Workforce Shortage and Wage Bill Forecasts: Effect of Skill Mix Changes (Lecture B2) Richard M. Scheffler, PhD Distinguished Professor of Health Economics & Public Policy Director, Global Center for Health Economics and Policy Research School of Public Health University of California, Berkeley
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Workforce Shortage and Wage Bill Forecasts: Effect of Skill Mix Changes (Lecture B2)
Workforce Shortage and Wage Bill Forecasts: Effect of Skill Mix Changes (Lecture B2). Richard M. Scheffler, PhD Distinguished Professor of Health Economics & Public Policy Director, Global Center for Health Economics and Policy Research School of Public Health - PowerPoint PPT Presentation
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Workforce Shortage and Wage Bill Forecasts: Effect of Skill Mix Changes
(Lecture B2)
Richard M. Scheffler, PhD Distinguished Professor of Health Economics & Public PolicyDirector, Global Center for Health Economics and Policy ResearchSchool of Public HealthUniversity of California, Berkeley
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University of California, Berkeley
Learning Objectives
Forecast workforce shortages and surpluses Estimate economic demand Forecast supply using a trendline Estimate requirements using different utilization
measures and controlling for country-level factors Estimate scaling-up costs
Wage bill Training Non-wage bill
Illustrate workforce and wage bill shortages under different skill mixes
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Overview
Forecast workforce shortages and surpluses
Estimate scaling-up costsIllustrate workforce and wage bill
shortages under different skill mixes
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Two types of shortages
Need-based shortage:
Need – Supply = Shortage
Economic demand-based shortage:
Economic Demand – Supply = Shortage
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WHR 2006 found 2.28 workers per 1,000 population are required to achieve 80% coverage of births
Time period: 2015Estimate need for doctors versus nurses
and midwives separatelyEstimate economic demand for doctorsNeeds-based extensions
Use different needs-based health utilization measures
Use additional co-variates
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Conceptual Framework
0
1
2
3
4
5
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1 2 3 4 5 6 7 8 9 10
Time period
Ph
ysic
ian
s p
er 1
,000
Need
Supply
Surplus Shortage
Demand
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
εi,t : Random disturbance termScheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
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Demand-based model projection
ln(physicians per 1,000 populationi,t) =γ0 + γ1*ln(GNP per capitai,t-5)+ γ2*IncomeDummyi + μi +ηt + εi,t
Where
IncomeDummyi: low-income and middle-income dummies
μi : country fixed effects
ηt : Time fixed effects
εi,t : random disturbance term
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
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Source: Scheffler et al., 2008 The Bulletin of the World Health Organization
Needs-based and demand-based regression modeling results
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Found 0.55 doctors per 1,000 population are required to achieve 80% coverage of births
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Supply projection
ln(doctors per 1,000 populationt) =α0 + α1*Yeart + εt
Where
t = index {1980,…,2001}
Yeart: year dummy variables
εt random disturbance term
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
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Number of countries with projected shortages of doctors in 2015
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
Note: A country was defined to have a shortage if the projected supply of doctors met less than 80% of the projected demand or need.
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Source: Scheffler et al., 2008 The Bulletin of the World Health Organization
Significant doctor shortages projected for Africa and Asia in 2015
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Summary of Findings for Africa
Over 30 countries with projected doctor shortages in 2015
Shortage totals 257,000 doctors
Needs-based demand: 369,000
Projected supply: 112,000
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Doctor Shortages in Africa in 2015
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
Doctor Shortages in Africa in 2015 (cont.)
Countries with no doctor shortages: Botswana, Congo, Namibia, Mauritius, South Africa and Algeria
Forecast workforce shortages and surplusesEstimate requirements using different
utilization measures and controlling for country-level factors
Estimate scaling-up costsIllustrate workforce and wage bill
shortages under different skill mixes
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World Health Survey (WHS) 2002
53 countries used for this analysis, including 18 in Africa
Approximately 4,000 adults per country surveyed
Household and individual surveys
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Descriptive Statistics for Africa (n=18)
Variable Mean Std. Dev.Health Care Services
1. Birth attended by health worker 0.74 0.232. Received healthcare when needed it 0.94 0.04
Women's Health Care3. Pelvic examination <3 years 0.17 0.144. Pap smear test <3 years 0.44 0.145. Mammography <3 years 0.05 0.046. HIV testing offered when pregnant 0.19 0.16
Child vaccinations and supplements7. Received any vaccination 0.76 0.118. Received DPT vaccination 0.93 0.059. Received measles vaccination 0.82 0.1010. Received vitamin A capsule or similar supplement 0.61 0.21
Health Outcomes11. Health rating 0.64 0.1112. Health satisfaction 0.59 0.14
Health WorkforceDoctors per 1,000 population 0.21 0.27Nurses and midwives per 1,000 population 1.52 1.68Health workers per 1,000 population 1.73 1.85
Population DistributionLand (square km) per capita 0.08 0.12Urban (% of total population) 38.01 21.33
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Extended needs-based model
percent of need met =β0 + β1* log(health care professionals per 1,000 population) +x + ε
Where:percent of need met: is for a particular health
care utilization measurex: country-level factors (land area per capita,
percent population that is urban)ε: Random error term
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Number of Required Workers Varies Based on Health Utilization Measure
0
20
40
60
80
100 % receiving health services
0 5 10 15 Health workers per 1,000 population
Birth attended by HW (A) Received health care when needed (B) Pap smear test (C) HIV testing offered (D) Pelvic examination (E) Mammography (F)
A B C D E F
2.28*
*WHO Threshold
2.28*
*WHO Threshold
Source: Fulton and Scheffler, forthcoming. Do not cite or distribute.
