1.1 National health accounts framework and contents

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Preface

National health accounts are an internationally accepted tool for collecting, cataloguing and estimating financial flows through the health system regardless of the origin or destination of funds. National health accounts provide the necessary information to improve health system performance. To date, national health accounts have been conducted in more than 60 middle‐income and low‐income countries.

In The World Health Report 2000, the concept of health system performance was expanded to include explicit goals, such as protection of the population from financial risk and equity in health and financing. Information on financing of the health system is an essential input for strengthening policies to improve health financing and its sub‐components: collection, pooling and purchasing.

The Guide to producing national health accounts¹, published by WHO in collaboration with the World Bank and the United States Agency for International Development in June 2003, offers a comprehensive methodology to producing national health accounts. This short version of the guide presents the principles for producing national health accounts. It is intended for those who are new to national health accounts and who are interested in gaining a basic understanding of the concept in order to be able to initiate the process of producing national health accounts.

This short version follows the same outline as the full guide and thus for a further in‐

depth presentation of the various issues, the corresponding chapter of Guide to producing national health accounts can be consulted.

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Acknowledgements

This guide is substantially based on Guide to producing national health accounts. It was prepared by Hossein Salehi and Osmat Azzam. It greatly benefited from directions provided by Belgacem Sabri, and comments by Patricia Hernandez, Zeinden El Idrissi, and Manjiri Bhawalkar and Kim Gustavsen. The guide also benefited from suggestions made by participants who attended different NHA training workshops in Eastern Mediterranean Region over the past two years.

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1. Introduction

1.1 National health accounts framework and contents

National health accounts (NHA) are a powerful tool designed to:

1. estimate the amount and characteristics of health spending;

2. improve the capacity of decision‐makers to identify health system problems and opportunities for change and to develop and monitor reform strategies.

NHA are a globally accepted tool for measuring total public and private national health expenditures. Formatted as a standard set of tables, NHA organize, tabulate and present the various aspects of a nation’s health expenditures. This format is one that can be easily understood and interpreted by all policy‐makers. It measures the

“financial pulse” of national health systems, by answering questions such as the following.

• How are resources mobilized and managed for the health system?

• Who pays and how much is paid for health care?

• Who provides goods and services, and what resources do they use?

• How are health care funds distributed across the different services, interventions and activities that the health system produces?

• Who benefits from health care expenditure?

The NHA framework is thus a way to organize, tabulate and present health system expenditure information. It provides an analytical framework consisting of three essential elements. First, it requires the calculation and presentation of national estimates through a “sources and uses matrix”. Second, it allows for extensive disaggregating of the sources of spending beyond the general categories of “public”

and “private”. Third, it provides a systematic framework for defining uses according to several important classifications.

Although NHA have been proved to be a useful way to organize and present financial information about the health system, they are not the answer to all health policy questions. Health accounts focus on the financial dimension of the health system, and NHA data cover health expenditure. The health accounts themselves do not distinguish between effective and ineffective expenditures. To answer many

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A short guide to producing national health accounts

sources such as epidemiological studies, population surveys and the like.

International experience in the development and use of health accounts suggests a number of useful dimensions for consideration. Some dimensions are particularly suited to assisting in the estimation of total spending. Others are particularly suited to evaluating or formulating health policy. These dimensions are:

• financing sources: institutions or entities that provide the funds used in the system by financing agents;

• financing agents: institutions or entities that channel the funds provided by financing sources and use those funds to pay for, or purchase, the activities inside the health accounts boundary;

• providers: entities that receive money in exchange for or in anticipation of producing the activities inside the health accounts boundary;

• functions: the types of goods and services provided and activities performed within the health accounts boundary;

• resource costs: the factors or inputs used by providers or financing agents to produce the goods and services consumed or the activities conducted in the system;

• demographic characteristics, socioeconomic status and health status of beneficiaries: policy‐relevant groupings of those receiving or affected by the goods and services consumed within the health accounts boundaries, e.g. age, sex, race, region, income, disease state, or type of intervention received;

1.2 Process of implementing national health accounts

There are three phases involved in starting a health accounts project, and this guide is divided into three corresponding parts to address each of those phases.

1. The first phase is the organization stage: the parameters of the project are resolved, the project is staffed and provided with resources, a preliminary sketch is made of the health care financing system, and the structure of the health accounts is laid out (Chapters 1–5).

2. In the second phase, data sources are identified, catalogued and examined for accuracy and usefulness to the health accounts, and gaps in information are identified (Chapters 6–8).

3. In the third phase, the accounts are “populated” with estimates of spending, the assessment of the gaps in information is refined, and the stage is set for recurrent estimates of national health expenditure (Chapters 9–14).

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1.3 Thoughts before embarking

NHA are proposed as a way to organize and present economic data about the nation’s health care system so as to facilitate policy evaluation and formulation. It is important to note at the outset that:

• It is never possible to estimate health expenditure perfectly and without error.

