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Productivity performance measurement - follow-up

Partner Institute: 
University of Southern Denmark, Odense
Survey no: 
Kristensen, Troels
Health Policy Issues: 
Public Health, Funding / Pooling, Others
Productivity performance measurement
Reform formerly reported in: 
Performance measurement - productivity
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes yes no
Featured in half-yearly report: Health Policy Developments 11


The Danish Ministry of Health has published the third annual report on hospital productivity. This experience has contributed to policy goals becoming more detailed and ambitious. New policy goals are: to include hospital productivity measures at less aggregated levels, to include labour productivity and hospital psychiatric care, to provide web-based solutions that facilitate access to productivity data, and to develop new classifications of hospital levels related to structural reforms.

Recent developments

Since the last report on performance measurement (survey round (6)2005), the Ministry of the Interior and Health has started to publish systematic analyses of the productivity performance of the hospital sector at country, regional and county level. The content of these publications, which are the result of annual negotiations between the central government and the regions, has changed over recent years. A working group consisting of central health authories and hospital owners has been established.

Latest reports provide more detailed data on productivity

In 2005 the working group published productivity and productivity development from 2003 and 2004 at country, regional and county levels. In 2006 and 2007 the working group also published productivity data from individual hospitals for the first time. In 2007 the government and regions agreed to supplement the reports with selected productivity indicators and key figures for selected hospital wards. Furthermore, the 2007 report presents how the regions and hospitals have used the productivity measurements. In 2008 the working group plans to further develop the measurements at both hospital and hospital ward level. 

Methodological and data problems

A problem for the working group has been local differences in e.g. registration of costs and of information in the DRG system. A study that investigated the quality of registrations after the introduction of an organisation for registrations in the county of Northern Jutland thus reached the following conclusion:

Locally, there is a need for continuous instruction of both doctors and secretaries regarding correct registration of diagnosis and treatment as well as an improvement of the registration facilities. On a national basis more precise recommendations are required within the medical specialist areas in order to secure an unambiguous registration. Hence some of the differences in productivity might be incorrect due to methodological and data problems.

Development of productivity targets based on previous reports

Nevertheless, the government has used indices from the above mentioned reports to set general productivity targets for all hospitals. Some regions have stipulated differenciated targets for individual hospitals.

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Characteristics of this policy

Degree of Innovation traditional traditional innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low neutral very high
Transferability strongly system-dependent system-dependent system-neutral
current current   previous previous

Structural/systemic impact - Implementation of productivity measurement has influenced the behaviour of hospitals and physisians. Both parties have an interest in creating a high DRG-value in comparison with the costs for instance through added cooperation between doctors and administrators. With the DRG-system the individual doctor got the fingers directly into financial affairs. That gives the possibility of mis-codings, which there are lots of - e.g. at a loss for the ward - but can also induce a business-like way of thinking, if a department is financially pressed - with gains for the ward.

Public visibility - There has been more public focus on improving the efficiency in the hospital sector (cost containment). The reason is an expectation about large rises in costs and expenses for the hospital sector because of shortage of personnel, demographic developments, improved skills of physicians and new treatments.

Transferability - It is relatively difficult to transfer the hospital productivity measurements to other parts of the health sector and the remaining public sector. That is especially due to the lack of relevant measurements of input (costs) and outputs. For instance is the DRG-system designed only for the hospital sector.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes yes no

Initiators of idea/main actors

  • Government
  • Providers
  • Payers
  • Opinion Leaders

Stakeholder positions

The government and the regions have agreed to continue publishing comparable measurements of productivity at hospital level and for selected hospital wards. These measurements can form the basis for the individual regions' realisation and visualisation of future and potential increases in productivity.

The Minister of Health has recently emphasised the importance of increasing the focus on efficiency in the Danish health sector. He has argued that the reason is a shortage of personnel, increasing numbers of clients due to demographic developments with more and more elderly, improved skills of physicians, and new treatments. Through improved efficiency the Minister of Health expects to release additional funds to treat patients.

The reports from 2005-2007 show major variations in hospital productivity. The chairman of the Danish regions has stated that the regions wish to publicise benchmark examples of high productivity and to possibly reward efficient hospitals. He claims that it currently takes too long for good examples to be more generally known and that the regions should be more able to reward hospitals which are good at reorganising in an efficient and intelligent way.

