Comparisons of Hospital Output in Canada : National and International Perspectives

Current cost-based approach in measuring health care output does not allow decomposition of health care expenditure into price and output components. In this paper we propose an episode-based direction measurement method which closely resembles the concept of output in the system of national accounts. Using data from the Canadian Institute for Health Information, we calculate a quality unadjusted output index of the Canadian hospital sector for the periods 1996--2005. The result shows that total output increases at an average annual growth rate of 1.49 percent. We expect that with the quality adjustment the actual rate is higher. This is in contrast with the long-held assumption that health care productivity growth is zero. Our results provide key information on the ongoing health care policy debate