All countries, no matter how sophisticated their systems, combine “hard”

financial figures with “soft” estimates.

• Throughout the process of building health accounts, it is important to keep in mind what decision‐makers want and need to know.

• Finally, it is important to understand that health accounting is an evolutionary process. Early cycles of a country’s health accounts may be rudimentary and lacking in detail.

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2. Getting organized, gathering the resources to prepare NHA and sketching the health system

2.1 Getting organized

In order to develop NHA, health accountants must develop pictures of the flows of resources through the health system, refining the overall picture of the system so that details emerge. The process requires a combination of human and material resources.

It also requires some notion of what the health system looks like.

2.2 Instituting the health accounts project

The steps involved in preparing for the NHA exercise are as follows.

1. The cost of a health accounts project

The cost of implementing and sustaining national health accounts (NHA) varies by country. The amount of resources needed depends upon the current state of a nation’s health and financial information systems. In a number of countries for which actual figures for development of health accounts are available, first‐year costs have been in the range of US$ 50 000 to US$ 75 000 for average middle size and middle complexity countries (excluding the cost of new survey work); subsequent year costs have been largely absorbed into the cost of producing recurrent statistics.

2. Timeline for setting up health accounts

Experience shows that in most countries useful NHA can be assembled in 12–18 months with a team of 3–6 analysts working part‐time. Preliminary figures can sometimes be produced in a shorter time frame, but more complete, detailed and specific analyses may require more time, especially if a household or provider survey must be undertaken specially for that purpose or if the International Classification for Health Accounts (ICHA) schemes are being implemented for the first time. Every attempt should be made to complete the result as soon as possible. For NHA to be useful they must be timely.

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3. Housing the health accounts project

National authorities have taken different approaches to housing the NHA project.

Four factors should influence the choice of a location.

• Results can easily be made available to institutions and people who make health policy.

• Political and institutional interference is minimized, so that work can continue without significant upheaval resulting from political and institutional changes.

• Representatives from different institutions that can contribute to NHA can come together to collaborate without major difficulties.

• Access is available to the information needed to prepare the accounts.

The location best meeting these conditions differs from country to country. The location may be the ministry of health, finance, statistics or planning. In some countries, the NHA project has been housed outside the government in a university or nongovernmental research institute, although it may be difficult to sustain the exercise for many years outside government‐linked institutions.

2.3 Resources required for the health accounts project

As is true of any production process, NHA rely upon factors of production. Basically, these factors can be divided into three categories: labour (people), capital (tools) and raw material (data).

1. People. In most countries, the task of preparing health accounts is best accomplished by a small team of experts (3 to 5), working for (or with) concerned government agencies. Health accountants should be drawn from among those who are familiar with national economic statistics and accounting practices, the nation’s health system and health policies, and those who have experience with using the data and information generated by different entities in the health system. The most important attributes of a health accountant are a facility with numbers, a willingness to question those numbers, and a willingness to look for and consider alternatives to existing data sources. Experience suggests that the health accounts team should have a steering committee as well. A committee of high‐level representatives from stakeholder organizations can help to keep the project on track. A steering committee can serve as an authoritative conduit for communicating findings to policy‐makers, and it facilitates the institutionalization of the NHA effort by establishing ownership at a high level of the nation’s sociopolitical organization.

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2. Tools. NHA are quite data‐intensive. There are times when large survey datasets must be processed. A desktop computer with a spreadsheet program and a good statistical software package will be necessary.

3. Data. To complete basic estimates of total spending on health and useful breakdowns, data on various types of government and private expenditures are needed. These can often be found in readily accessible sources, such as government financial accounts and records, reports of health insurance agencies, and existing surveys. It is quite likely, however, that pursuit of specific NHA objectives will require some new data collection, and one of the primary roles of the steering committee is to advocate the collection of new data as well as to secure access to all existing data sources.

2.4 Developing a preliminary sketch of the nation's health system

It is important to start with some overall picture of what the health system looks like.

Just as explorers start with existing maps as they develop a more detailed description of the terrain, this early sketch of the health care system is used by health accountants to guide their efforts in classification and measurement of resource flows in the system. Figure 1 and Table 1 provide an example of a rough sketch of a nation’s health care system. The picture thus developed should, however, be viewed as a preliminary rather than final outline.

Figure 1. The flow of funds through a simple health system

Sources Financing agencies Providers

Ministry of Finance

Public firms

Private firms

External Funding Agencies

Households

Ministry of Health

Private hospitals Ministry of Education

Social security organization

Households (Out-of-pocket) Private health insurance

Ministry of Health facilities

Private outpatient units

Pharmacies

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Table 1. Profile of a health sub‐system

Benefits by health sub- systems

Coverage/special categories

Principal financing sources

Provider-payer relationship

% of population covered/eligible

Size of operation

Describes types of services and benefits available.

