Frequently asked questions
Household
Should ‘user charges’ at government facilities be included?
(See PG 10.15) User charges at government facilities definitely should be included in the accounts to the extent that they support and maintain health facilities or programmes. The question is which entity to credit as the financing agent. In many countries, user charges for health services delivered by publicly funded health facilities are retained by the facility concerned or considered part of that facility’s budget (for example, most cost recovery programmes implemented in Africa and in Latin America in the 1980s and 1990s). In other countries, the fees are returned to the central ministry and are included in that budget. Regardless of the arrangement, where the fees have been paid by consumers in return for delivery of services, the household is the appropriate financing agent (for the amount of the fees). Expenditures by government as a financing agent should be net of those fees.
For example, suppose that the ministry of health operates a hospital at a cost of 2500, and that the hospital collects 150 in user charges from households. In the accounts, households would be the financing agent for 150 and the ministry of health would be the financing agent for 2350, for a total of 2500. If user fees are returned to the ministry of health, the ministry’s books will show a figure of 2500; it is essential that the user charges not be included in the ministry’s outlays in order to avoid double counting those expenditures. However, if the fees are retained as additional resources by providers, i.e. they supplement ministry of health spending, the ministry’s books will show a figure of 2350 and the user charges do not need to be subtracted from the ministry total.
How are “taxes earmarked for social security" accounted for?
(See PG 11.14) In the NHA, taxes that are earmarked for social security are allocated to the source groups that paid them. Employers are the source of the taxes they pay, and households are the source of taxes paid by employees. The reason for this treatment is that such taxes are in essence a form of premium, and should be treated in the same way as premiums paid to private social insurance or voluntary medical insurance. Taxes used to support other government health care programmes are counted as general revenue, which is attributed to government as a source.
Is household production of health care a part of NHA?
(See PG 12.22) Unpaid family care is not considered to be part of national health expenditure. Households and families provide a lot of inputs to health care, through their uncompensated time and effort. For example, family members take time to care for the sick at home or to stay with them in hospital. In keeping with the current practice in the system of national accounts, the value of such uncompensated activities and non-monetary inputs is not counted as health expenditure in NHA. These inputs may be very significant, as in the case of home-based care for people living with HIV/AIDS. The value of these activities can be estimated, but it is not part of the total used for comparison of health expenditure with other economic aggregates or for international comparison of health spending.
Which deflator is most commonly used by countries?
In theory, the choice of deflator to be used to compare expenditure amounts over time depends on the nature of the question that the analysis seeks to illuminate. For example, if one were interested in tracking changes in the volume of household purchases of over-the-counter (OTC, or non-prescription) medications, then a price index or deflator specific for OTC products would be most appropriate. However, if the interest were in tracking changes in national health spending relative to purchasing power in the whole economy, the GDP deflator would be most appropriate.
In practice, usage differs from country to country. Probably, the GDP deflator is most commonly used; most middle- and lower-income countries do not have a very reliable health price index. In Health at a Glance 2003 (published by the OECD), due to limited availability of reliable health price indices, an economy-wide (GDP) price index was used in order to compare growth rates of OECD countries over time and across countries. (It should be noted that the limitation of this methods was also emphasized in the publication.)
The practice of OECD countries varies. For example, Canada calculates “constant dollar expenditure” using price indices for public and private expenditure separately. Implicit price indices (IPI) for government current expenditure are used to deflate public sector health spending, and the health component of the Consumer Price Index (CPI) are used to deflate private sector health care spending. Adjusted values of public and private expenditure are summed to obtain Canada totals at constant dollar values.
Statistics Norway developed a method for calculating volume indices (volume indices for inpatient care were calculated based on DRGs, and for out-patient care based on number of visits by specialists); and constant price values of health care and price indices were calculated by using volume indexes.
Statistics Netherlands creates an average price for the goods and services offered for every actor in the health care system (as much as possible in accordance with new EU regulations on price deflation, which means output oriented). Expenditure in real prices (measurement of quantity) is derived from this price level. A “quantity produced” measure is created In case of government providers, and the "price" for the goods and services is derived from this. In case no information on prices or quantities is available or cannot be derived in a reliable way, the CPI is used as a general deflator for the actor in question.
Kenya is a developing country example in which the health component of the CPI has been used to deflate out of pocket expenditures for purchase of services at traditional healers.
In summary, there is no clear answer to this question. Which set of measures to use depends upon the nature of the question asked and the types of price or quantity information available. Health accountants are encouraged to seek guidance from economic statistics authorities in the country on the most appropriate and reliable measure.
What should be used at the municipal level to estimate health expenditures as a share of total municipal expenditures?
