Output and Productivity Measures for Medical Care and Education

April 1, 2009

Of services output generally, “…it is not exactly clear what is being transacted, what is the output and what services correspond to the payments made to their providers (Griliches, 1992). Medical care and education are services sectors where output measurement is ambiguous or difficult, both for conceptual and empirical reasons. Much recent progress has been made on methods for measuring medical care output. Far less progress is evident on education output, for reasons I will explain in section II of this paper.

In the U.S., concern for improving data on medical care output and productivity extends well beyond the national accountants. A National Academy of Sciences panel is currently reviewing measures of medical care output and accounts for medical care and for health. In the U.K. as well, concern for these topics extended outside the rarified circle of national accountants: Is there any other country where health system productivity figured in Parliamentary debate?

In the last section of this paper, I contend that measuring the output of medical care should be a concern, not just for the national accountants, but also for politicians and managers of health care systems: The data needed by national accountants to measure health care output appropriately are data that are also necessary for analysis and understanding of advancing health care costs and for improving health care delivery. The public policy analysis need is a more urgent one than improving the national accounts, but fortunately the two agendas coincide.