Describes coverage and eligibility criteria, special programmes for specific population groups

Describes main sources of financing

Describes relationship between financing and service delivery functions

No. of people covered or eligible by health system nationwide

As indicated by staff, beds, or number of facilities

Government services/Ministry of Health

National social security

Civil servants cooperative

Armed forces

Private health

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3. Defining and categorizing health expenditure

3.1 Expenditure

An early task in the development of the NHA framework is to decide what types of activities to include and what types to exclude. In this guide, the boundary is set as follows: national health expenditure encompasses all expenditures for activities whose primary purpose is to restore, improve and maintain health for the nation and for individuals during a defined period of time. This definition applies regardless of the type of the institution or entity providing or paying for the health activity.

It is important to have consistent rules in making these decisions, in order to allow for greater cross‐payer (and cross‐country) comparability of health expenditure estimates, as well as for greater comparability over time within a country’s accounts.

In this guide, goods and services purchased from informal health care providers, even those not medically qualified, can be allowed as appropriate for inclusion in the accounts. Similarly, purchases from traditional providers, who may not use so‐called

“western” or allopathic medical technology, may be included.

3.2 Space and time boundaries of national health accounts

In addition to a boundary stated in terms of the types of activities considered, NHA possess boundaries in terms of space and time.

1. Space. The accounts capture health expenditure for a country, but this measure is not limited to the activity that takes place within the national borders. Rather, it is defined in terms of the nation’s citizens and residents. This means that the accounts include spending on health care by citizens and residents who are temporarily abroad, as well as spending by external agencies (such as bilateral aid agencies) on inputs to health care within that country. The accounts exclude spending in the country by foreign nationals, which is technically the “export” of health care.

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2. Time. The time boundary of the health accounts has two elements. First, a particular period must be chosen within which the activities took place. Most often this is a fiscal year or a calendar year. The other element is the distinction between when the activity took place and when the transaction that paid for the activity took place. In practice, this involves a choice between accrual accounting and cash accounting. Health accounts should use the accrual method, in which expenditures are attributed to the time period during which the economic value was created, rather than the cash method, in which expenditures are registered when the actual cash disbursements took place.

Table 2.Examples of activities that might be included in or excluded from national health expenditure

Type of activity Likely to be health-related Unlikely to be health-related Water supply and hygiene

activities

Surveillance of drinking-water quality; construction of water protection whose primary purpose is to eliminate waterborne disease

Construction and maintenance of large urban water supply systems whose primary purpose is access to water for the urban population

Nutritional support activities

Nutritional counselling and supplementary feeding

programme to reduce children’s malnutrition

General school lunch programmes and general subsidies for food prices, whose primary purposes is income support or security

Education and training Medical education and in-service training for paramedical workers

Secondary school education received by future physicians or health workers

Research Medical research; health services research to improve programme performance

Basic scientific research in biology and chemistry

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4. Classification schedules

4.1 Classification structure

Because the boundary of the health accounts is defined in terms of the nature of the activity being performed, it is essential to have a sound way to categorize those activities by their nature. It is also important to identify the sources of funds and those who manage funds in some detail.

The NHA classification scheme describes the principal dimensions of a health care system (namely, financing sources, financing agents, providers and functions) in terms of categories whose contents have common characteristics. With these categories, NHA offers a common class by which countries can describe the financiers, purchasers, and beneficiaries of health care and health services. Using a globally accepted classification allows countries to conduct international comparisons of their health systems’ performance. Each classification and category of NHA has a code. A letter code is used for the four main classifications:

• Financing sources of health expenditures are denoted by the code FS

• Financing agents are denoted by the code HF

• Health providers are denoted by the code HP

• Health care functions are denoted by the code HC

The NHA classification is an extension of the International Classification of Health Accounts (ICHA) designed by the member states of the Organization for Economic Cooperation and Development (OECD) which targets the needs of low‐income and middle‐income countries. The NHA methodology starts with ICHA classifications but allows further disaggregation of categories to accommodate the pluralistic nature of developing countries’ health care systems.

The following considerations are important when designing a country’s health sector classification structure.

• Respect, to the extent possible, the existing international standards and conventions but be flexible enough to meet the specific policy needs required for national analysis.

• Add nationally relevant sub‐categories.

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• When adding subcategories, the first two characters of the code should match ICHA categories. The numbers that follow can designate the more disaggregated, nationally relevant classification.

• Ignore ICHA categories that are not relevant in your country but respect the internationally agreed upon NHA codes.

• The categories in any classification scheme need to be mutually exclusive and exhaustive. Mutual exclusivity means that each transaction (or other unit being analysed) cannot go into more than one category. Exhaustiveness means that each and every transaction can go into one category. Together, they mean that each transaction goes into exactly one category.

4.2 Classification for financing sources–FS

Financing sources are entities that provide health funds. They answer the question

“Where does the money come from?” Examples include Ministry of Finance, households and donors. Note that the health insurance schemes and social security are not a financing source.

