PPPs for Health and Education
Compilation of PPPs for health and education is a challenging task given the complexity of the provision and consumption of health and education goods and services. In a vast majority of countries health and education services are provided through a mixture of government-run and privately run schools, universities, hospitals and other institutions. As the services provided by governments are not sold at market prices, an input-based approach is used. This has been the approach used in the ICP, a description of the ICP approach to the compilation of PPPs for health and education is provided in Blades (2013). The Eurostat and OECD have started using output-based measures of prices and volumes for health and education. Given these new developments, it is appropriate to explore the feasibility and effect of introducing this approach in other regions. The challenges associated with implementing the output-based approach in other regions were also discussed in the FOC report.
“No doubt the OECD/Eurostat experience with the output approaches in these areas should be carefully analyzed by all regions. The challenge with the output approach, however, is that it requires data that are not always available or are of a questionable nature. Outputs (and their quality) are more difficult to define and could be less comparable. For the time being, the input-based approach with productivity adjustment is most likely the best possible option for the worldwide ICP. However, the process for calculating productivity adjustment factors, as well as the application of productivity adjustment factors, should be streamlined.” (Paragraph 38, E/CN.3/2016/9, UN, 2016)
- Accordingly, the following aspects need to be researched:
- Articulate an output-based approach for health including classification of services;
- Design an output based approach to education by defining outputs and quality measures;
- Assess the availability of data in participating countries, including sources from the World Health Organization (WHO), the United Nations Educational, Scientific and Cultural Organization (UNESCO) and other organizations;
- Evaluate effects of implementing the output-based approach compared to the regular input-based method.