This presentation was made by Ivor Beazley, OECD Secretariat, at the 7th meeting of the Joint OECD DELSA/GOV Network on Fiscal Sustainability of Health Systems held at the OECD Conference Centre, Paris, on 14-15 February 2019

1. Performance budgeting frameworks and
measurement systems
Ivor Beazley
7th Annual Meeting of the OECD SBO Joint Network on Fiscal
Sustainability of Health Systems
OECD Headquarters, Paris
14-15 February 2019

2. Budgeting
within
fiscal
objectives
Context: OECD Framework of Modern Budgeting
Quality,
integrity &
independent
audit
Performance,
Evaluation &
VFM
Comprehensi
ve budget
accounting
Effective
budget
execution
Alignment
with medium-
term strategic
plans and
priorities
Performance,
evaluation &
VFM
Transparency,
openness &
accessibility
Participative,
Inclusive
& Realistic
Debate
Fiscal Risks &
Sustainability
Capital
budgeting
framework
2

3. Part I – Performance Budgeting
3
2018 OECD Performance Budgeting Survey

4. Performance Budgeting
Performance budgeting refers to the use of performance
information:
1. To inform budget decisions (whether as a direct
input to budget allocation decisions or as contextual
information and/or inputs to budget planning)
2. To introduce greater transparency and
accountability throughout the budget process (by
providing information to the public on performance
objectives and results).

5. Classifications of different approaches to
performance budgeting
CAN
EST
FIN
GBR
ISL
LVA
MEX
NOR
AUT
CHE
CHLCZE
FRA
HUN
IRL
JPN
KOR
NLD
NZL
SWE
AUS
BEL
DEU
DNK
ESP
ITA POL
SVK
SVN
TUR
Managerial
Performance Approach
(8)
Performance-Informed
Approach
(12)
Presentational
Approach
(10)

6. 6
Performance Budgeting Use

7. 7
Target setting
Coverage of performance
targets (2018)
Responsibility for
target setting (2018)

8. 8
Performance Budgeting
Increased use of performance information - across a broad
range of stakeholders – is observed over the last 5 years
Number of countries

9. 9
Benefits
The greatest benefits are increased transparency about objectives,
and the quality and usefulness of performance information

10. 10
Performance Budgeting
Coordination problems are the biggest challenge
Main challenges for the implementation of performance budgeting (2018)

11. 11
Use of performance information for budget
decision making

12. Part II – Performance Budgeting
and Performance Measurement in
Health
12
2018 OECD Performance Budgeting Survey

13. Performance Budgeting in Health Sector
The impact of performance information is health is
higher than average
Source: OECD Performance Budgeting Survey
(2016)
2
2
4
7
9
12
0 5 10 15 20 25
Sector
average
Health
High
Medium-high
Medium
Number of countries reporting impact of performance information on budgeting
decisions

14. EST
KOR
CAN
DNK
ISR
NLD
GBR
AUT
FIN
GRC
IRESWE
CHL
MEX
TUR
BEL
LAT
NZL
NOR
POL
SVN
CHE
Low
Low-medium
Medium
High
Medium-high
Performance Budgeting in the Health Sector
The impact of performance information on budgeting decisions

15. 15
Objectives of performance
measurement systems in health
0 10 20 30 40 50 60
To improve quality of services
To monitor compliance with national standards
To measure productivity/improvements
To determine budget allocations
To measure public spending efficiency
To identify effective policy strategies
To promote accountability for government spending
To improve capacities of service providers
To benchmark performance of specific service providers
To benchmark sub-national government performance
For cost containment
To promote learning from good practices
To assert budgeting and financial control

16. 16
Responsibility for performance
measurement in Health
58%
27%
8%
3%
National Regional Local Other

17. 17
Whose performance gets measured?
0
10
20
30
40
50
60
70
80
90
Hospitals Providers of
ambulatory health care
Providers of preventive
care
Residential long-term
facilities
Providers of ancillary
services
Retailers and other
providers of medical
goods

18. 18
Impact of common health sector initiatives on
performance measurement
0 10 20 30 40 50 60 70 80 90 100
The monitoring of health access across population/roups
Minimum national standards
Public league tables or ratings
Patient satisfaction/experience surveys
Shift in resources to primary care
Adjusting outputs/inputs to account for care quality
Linking payment/funding to outputs/outcomes
Performance based budgeting
Budget caps
Shift in resources to preventive care
Increased investments in public health
Use of performance contracts
Use of public-private partnerships

19. 19
Challenges in performance measurement
0
10
20
30
40
50
60
70
80
Non-
cooperation
of SNGs
Vested
interests
Cost of
obtaining
info.
Cost of
capital
and IT
Privacy
concerns
Identification
of
performance…
Data
comparability
Measuring
outcomes
Measuring
quality
Data
quality

20. 1. Use of performance budgeting and frameworks has increased
steadily in OECD countries and is now the norm
2. Performance Budgeting has helped to increase the transparency of
programme objectives and the quality and usefulness of
performance information
3. Health has been a pioneer in the use of performance information,
although mostly limited to hospital and ambulatory care services
4. Health ministries play a critical role in determining the
performance framework, although in a federal system, SNGs may
also have a significant role
5. Some initiatives appear more helpful than others in improving
performance measurement, including setting targets for access to
services and minimum service standards
6. Important methodological and practical challenges remain,
including defining output measures, measuring quality and
ensuring the reliability and consistency of data.
20
Performance Measurement – Key Observations

21. THANK YOU !
OECD Senior Budget Officials Network on Performance and Results:
www.oecd.org/gov/budgeting/seniorbudgetoffici
alsnetworkonperformanceandresults.htm
For more information