Code description FS:

FS.1 Public funds

FS.1.1 Territorial government funds

FS.1.1.1 Central government revenue

FS.1.1.2 Regional and municipal government revenue FS.1.2 Other public funds

FS.1.2.1 Return on assets held by a public entity FS.1.2.2 Other

FS.2 Private funds

FS.2.1 Employer funds

FS.2.1.1 Parastatal employer funds FS.2.1.2 Other employer funds FS.2.2 Household funds

FS.2.3 Non‐profit institutions serving individuals FS.2.4 Other private funds

FS.2.4.1 Return on assets held by a private entity FS.2.4.2 Other

FS.3 Rest of the world funds

4.3 Classification for financing agents–HF

Financing agents receive funds from financing sources and use them to pay for

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programmatic responsibilities of financing agents give them influence or actual control over how the funds are used. This category sheds light on the question, “Who manages and organizes the funds?” For example, although the Ministry of Finance, a financing source, may allocate funds to the Ministry of Health, it is the Ministry of Health that decides how the funds will actually be distributed within the health system and for what. Therefore, the Ministry of Health is the financing agent. Other examples are insurance companies and other ministries (e.g. Ministry of Education).

Code description FA:

HF.1 General government

HF.1.1 Territorial government HF.1.1.1 Central government

HF.1.1.1.1 Ministry of Health HF.1.1.1.2 Ministry of Education HF.1.1.2 State/provincial government HF.1.1.3 Local/municipal government HF.1.2 Social security funds

HF.2 Private sector

HF.2.1 Private social insurance

HF.2.2 Other private insurance (other than social insurance) HF.2.3 Household out‐of‐pocket

HF.2.4 Non‐profit institutions serving households HF.2.5 Private firms and corporations

HF.3 Rest of the world

The Guide also introduces the concept of a public health sector (HF.A) and non public sector (HF.B) to the above classification (please see Table 4.2 in the Guide).

4.4 Classification for providers–HP

Providers are the end recipients of health care funds. This group of health care actors answers the question, “To whom did the money go?” Providers are entities that deliver health services. Examples include private and public hospitals, clinics and health care stations.

Code description HP:

HP.1 Hospitals

HP.1.1 General Hospitals

HP.1.1.1 Government‐owned general hospitals HP.1.1.2 Private‐for‐profit owned general hospitals HP.1.2 Mental health and substance abuse hospitals

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HP.1.3 Specialty hospitals (other than mental health) HP.2. Nursing and residential care facilities

HP.3. Providers of ambulatory health care HP.3.1 Offices of physicians

HP.3.2 Offices of dentists

HP.3.3 Offices of other health practitioners HP.3.4 Outpatient care centres

HP.3.5 Medical and diagnostic laboratories HP.4 Retail sale and other providers of medical goods

HP.5 Provision and administration of public health programmes HP.6 General health administration and insurance

HP.7 All other industries

HP.8 Institutions providing health‐related services HP.9 Rest of the world

4.5 Classification for functions–HC

Functions refer to the services or activities that providers deliver with their funds.

Information at this level answers the question, “What type of service, product or activity was actually produced?” Examples include curative care, long‐term nursing care, medical goods (e.g. pharmaceuticals), preventive services and health care administration.

Code description HC:

HC.1 Services of curative care

HC.1.1 Inpatient curative care HC.1.2 Day cases of curative care HC.1.3 Outpatient curative care

HC.1.3.1 Basic medical and diagnostic services HC.1.3.2 Outpatient dental care

HC.1.3.3 All other specialized medical services HC.1.3.4 All other outpatient curative care HC.2 Services of rehabilitative care

HC.3 Services of long‐term nursing care HC.4 Ancillary services to medical care

HC.4.1 Clinical laboratory HC.4.2 Diagnostic imaging

HC.4.3 Patient transport and emergency rescue HC.5 Medical goods dispensed to outpatients

HC.5.1 Pharmaceuticals and other medical non‐durables HC.5.1.1 Prescribed medicines

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HC.5.1.3 Other medical non‐durables

HC.5.2 Therapeutic appliances and other medical durables HC.6 Prevention and public health services

HC.7 Health administration and health insurance HC.nsk HC expenditure not specified by kind

HC.R.1‐5 Health‐related functions

HCR.1 Capital formation for health care provider institutions HCR.2 Education and training of health personnel

HCR.3 Research and development in health

HCR. n.s.k HCR expenditure not specified by any kind

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5. National health accounts tables

National health accounts are presented in a set of two‐way interrelated tables. Each of the NHA tables displays some facet of health expenditure cross‐tabulated by two of the dimensions described above. One of these dimensions can be thought of as the

“origin” of the funds and the other dimension as the “use” of the funds. By convention, the origin dimension is shown as columns in the table and the use dimension is shown as rows. Any change in the figures of a cell in one of the tables will affect the rest.

Experience in countries where health accounts have been created indicates that three of the dimensions listed are critical for accurate estimation of total health spending.

These are the dimensions of financing agents, providers and functions.

