Measuring Health System Efficiency in Canada

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Measuring Health System Efficiency in Canada Multi-phased project Phase I Katerina Gapanenko April 17, 2012 1

The increased cost of health is a great concern 250 200 150 100 50 Health Care spendings in Canada 0 1975 1981 1987 1993 1999 2005 2011 Actual Spending Inflation-Adjusted Spending ($1997) Source National Health Expenditure Database, CIHI. 2

The increased cost of health is a great concern Total Health Expenditure per Capita (Source: OECD Health Data, 2011) 3

Health expenditure per capita varies $8,996 $11,929 $5,450 $5,261 $6,884 $6,570 $5,792 Total Health Expenditure per Capita, in current dollars, 2011 forecasted Source: National Health Expenditure Trends 1975-2011, CIHI 4

Are we getting the most out of our health system dollars? 5

Previous Studies 6

Project Big Picture Defining a model Enhancing the model Testing the model Working with DMUs 7

Common Approaches to Measuring Efficiency System-level approach Sub-sector approach Disease-based approach 8

Common Steps Inputs Outputs Estimating efficiency of DMUs efficiency scores Factors that might be associated with score variation Regression Analysis Correlations 9

Model Components DMU DMU DMU Methods of measurement DMU Health System System Objectives 10

Stakeholders Contribution to Defining System Objectives Someone on behalf of society has to decide what objectives ought to be pursued. That is rarely a role for analysts or researchers rather, it is the legitimate role of politicians. In developing a performance model, an important requirement is to seek out a clear political statement on what is valued from legitimate stakeholders. Smith and Street, 2009 11

Research Methods Literature reviews Broad theoretical literature review Review of applied studies Qualitative studies Stakeholder interviews (CHEPA, McMaster) o 17 senior health system officials from 9 provinces & 2 territories Stakeholder dialogue (McMaster Health Forum) o 16 health system decision-makers from 6 provincial, 1 territorial and federal governments Review of jurisdictional documents Data reviews Statistics Canada CIHI 12

Model Components What is the system objective? & How can we measure it? 13

System Objective: To produce more services? 14

To improve overall population health? 15

To improve health services to people in need? 16

System Objectives Premature mortality Avoidable mortality Preventable mortality Treatable mortality 17

Model Components Throughputs (wait times) Health System System Objectives 18

Throughputs (wait times) 19

Inputs Cost of hospitals Cost of other institutions Cost of physicians Cost of nurses Cost of other health professionals Inflow/outflow rate Public health expenditures Drugs public expenditure 20

Environmental Factors Population density Unemployment rate Average income % of people over 65 % of Aboriginals % of immigrants Income inequality (GINI) Gender distribution 21

Lifestyle Factors Proportion of smokers Obesity rate Physical activity Fruit & vegetable consumption Alcohol consumption 22

Throughputs (for regression analyses) Health Inequalities Concentration Indices for self-reported Access to family physicians Visits to GP and specialists Hospitalization Health status Performance Indicators 30-day AMI or stroke in-hospital mortality Readmission for AMI, asthma, mental illness and other diseases Wait time for certain procedures 23

Model Components DMU DMU DMU DMU Methods of measurement Health System System Objectives 24

DMUs Health regions Policy creation Authority for use of resources Intra- and inter provincial/territorial better performers ~ 140 health regions versus 13 provinces/territories 25

Methods of estimating efficiency Key Differences DEA SFA Sensitivity to extreme observations Assumption that some DMUs are 100% efficient Both methods High Present Low Absent Sensitivity to underperformers None High Separation of random error from inefficiency Assumptions about functional form and error distribution Impossible None Possible Strong Many system outcomes Yes No Impact of the sample size Moderate Strong 26

Model Inputs Cost of hospitals Cost of other institutions Cost of physicians Cost of nurses Cost of other health professionals Inflow/outflow rate Public health expenditures Drugs expenditure SFA & DEA efficiency scores DMU DMU DMU Outcomes Premature mortality Preventable mortality Treatable mortality Avoidable mortality DMU DMU DMU Env. Factors Population density Unemployment rate Average income % of people over 65 % of Aboriginals % of immigrants Income inequality (GINI) Gender distribution Lifestyle Factors Proportion of smokers Obesity rate Physical activity Fruit & vegetable consumption Alcohol consumption

Regression analysis efficiency scores Regression Analysis Correlations Lifestyle factors Proportion of smokers Obesity rate Physical activity Fruit and vegetable consumption Alcohol consumption Health Inequalities Concentration Indices for self-reported Access to family physicians Visits to GP and specialists Hospitalization Health status Performance Indicators 30-day AMI or stroke in-hospital mortality Readmission for AMI, asthma, mental illness and other diseases Wait time for certain procedures 28

Challenges & Limitations Missing data Lack of real-time data Variations in responsibilities among health regions Information challenges Model acceptance challenges 29

Next Steps Defining a model Enhancing the model Testing the model Working with DMUs 30

Acknowledgment Dr. Michel Grignon Dr. Sara Allin Alexey Dudevich Jean Harvey Dr. Jeremy Veillard 31

Thank you 32