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The Measurement of Output and Productivity in the Health Care Sector in Canada: An Overview

Author

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  • Andrew Sharpe

    ()

  • Celeste Bradley
  • Hans Messinger

Abstract

To achieve efficient allocation of resources in the health care sector, accurate measures of health care output and productivity are essential. According to official estimates of productivity produced by Statistics Canada, labour productivity in the business sector of the health care (excluding hospitals) and social assistance industry declined 0.28 per cent per year between 1994 and 2003. Estimates of productivity produced by the CSLS, based on official Statistics Canada employment and real GDP figures, show that labour productivity in the health care and social assistance industry declined by 0.69 per cent per year between 1987 and 2006. It is widely recognized that official output and productivity figures may seriously underestimate the true contribution of the health care sector to real output, and more importantly to the economic well-being of Canadians. Alternative approaches show that price indices for health care output may be overestimated and, therefore, quality improvements may not be accurately captured by estimates of real health care output. More resources are needed to further investigate the alternative approaches discussed in this report and develop better output measures that adjust for outcomes directly related to health care spending.

Suggested Citation

  • Andrew Sharpe & Celeste Bradley & Hans Messinger, 2007. "The Measurement of Output and Productivity in the Health Care Sector in Canada: An Overview," CSLS Research Reports 2007-06, Centre for the Study of Living Standards.
  • Handle: RePEc:sls:resrep:0706
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    File URL: http://www.csls.ca/reports/csls2007-06.pdf
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    References listed on IDEAS

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    1. Soeren Mattke & Edward Kelley & Peter Scherer & Jeremy Hurst & Maria Luisa Gil Lapetra & HCQI Expert Group Members, 2006. "Health Care Quality Indicators Project: Initial Indicators Report," OECD Health Working Papers 22, OECD Publishing.
    2. David M. Cutler & Mark B. McClellan & Joseph P. Newhouse & Dahlia K. Remler, 2001. "Pricing Heart Attack Treatments," NBER Chapters,in: Medical Care Output and Productivity, pages 305-362 National Bureau of Economic Research, Inc.
    3. Ernst R. Berndt & David M. Cutler & Richard Frank & Zvi Griliches & Joseph P. Newhouse & Jack E. Triplett, 2001. "Price Indexes for Medical Care Goods and Services -- An Overview of Measurement Issues," NBER Chapters,in: Medical Care Output and Productivity, pages 141-200 National Bureau of Economic Research, Inc.
    4. Arthur Sensenig & Ernest Wilcox, 2001. "National Health Accounts/National Income and Product Accounts Reconciliation -- Hospital Care and Physician Services," NBER Chapters,in: Medical Care Output and Productivity, pages 271-302 National Bureau of Economic Research, Inc.
    5. David M. Cutler & Ernst R. Berndt, 2001. "Medical Care Output and Productivity," NBER Books, National Bureau of Economic Research, Inc, number cutl01-1, January.
    6. Dennis Fixler & Mitchell Ginsburg, 2001. "Health Care Output and Prices in the Producer Price Index," NBER Chapters,in: Medical Care Output and Productivity, pages 221-270 National Bureau of Economic Research, Inc.
    7. repec:nsr:niesrd:264 is not listed on IDEAS
    8. Peter J. Nicholson, 2003. "The Growth Story: Canada's Long-run Economic Performance and Prospects," International Productivity Monitor, Centre for the Study of Living Standards, vol. 7, pages 3-23, Fall.
    9. Mary O'Mahony & Lucy Stokes, 2005. "Developing new approaches to measuring NHS outputs and productivity," National Institute of Economic and Social Research (NIESR) Discussion Papers 264, National Institute of Economic and Social Research.
    10. David M. Cutler & Mark McClellan & Joseph P. Newhouse & Dahlia Remler, 1996. "Are Medical Prices Declining?," NBER Working Papers 5750, National Bureau of Economic Research, Inc.
    11. Kevin M. Murphy & Robert H. Topel, 2007. "Social Value and the Speed of Innovation," American Economic Review, American Economic Association, vol. 97(2), pages 433-437, May.
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    Citations

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    Cited by:

    1. David A. Dodge & Richard Dion, 2011. "Chronic Healthcare Spending Disease: A Macro Diagnosis and Prognosis," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 327, April.
    2. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.

    More about this item

    Keywords

    Health sector; Productivity; Measurement; Canada; Outcomes.;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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