Consequently, the following four tables are considered NHA core tables:

• Health expenditure by type of financing agent and type of provider (FA×P)

• Health expenditure by type of provider and type of function (P×F)

• Health expenditure by type of financing agent and type of function (FA×F)

• Health expenditure by financing source and type of financing agent (FS×FA) (See Tables 5.2 to 5.9 in Guide to producing national health accounts.)

As to which tables should be prepared first, again the answer lies in circumstances specific to the country. What has emerged from the experience of countries in which health accounts have been developed is that the starting point is an analysis of financing agents. The subsequent path of estimation depends upon the availability and quality of data available to the health accounts team.

Countries are encouraged to produce at least the NHA core tables in their initial attempts to produce NHA.

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6. Data and the national health accounts

6.1 Assembling data

Once the framework for a country’s health accounts has been established, the next task is to assemble a database with which to estimate the parts of that framework. A considerable amount of time should be spent searching for, evaluating and comparing sources of data to find those that best capture the transactions and flows of resources that occur in the health system.

In many countries, a great part of the data needed for health accounts can be found

“off‐the‐shelf” (secondary data sources). Existing reports and various national statistical projects can be excellent sources of data themselves, and can also be used to identify other sources of information. The national health accountants should consult with and take advantage of expertise and experience of “national accountants” and institutions responsible for the production of “national accounts”

such as Ministry of Finance, Ministry of Planning, central banks and statistical centres. However, in some cases there is a need to collect data through surveys (primary data sources). Thus, the data collection aspect of health accounting has four goals:

• using all suitable existing data;

• adjusting existing data to bring them closer to suitability;

• improving or enriching surveys and administrative records with a potential for suitability;

• arranging for collection or generation of “missing” data.

6.2 Creating a data plan

Before beginning to populate the tables that comprise the NHA, it is important to plan the acquisition of the data that will be used. A very important prerequisite to a good data plan is the preliminary sketch of the health system described in Chapter 2.

This phase of the NHA process is another where the existence of a steering committee is useful. Whether the data needed for the health accounts already exist (secondary data) or must be collected (primary data), it is likely that some form of persuasion will be needed.

The data plan should focus on several questions. For each of the dimensions of the health accounts, the plan should indicate which data sources are to be contacted, and

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who is responsible for that contact. The plan should indicate what types of information are needed, including the time period covered and the desired detail of the data. The plan should also include a tentative time frame within which the data will be acquired, although this time line will almost certainly change many times as the availability of the data are explored with the sources of those data.

Table 2. Example of a data plan for secondary sources

Name of data source NHA team member responsible for getting data

Person to contact (from steering committee) to obtain information

Government records

Insurers records

Providers records

Donors records

Pharmaceutical industry records

Table 3. Example of a data plan for primary sources

Name of data source

NHA team member responsible for coordinating survey instrument design

Person to contact (from steering committee) to consult when designing the survey

Deadline to meet with contact person

Deadline to pretest, implement survey and collect data

Insurance company survey

Household survey

Donors survey

Employers survey

Traditional healers survey

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7. A guide to non-survey sources of data

7.1 Use of non-survey sources of data

Countries usually lack information in the form required by NHA. Although, specific and tailored primary data collection is ideal, one of the roles of NHA accountants is to identify exactly what information is needed and what the available sources are and how well the content fits the needs. Needless to say, all sources of information need to be assessed. In many cases, several sources have to be used. Different sources complement and are used for validation.

This chapter provides a guide to non‐survey sources of data. It is organized according to the main types of institutions or entities in the health accounts, as these are most frequently the places where the health accountants go to collect the required data.

7.2 Government entities

In most countries, government data sources provide the greatest wealth of information for both public and private entities of any source available, but they may also pose subtle traps for the health accountant.

• The sheer mass of government data may mask differences of definition and operational differences between governmental and national health accounts (NHA) practice, and the complexity of government transactions introduces a risk of double counting or undercounting health expenditure (or both).

• An important consideration with government budgetary records is the distinction between anticipated spending, executed spending and audited spending as these numbers may be very different.

• In compiling data on government health spending from budgetary records, health accountants must be attentive to the fact that health expenditures are not confined to the health ministry

• In some cases health accountants may face resistance from “protected ministries”

whose expenditure figures are considered sensitive or classified.

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7.3 Social security

As with government budgetary data, data on the financial operations of social security schemes are relatively easy to obtain. By definition, social security is mandated, and mandates usually imply a minimum level of financial reporting either to government agencies or to the public. For the purposes of the NHA, information is required both on the sources of revenue (to construct tables on financing sources), and on actual expenditures. In collecting data on sources of revenue, care must be taken to distinguish tax subsidies, employer‐paid premiums, employee or household premiums and investment income.

It may be possible for social security funds to provide data on patient co‐payments associated with covered services. If so, the quality of those estimates should be explored, as they could be a source of information to verify consumer information coming from other sources.

