This presentation was made by Camila Vammalle, OECD, at the 2nd Health Systems joint Network Meeting for Central, Eastern and Southeastern European Countries held in Tallinn, Estonia, on 1-2 December 2016

1. PERFORMANCE BUDGETING,
REPORTING AND MONITORING IN
HEALTH: KEY ISSUES
Camila Vammalle
Budgeting and Public Expenditures,
Public Governance & Territorial Development
OECD

2. “Using information about the performance and results of
programmes in the processes of budgeting and resource
allocation”
• Traditional, “old-fashioned” approach to budgeting
– Financial focus: only half of the equation of budgeting
– Focus on “line items”, % increase or decrease in allocations
• Modern approach – show performance and impact
– What are we buying for what we are spending? Full picture
– Encourages debate on evidence, rationale for allocations
– Better engagement by policy stakeholders
What is “Performance Budgeting?”

3. • PRESENTATIONAL APPROACH
– Show outputs, performance indicators separately from the budget
document
– Easy – but effective?
• PERFORMANCE-INFORMED BUDGETING
– Include performance metrics within the budget document
– Involves re-structuring of budget document – more engaging?
• PERFORMANCE-BASED BUDGETING
– More direct linkage between results and resources; contractual
models
– Involves extensive re-working of budget lines – is it worth it?
• also: MANAGERIAL PERFORMANCE APPROACH
– Focus on managerial impacts and changes in organisational
behaviour
– Less emphasis on link to budget allocation
Some approaches to Performance Budgeting

4. • Information about what?
– Activity vs. Outcomes or “Value”
• Provided to whom?
– Citizens? Consumers? Patients?
– Payers? Governments? Managers?
• “Transparent” to whom? And why?
– “Legitimacy” or Control?
• Accountability for what?
– Quality? Spending? Compliance?
• Applied to what parts of the system?
– Hospitals, physicians, medical groups, “health plans”
Using performance information:
Issues to consider

5. • To reduce waiting times
– NHS “Targets and Terror”
• To induce greater productivity through payment
– DRGs outside the United States: “Activity-Based Payment”
• To improve management
– “Knowing what you are buying.” DRGs again
• To encourage specific services – Often “prevention”
– “Pay for Performance” for NHS GPs, U.S. Primary Care
Groups
• To punish specific activities
– Readmission rates in United States
Measuring activity:
Common objectives

6. • Quality, relevance and
objectivity of performance
information
• What’s the proper response to
Poor Performance?
• “Gaming” of performance
targets
– “Outcomes” are better targets
than “outputs” – but harder
• Engagement
– by public administration - central
& line ministries
– by political leaders
– by citizens and parliamentarians
Some perennial problems

7. Reporting and monitoring
0 1 2 3 4 5 6
Netherlands
Switzerland
Finland
Austria
Czech Rep.
France
Germany
Mexico
Norway
UK
Australia
Chile
Denmark
Estonia
Hungary
New Zealand
Poland
Slovak Rep.
Slovenia
Korea
(months) None 1 to 2 3 to 6 6 to 12 12 to 24
Delay in reporting health expenditure to central budget agency

8. An example of use of performance
information in France
Cardiovascular
diseases, acute
Cardiovascular disease,
chronic
Treatment of vascular
risk factors (no CVD)
Diabetes
Cancers, active
Cancers, surveillance
Psychiatric diseases
Psychiatric treaments
Neurologic diseases
Chronic
respiratory
disease
Inflammatory or rare
diseases or HIV
Diseases of the
liver or pancreas
Maternity
Isolated hospitalisation
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
0 2,000 4,000 6,000 8,000 10,000 12,000
Numberofpatients
Average cost per patient (€)
Map the burden of disease and their costs in France

9. An example of use “budgeting for results” in
Peru: the Articulated Nutritional Programme
Goal:
Reduction of chronic malnutrition
Identify causes of malnutrition based on evidence:
- High incidence of respiratory infections
- Micronutrients deficiency
- Inadequate feeding of children under 6 months
- Low birth rate
Identify what activities have the greatest impacts on
these intermediary outcomes
Design the most cost-effective
interventions
Multidisciplinary approach:
• Education policy (improving
literacy of mothers)
• Sanitation and water policies
• Vaccination policies

10. THANK YOU!
Camila.vammalle@oecd.org

11. • Does your country have a performance budgeting
framework in place for the health sector?
– If so: What are the main objectives of these frameworks (e.g.
improved accountability, as a managerial tool, tracking progress
towards national health objectives)?
• What have been the outcomes of sharing comparative
performance information? What are the main benefits,
challenges and limitations of this approach?
• How long does it take for health spending to be reported
to the Ministry of Finance?
Issues for discussion