IPS HPP Occasional Paper No. 09

This document provides a set of classifications for use in Hong Kong DHA, developed through a process of review of international practice and deliberation by task groups appointed by the Hong Kong SAR Government Health and Welfare Bureau. Included is a review of current definitions and classifications used in NHA work by the Organisations of Economic Co-operation and Development (OECD) and four OECD member countries, USA, UK, Canada and Japan. The four countries were selected on the basis of feedback received from the DHA Team appointed by the Hong Kong government. On the basis of these approaches, a draft working paper was produced with recommendations as to options for the framework to be used in Hong Kong’s DHA and distributed among members of the DHA team. The paper was revised to incorporate comments made by the DHA team. This current paper is based on a previous paper by the same authors, Review of international NHA classifications and definitions for preparation of HK DHA, (March, 1998).

Preparation of this document involved a systematic review of the current definitions used by the four countries concerned, the definitions used y the OECD secretariat in preparing its 1998 estimates of health spending in OECD member countries (to be published later in 1998, and referred to herein as OECD 1998), and a draft proposal for collecting international health statistics under preparation by the OECD secretariat in October 1997 (unpublished document made available to Institute of Policy Studies by OECD, referred to herein as OECD Proposal).

OECD 1998 is the most recent version of the set of definitions used by OECD in preparing its annual estimates of health spending in the OECD. It has been developed over several years in an ongoing attempt to standardise the available data reported by member countries, and therefore reflects substantially the structure of the health expenditure reporting system in individual countries, in particular those of USA.

OECD Proposal (October, 1997 version) is a new set of classifications and frameworks prepared by the OECD secretariat for measuring health expenditures in a manner consistent with other UN statistical reporting systems and the existing OECD database. It differs from OECD 1998 in that it proposes a different breakdown or classification of health expenditures, and in that it provides much more detailed sets of definitions for the various types of expenditures. Its functional classification of health expenditures, the ICHE (International Classification of Health Expenditures), is presented in four levels of desegregation, each level of which is labelled according to a system of 1-4 digit codes. OECD plans to test this new approach during the next two years, and based on resulting modifications and feedback from non-OECD countries and experts to propose a revised version of the Proposal to Eurostat and other UN agencies as a global standard for health expenditure estimation. We have included the OECD Proposal in our review, as it is likely that it will lead eventually to a new international system of health expenditures estimation. However, the OECD Proposal is yet to be ratified by the OECD itself, and currently contains several major defects, which we believe will force major modifications. For this reason, we have focused on those elements in the OECD Proposal which are most useful and likely to stand the test of time.