7.4 Private insurance companies: social insurance and voluntary medical insurance

In many countries the insurance industry is evolving rapidly, with a bewildering variety of insurance products available. The quality and level of detail of private insurance company data are correlated with the maturity of the market. Some data on the insurance industry may be available from routine sources. For example, government and regulatory agencies may collect official statistics. Where available data are insufficient, primary data collection through surveys is usually necessary.

7.5 Data on firms and employers

In their capacity as employers, firms make several kinds of payments on behalf of their employees. One kind is social security premiums, which typically are mandated payroll taxes. These payments are best captured by direct data collection from the social security agencies themselves.

The degree of employer involvement in health care activity tends to vary by industry. More mature and stable industries tend to be more likely to offer non‐wage benefits. Data collection challenges related to employers mainly arise regarding voluntary payments employers make for employees or their dependants.

There are a number of potential routine data sources that can be used to make estimates of these expenditures. The government may conduct routine official

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questions are sufficiently comprehensive, this can be a reliable and sufficient data source.

7.6 Household data

There are two reasons to be concerned about data on household (or out‐of‐pocket) spending for health care. The first is the importance of the household as a payer.

Households account for a large share of total health expenditure in most middle‐

income and low‐income countries. The second reason for concern is the difficulty of acquiring good estimates. With the exception of small amounts recorded by government providers as user fee revenue, most of these expenditures are not reported in routinely available provider statistics or other administrative data sources. The most common and important source of information about households is a household expenditure survey. A properly designed and conducted survey can provide valuable details about household health spending as well as composition and distributional characteristics of that spending.

7.7 Data on providers

Collecting data on providers (both public and private providers) poses challenges similar to those posed by collecting data on financing agents. On the one hand, the problems may be greater, because of the number of providers involved. On the other hand, estimates of provider activity may be more readily available from other national authorities than is the case for financing agents. In many cases a provider survey which includes private hospitals, private practitioners, pharmacies, laboratories, etc. may be necessary. Efforts must be made to distinguish between entities that are just providers of health care and those that are both financing agents and providers.

7.8 Data on local and international nongovernmental organizations and other external organizations

Non‐profit nongovernmental organizations operate in most health systems. In some cases, they operate health care facilities; or they may engage in public health activities, or finance health research. Typically, it is difficult to obtain data on nongovernmental organizations. The organizations tend to work independently of each other, and record‐keeping and reporting practices are comparatively weak (except for the largest organizations).

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Accounting for expenditure flows relating to external resources can also be difficult.

Although many countries in theory have mechanisms to monitor aid disbursements, challenges are posed by the manner in which many international assistance activities are funded and by the lack of standardized reporting systems across organizations.

The complexity of financing arrangements also complicates the development of usable data. If international assistance is significant in the country’s health economy, collection of this information—in aggregate and with the appropriate detail—may involve substantial effort.

It is impossible to overemphasize the unending nature of the search for data.

Complacency in this regard can seriously reduce the accuracy and utility of the accounts.

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8. Developing and using surveys in health accounts

8.1 Collecting primary data

A central activity in health accounting is the generation and use of data collected through surveys. Administrative records and other recurrent reports typically provide little information about the transactions of households, non‐profit organizations, private medical insurance, specific public entities and external financing agencies. For this type of information, health accountants often must turn to primary data collection, i.e. survey data.

Survey data are an important source of information on actors with an important role in total health spending, and must be used very carefully. Misinterpretation of survey data is among the most important causes of error in health accounts. Making reliable expenditure estimates with survey data requires understanding the potential pitfalls in the use of these data and familiarity with methods to overcome their inherent weaknesses. Survey data are valuable only to the extent that they can be assumed to reliably reflect the reality of a country’s health system.

The validity of data rests on the way in which the data are generated. There is a clear trade‐off involved in data collection in any information system, including health accounts. On the one hand, the more comprehensive is the data collection, the more it costs to undertake and the longer it takes to complete, whereas the typical health accounts project has little money and is asked to produce results quickly. On the other hand, small‐scale non‐random surveys can cost very little to undertake but often produce results that cannot be generalized to the population as a whole, whereas health accountants are asked to produce information about the whole population in a way that supports informed policy decisions. The art of the survey is to strike a balance between cost, timeliness and quality.

8.2 Census data

If data collection were arrayed along a spectrum from most complete to least complete, census data would be at the “most complete” end. In a census, each and

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every unit in the population (alternatively called “the universe” in the jargon of statisticians) is sought and surveyed for the information being collected. A census is at the high end of the spectrum in terms of completeness and is also at the high end of the cost spectrum. The message for the health accountant should be clear. When good quality census data is available, it should be used.

8.3 Random sample surveys

Surveys of a random sample of the general population are very well known. In fact, the term “survey” has almost come to be associated with the random sample. In this type of survey, a certain number of respondents are chosen from the general population to receive the survey and their answers are “generalized” to the rest of the population.

