Europe, the ageing of populations - a consequence of
persistently low fertility rates coupled with substantial gains in life
expectancy - has emerged as a critical policy issue with important
implications for both the nature of health care and the workforce
that will provide it. The United Nations predicts that the population
of Europe (including the Russian Federation) will fall from 726
million in 2003 to 696 million in 2025, resulting in a decline of the
European share of the world's population from 11.5% to 9%
(United Nations 2003). Within the 15 countries belonging to the EU
before May 2004, the average age of the population is predicted to
rise from 38.3 years in 1995 to 41.8 in 2015, with consequences
for the available labour force. Thus, the working-age population,
which increased consistently until the early 1990s, is estimated to
decline over the next 25 years (European Commission 2000).
Trends in the share of the female workforce as a percentage of the total
health workforce in selected countries in the 1990s
Medical Care Quality
Lisbon Strategy set out in 2000, the Stockholm European Council
in 2001 recommended that Member States increase significantly
the number of older people (aged 55-64) remaining in the
workforce and the Barcelona European Council in 2002 proposed
increasing the age of retirement by five years by 2010 (currently it
averages 58 years). Yet, in 2001, the employment rate of older
workers was only 38% in the 15 Member States of the EU pre2004 and 37% in the enlarged EU (European Commission 2002).
This figure is substantially lower in, for example, France, Italy,
Belgium and Luxembourg, mainly because of advantageous earlyretirement schemes that contrast with the lack of employment
opportunities in CEE. In general, there seems to be a trend
towards early retirement. As a result, the length of retirement
compared to the duration of working life has increased in all parts
of Europe. It seems increasingly obvious that any increase in
workforce participation by older workers will thus require
fundamental changes in pension schemes and in employers'
policies on recruitment and retention, including organizational
practices and working conditions.
A Note on the Relation between System
Structure and Performance
Female practising physicians as a percentage of all practising
physicians in selected countries in the 1990s
The TSB curve represents the monetary value of the
total social benefit generated from consuming medical
care. The curve is positively sloped to reflect the added
monetary benefits that come about by consuming more
medical care.
Figure 3-3 provides some average estimates of the PV
of lifetime earnings (including fringe benefits) by age
and gender, discounted using a 3.0 percent discount
rate.
Table 3-1 summarizes the findings for the
scenarios where students contract
meningococcal disease at 2 times and 15
times the national average.
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For example, assume that a new medical
treatment, new, is being compared to an
existing treatment, old, and the cost and
medical effectiveness of each treatment
are C old, C new and E old, E new
respectively.
If the new treatment is less costly than the
old (C new < C old) and more effective ( E
new > E old), then the new treatment is
said to dominate the old and should be
adopted.
An Application of Cost-Effectiveness
Analysis: Autologous Blood Donations –
Are They Cost Effective?
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