Health expenditures encompass those activities whose primary intent is to restore maintain and restore health (PG 3.02 and 3.03). Any and all of the health and health-related functions described in the SHA framework can be carried out or financed at municipal level and should be included. At the conceptual level one must decide which activities to include; the PG offers some guidance (see PG 3.06-3.11), but ultimately the decision falls upon the judgment of the health accounts team and their advisors.
The practical problem is that delivery and financing of health activities may be intermingled with non-health activities. Typically this is a problem common to all types of actors in the health system but especially troublesome at the municipal level. Specific advice is hard to give here, as the best solution varies according to the type of data and information available to the health accounts team. Typically some form of judgment is needed; in some cases, one may be able to use time and motion studies or other similar analysis (see PG 13.21-13.26), or the informed judgment of key staff familiar with the programmes in question.
The choice of denominator in the ratio of health expenditure as a share of total municipal expenditure depends upon what message is to be conveyed. A municipal equivalent to GDP is not necessarily meaningful even where it is available. One might try to develop regional GDP estimates using proxy or key measures such as wages to prorate national GDP, or use data from a household survey to develop regional shares of total national household consumption. However, these measures remain at best a crude approximation of regional/municipal domestic product.
However, if the analytic question is more focused there may be a better measure available. For example, if one wants to know how health rates as a municipal priority, one could construct a ratio of municipal public health expenditures to total municipal government revenues or expenditures, and compare the ratio across municipalities or against the national average. Similarly, one could compare household out-of-pocket spending to total household spending at the subnational level and compare this ratio across municipalities and against the national figure. In other words, by restricting the analysis to a particular group of actors one may be able to find a valid and reliable denominator that reflects the total resources available to those actors.
Mexico has done some interesting analysis looking at per capita expenditures on health by state, compared to an index of health status for each state. This analysis is useful for assessing health expenditures relative to need and was used by the Ministry of Health to guide transfers from the central level to various states.
Why does my NHA show different figures for household spending than does the household survey?
There may be several answers to this question. First, the definition of what comprises household spending may differ between the household survey and the national health accounts. Often a household survey will try to measure all outlays by households for health care. Thus “household spending” in the survey most closely matches “household funds” (FS.2.2) in the financing sources dimension. But category FS2.2 includes payroll deductions for health care (FS.2.2xHF.1.2 or FS.2.2xHF.2.1) in addition to cash payments made by households. The cash payments include copayments and purchases of noninsured services (FS.2.2xHF.2.3) plus cash purchase of insurance premiums (FS.2.2xHF.2.1 or FS.2.2xHF.2.2). Thus, no single category from the health accounts exactly matches what is being called “household spending for health” in the household survey.
Another possible answer is that the household survey was not used for all of the pieces of household spending for health in the NHA. For example, social insurance premium figures may have been taken from the Insurance agencies, or other types of substitutions may have been made (See PG paras 10.13 and 11.32 for a discussion and example of this).
Finally, it is possible that the household survey includes types of spending that are outside the boundaries of the health accounts. Perhaps the survey includes an estimate of informal transportation costs and the NHA has been defined to exclude this type of expenditure.
Where should I include user fees paid to public facilities?
What people pay at public facilities is part of household activity as a financing agent. Therefore, these copayments appear in the NHA as FS.2.2xHF2.3, not as FS.2.2xHF.1.1 or FS.2.2xHF.1.2 (see PG pages 36 and 42 and paragraph 10.15).
User charges at government facilities definitely should be included in the accounts to the extent that they support and maintain health facilities or programmes. The question is which entity to credit as the financing agent. In many countries, user charges for health services delivered by publicly funded health facilities are retained by the facility concerned or considered part of that facility's budget (for example, most cost recovery programmes implemented in Africa and in Latin America in the 1980s and 1990s). In other countries, the fees are returned to the central ministry and are included in that budget. Regardless of the arrangement, where the fees have been paid by consumers in return for delivery of services, the household is the appropriate financing agent (for the amount of the fees). Expenditures by government as a financing agent should be net of those fees. For example, suppose that the ministry of health operates a hospital at a cost of 2500, and that the hospital collects 150 in user charges from households. In the accounts, households would be the financing agent for 150 and the ministry of health would be the financing agent for 2350, for a total of 2500. If user fees are returned to the ministry of health, the ministry's books will show a figure of 2500; it is essential that the user charges not be included in the ministry's outlays in order to avoid double counting those expenditures. However, if the fees are retained as additional resources by providers, i.e. they supplement ministry of health spending, the ministry's books will show a figure of 2350 and the user charges do not need to be subtracted from the ministry total.