It is worth noting that in various fields of public health low‐cost (sometimes non‐

randomized) and simplified sampling procedures have proven to be useful. The national health accountants should take advantage of these experiences but with due care.

8.4 Rationale for survey

When evaluating a survey as a source of data for the health care accounts, it is important to consider the principal reason for the survey. Surveys fall into two broad categories. One category includes surveys conducted for general or multiple purposes. The second category consists of surveys conducted to collect information on specific topics.

General household expenditure surveys have two principal advantages. They are commonly conducted on a regular basis by national authorities for the purpose of compiling general economic statistics, and they record expenditures other than those to be included in national health expenditure.

The relative advantage of a targeted survey of the health industry or of health expenditure is its focus on the health system. In the case of household surveys, this focus helps to reduce recall bias and it can increase the level of detail obtained.

The design, collection and processing of a random sample requires a lot of care.

There are many types of errors including sampling and non‐sampling errors. NHA teams are encouraged to seek the assistance of national statistical authorities.

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8.5 Regularity of survey

Other things being equal, a regularly repeated survey should always be preferred to a one‐time survey. Recurrent surveys have had an opportunity to “work out the kinks”, and results from one year can be compared with results from other years to assess their reliability. Unfortunately, regularly conducted surveys are usually implemented for other reasons than populating the health accounts, and may not offer sufficient detail for that purpose. This is why special surveys on health expenditure are often commissioned.

A key message that appears throughout this Guide is that health accountants should not rely exclusively on their own expertise in generating data. Most central statistical offices and ministries such as ministry of finance and planning dealing with population or labour and employment matters have statistical experts among their staff. Organizations such as the United Nations agencies, multilateral and regional institutions, and development banks can usually provide relatively easy access to such specialists, sometimes not without cost.

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9. Organizing the estimation process:

developing a route map and

establishing a list of financing agents

9.1 Sequencing the estimation steps

The third stage in implementing NHA is estimation of the elements of national health expenditure. Where should one start in estimating national health expenditure? This chapter begins a “task path” that has proven successful in many countries.

Although the logical flow of health accounts follows the flow of money through the health care system, this is not necessarily the best way to sequence the estimation work. Money flows from financing sources to financing agents, thence to providers who engage in functions. In fact, it is probably easiest to begin in the middle of the stream—with financing agents. From there it is possible to work back upstream to financing sources, and downstream to providers and functions.

This recommendation is driven by two basic considerations. First, financing agents represent a sort of bottleneck in the flow of health care spending. Compared to the number of providers or the number of beneficiaries of spending, there are relatively few financing agents, making the process of capturing (or at least representing) them relatively easy. At the same time, the flow of money through financing agents is often more easily separated into funds targeted at health care and those targeted elsewhere than is the case of money flowing from financing sources. It is easier to track agents’

funds back to the source than to try to identify which flows from the source will end up in the health care system. The second consideration is that the data pertaining to these agents is often the soundest of any of the data available, and so this is the strongest dimension of any in the accounts.

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Initiate project

Set up team and steering committee Establish customer expectations Sketch health system

Structure health accounts

Inventory data Secure access to data Evaluate quality

Identify information gaps

Estimate and distribute national health expenditure (NHE)

(1) FA vector

(2) FSxFA (2) FAxP

(3)PxF (3) FAxF

(4) Distribute NHE

Demographic

Socioeconomic status

Diseases/

Health status/

Interventions

Geographical Resource

costs

FA = financing agent; P = provider; FS = financing source; F= function.

Figure 2. Route map for estimating national health accounts

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Although the estimation path shown in Figure 2 indicates movement in one direction only, in practice health accounting involves considerable iteration. For example, the process of completing the table of financing agents and providers may lead to rethinking the estimates for those financing agents. The most important thing to remember in completing the accounts is that every piece of information provides a new opportunity to look at everything else that has been done; the beauty of the table approach used in the NHA is that, like double entry bookkeeping, there are at least two views of every entry in the accounts.

This path is one that has had success in many countries, but is not necessarily the best in all situations. The data sources available may not be robust enough to support this approach. In such cases, it may be possible only to estimate the margins of the NHA tables, using budget or expenditure classes (the resource cost dimension described in Chapter 4) as a guide. In some cases, the country’s financing may be so complex or fragmented that the approach simply puts the NHA team on one of the harder paths. If this is the case, other paths should be explored; for example, it may make sense to estimate expenditures by provider type first.

9.2 Organizing the health accounts effort

This section of the guide starts with the premise that an individual has been given the task of producing health accounts for the country. The first steps on that path should be to create a team, build a steering committee and develop a workplan.

9.3 Securing team members

As discussed in Chapter 2, health accounting is done more effectively when there is a diversity of backgrounds and skill sets involved. Team members may be involved in the project on a part‐time basis, or perhaps engaged on a consultant basis, but having more than one person engaged is definitely preferable to a solo effort.