Director Jes Søgaard from the Danish Institute of Health Service Reseach has judged the measurement of productivity to be a reasonable tool, which the hospitals have become better at applying. It is important, however, to remember to make appropriate adjustments to the productivity measurements, e.g. for old buildings, for additional expenditure in rural areas.

Most hospitals seem to accept the system. There has been more focus on understanding and improving productivity measurements - among other things by improved reporting from hospitals to the system.

The policy of productivity measurement seems to be accepted by most actors.

Actors and positions

Description of actors and their positions
MoHvery supportivevery supportive strongly opposed
MoF (former MoH)very supportivevery supportive strongly opposed
Hospitalsvery supportivesupportive strongly opposed
Physiciansvery supportivevery supportive strongly opposed
MoF (former MoH)very supportivevery supportive strongly opposed
Chairman of Danish regionsvery supportivevery supportive strongly opposed
Opinion Leaders
Danish Institute for Health Servicevery supportivesupportive strongly opposed
current current   previous previous

Actors and influence

Description of actors and their influence

MoHvery strongstrong none
MoF (former MoH)very strongvery strong none
Hospitalsvery strongweak none
Physiciansvery strongvery strong none
MoF (former MoH)very strongvery strong none
Chairman of Danish regionsvery strongstrong none
Opinion Leaders
Danish Institute for Health Servicevery strongstrong none
current current   previous previous
MoH, Chairman of Danish regionsMoF (former MoH), Physicians, MoF (former MoH)HospitalsDanish Institute for Health Service

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

All of the above-mentioned actors have been involved in the implementation process.

Monitoring and evaluation

The Ministry of the Interior and Health has reported how the regions have used the implemented measures of productivity (see below).

Expected outcome

From 2005 to 2006 the overall productivity at country level increased by 1.9 per cent. This result is above the target of 1.5 per cent stated in the agreement between the government and the regions. From 2005 to 2006 there have been significant differences in productivity across regions within a range of 1.4 to 2.7 per cent. 

In the coming years performance measures are expected to be increasingly used by government, regions and hospital management to determine budgets and contain costs. The effect on quality is unclear. 

The published results from individual hospitals have been used to set targets for individual hospitals. One regional council has recently decided to increase productivity requirements of individual hospitals for 2008 due to budget deficits (above the general requirements set by the government). 

In the reports from 2005, 2006 and 2007 the working group applied a global measure of productivity at country, regional, county and hospital levels. The Ministry of Health has been reluctant to implement the same global measure of productivity at ward level. This is probably due to differing opinions between actors. It is difficult to infer costs to single wards in a non-arbitrary way due to overhead costs. Instead the working group has applied single performance indicators that measure specific parameters considered to partially reflect the underlying productivity. In 2008 the working group expects to develop new measures of productivity below ward level.  

Impact of this policy

Quality of Health Care Services marginal marginal fundamental
Level of Equity system less equitable neutral system more equitable
Cost Efficiency very low high very high
current current   previous previous

This policy of productivity measurement has put pressure on providers. The policy might have distorted incentives and thereby failed to be instrumental to all hospital activities. From a broad perspective it is believed that the policy has resulted in an overall improvement.


Sources of Information

The Ministry of Finance. Aftaler om den kommunal og regional økonomi for 2008 (Agreement on the local and regional budgets for 2008). 2007. (in Danish)

Ministry of the Interior and Health. Løbende opgørelse af produktivitet i sygehussektoren - treidje delrapport (Current publications of productivity in the hospital sector - third report). 2007.

"Store forskelle på sygehusenes effektivitet" (Great variations in hospital efficiency). Jyllandsposten, December 20,2007.

Kvaliteten af diagnose- og procedurekodning i Ortopædkirurgi Nordjylland (The quality of diagnosis and procedure coding in orthopaedic surgery in Northern Jutland). Ugeskr Læger (168) 48:4212-4215, 2006.

Når læger tænker i penge (When doctors think in money). Ugeskr Læger 170(12): 1010, 2008.

Reform formerly reported in

Performance measurement - productivity
Process Stages: Policy Paper, Idea

Author/s and/or contributors to this survey

Kristensen, Troels

Institute of Public Health, Department of Health Economics

Suggested citation for this online article

Kristensen, Troels. "Productivity performance measurement - follow-up". Health Policy Monitor, April 2008. Available at