9.4 Building a steering committee

A good steering committee is as important as, if not more important than, a well staffed team. The roles of the steering committee are many. It advocates for budget, acts as a consultant on health system structure and on policy issues to be addressed using the accounts, can assist in gaining access to data, and communicates and advocates for NHA results.

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It is therefore critical to choose steering committee members wisely. Each of the major stakeholders in the health financing system should be represented—providers, financers and financing sources. Each of the key statistical entities should be represented also. Steering committee members should be high enough in their organization’s hierarchy to wield influence, but not so high that they have no time to devote to the project.

9.5 Developing a workplan

It is important to establish a shared set of expectations very early in the project. The NHA team should sit with its management and clearly lay out what is expected, when it is expected and in what format it is expected. These expectations should be shared with and validated by the steering committee. Part of the process of establishing reasonable expectations for the project is the development of a timetable.

Rough times should be laid out for each phase of the project and milestones or waypoints identified to track progress.

9.6 Mapping out the health care system

Again, as discussed in Chapter 2, having a sketch of the health care system in hand before beginning to construct the health accounts tables is of critical importance. In some cases a sketch, or a partial sketch, may already exist; in others it may need to be updated, expanded, or created from scratch. For each of the actors identified in this sketch, some basic information is useful. The task of developing this information requires a balance between speed and thoroughness.

9.7 Creating a data plan

Looking over the sketch that has been developed for the health system, the health accounts team should work with their managers and the steering committee to develop a plan for acquiring data (see Chapter 6).

9.8 Sketching in potential financing agents

A good first step in the process of sketching in potential financing agents is to list all the various central government organizations that spend money on health. It is not important to try to match money amounts with these sources just yet, nor even to

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work out whose money they are spending—the goal is to get a complete listing of financing agents. The framework for this list was laid out in Chapter 4.

Of course, the ministry of health comes to mind immediately, but there are most likely other central government ministries that have some role, too. Most governments do not restrict health service expenditures to their health ministry;

programmes are frequently found in other departments.

Social security schemes (HF.1.2) should be included if they pay for health care. If more than one scheme exists, the costs and benefits of keeping each of them distinct within the HF schedule should be considered.

Parastatal firms, such as government‐owned mining or power companies, should be listed if they engage in health activity through company clinics or insurance schemes.

Once the list of potential government financers of health care spending is completed, nongovernment spenders should be considered. Is there a private insurance industry? If so, it should be listed here. If both a private social insurance industry (HF.2.1) and a private (voluntary) medical insurance industry (HF.2.2) exist, they should be listed separately.

Households are a purchaser of care in any health care system, and must be listed (HF.2.3).

There should be an entry (or more than one) for nonprofit organizations in the list.

These organizations may operate health care facilities, or engage in public health activity, or finance health research. They should be assigned codes in the HF.2.4 group.

Private firms (HF.2.5.2) should be listed, because these entities often pay for or provide health care on behalf of their employees.

If external organizations are active in the country, they should be included in the list and assigned codes in the HF.3 group.

When organizing the list of financing agents, it is critical to bear in mind the definition of health spending discussed in Chapter 3.

9.9 Filling in the tables

With this organizational background, the NHA team can begin work on its project, arranging the apparent financing agents from its sketch along the lines of the ICHA‐

1.1 National health accounts framework and contents

Contents

Preface

Acknowledgements

1. Introduction

1.1 National health accounts framework and contents

1.2 Process of implementing national health accounts

1.3 Thoughts before embarking

2. Getting organized, gathering the resources to prepare NHA and sketching the health system

2.1 Getting organized

2.2 Instituting the health accounts project

2.3 Resources required for the health accounts project

2.4 Developing a preliminary sketch of the nation's health system

3. Defining and categorizing health expenditure

3.1 Expenditure

3.2 Space and time boundaries of national health accounts

4. Classification schedules

4.1 Classification structure

4.2 Classification for financing sources–FS

4.3 Classification for financing agents–HF

4.4 Classification for providers–HP

4.5 Classification for functions–HC

5. National health accounts tables

6. Data and the national health accounts

6.1 Assembling data

6.2 Creating a data plan

7. A guide to non-survey sources of data

7.1 Use of non-survey sources of data

7.2 Government entities

7.3 Social security

7.4 Private insurance companies: social insurance and voluntary medical insurance

7.5 Data on firms and employers

7.6 Household data

7.7 Data on providers

7.8 Data on local and international nongovernmental organizations and other external organizations

8. Developing and using surveys in health accounts

8.1 Collecting primary data

8.2 Census data

8.3 Random sample surveys

8.4 Rationale for survey

8.5 Regularity of survey

9. Organizing the estimation process:

developing a route map and

establishing a list of financing agents

9.1 Sequencing the estimation steps

9.2 Organizing the health accounts effort

9.3 Securing team members

9.4 Building a steering committee

9.5 Developing a workplan

9.6 Mapping out the health care system

9.7 Creating a data plan

9.8 Sketching in potential financing agents

9.9 Filling in the tables