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Number of Required Workers Varies Based on Countries’ Geographic Characteristics
Source: Fulton and Scheffler, forthcoming. Do not cite or distribute.
0.0
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Estim
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opula
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Required t
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0 P
erc
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Covera
ge
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Overview
Forecast workforce shortages and surpluses
Estimate scaling-up costsIllustrate workforce and wage bill
shortages under different skill mixes
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Components of scaling-up
Human resources Wage bill for health care professionals Wage bill for support staff Training
Other inputs Facilities Equipment Supplies Pharmaceuticals
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Annual wage bill required to remove health worker shortage in Africa for 2015
Note: Numbers are based on rounded numbers.
Source: Scheffler et al., 2009 Health Affairs
Doctors($ billions)
Nurses & Midwives($ billions)
Total($ billions)
Need 1.3 2.3 3.6Supply 0.2 0.8 1.0
Incremental Costof additional workers
1.1 1.5 2.6
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Annual wage bill required to remove health worker shortage in Africa for 2015 (millions $US 2007)
Changing the skill mix has the potential to reduce the wage bill costs
Notes: based on 12 non-African low- and middle-income countries with projected shortages in 2015; $1.8bn (USD 2007) shortfall. Preliminary results. Do not cite.
A
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0%
5%
10%
15%
20%
25%
0% 50% 100% 150% 200%
Nurse:Doctor Ratio Increase
Re
du
ctio
n in
Wa
ge
Bill
Sh
ort
ag
e
0.9 0.8 0.7One nurse equals this number of doctors:
Wage bill reduction depends on relative productivity of workers
B
Notes: based on 12 non-African low- and middle-income countries with projected shortages in 2015; $1.8bn (USD 2007) shortfall. Preliminary results. Do not cite.
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0%
5%
10%
15%
20%
25%
0% 50% 100% 150% 200%
Nurse:Doctor Ratio Increase
Red
uctio
n in
Wag
e B
ill S
hort
age
0% 10% 20%Percentage of Needed Nurses Replaced with CHW:
Adding CHW to the skill mix has an even greater potential to reduce wage bill
C
Notes: based on 12 non-African low- and middle-income countries with projected shortages in 2015; $1.8bn (USD 2007) shortfall. Assumes one nurse equals 0.8 doctors. Preliminary results. Do not cite.
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Wage bill shortage is reduced under new skill mix, but varies by country (2007 $USD million)
Country Original New ReductionNepal 88 80 8.3%Djibouti 36 32 12.1%Yemen 119 107 9.7%Papua New Guinea 121 102 15.7%Haiti 26 23 11.0%Solomon Islands 2 2 10.5%Bangladesh 376 342 9.1%Vanuatu 1 1 12.5%Sudan 507 467 8.1%Samoa 3 2 14.4%Indonesia 544 391 28.1%Fiji 4 2 43.9% Total 1,827 1,552 15.1%
Assumes one nurse equals 0.8 doctors, nurse:doctor ratio increases 50%, and 20% of nurses are replaced with CHW. Preliminary results. Do not cite.
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Implications of adjusting the skill mix
Substitute lower skilled workers for higher skilled
Reduce wage billReduce training costsReduce time to scale upNeed to maintain quality
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Learning Objectives
Forecast workforce shortages and surpluses Estimate economic demand Forecast supply using a trendline Estimate requirements using different utilization
measures and controlling for country-level factors Estimate scaling-up costs
Wage bill Training Non-wage bill
Illustrate workforce and wage bill shortages under different skill mixes
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University of California, Berkeley
Global Center for Health Economics and Policy Research (UC Berkeley) publications
Scheffler RM, Liu JX, Kinfu Y, Dal Poz MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” The Bulletin of the World Health Organization 86, 2008:516-523. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf
Scheffler, RM. Is There a Doctor in the House? Market Signals and Tomorrow’s Supply of Doctors. Palo Alto, Calif.: Stanford University Press, 2008.
Scheffler RM, Mahoney CB, Fulton BD, Dal Poz MR, Preker AS. “Estimates of Sub-Saharan Africa Health Care Professional Shortages by 2015,” Health Affairs 28, 2009: w849-w862.
Fulton BD, Scheffler RM, “Health Care Professional Shortages and Skill-Mix Options Using Community Health Workers: New Estimates for 2015,” forthcoming chapter in a book being published from papers selected from The Performance of National Health Workforce Conference, sponsored by World Health Organization, Neuchatel, Switzerland, October 2009.
Scheffler RM, Fulton BD, “Needs-Based Health Workforce Analysis: Methods and Empirical Estimates in Selected African Countries,” forthcoming chapter in HRH in Africa: A New Look at the Crisis, Washington, DC: The World Bank.
Questions?
End of Presentation
Back Up Slides
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Millennium Development GoalsTargets for 2015
1. Halve extreme poverty and hunger2. Achieve universal primary education3. Eliminate gender education disparity4. Reduce child mortality by 2/35. Improve maternal health by 3/46. Halt and reverse the spread of HIV/AIDS7. Adopt national environmental sustainability
policies8. Develop and global partnership for development
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Sample calculations for increasing nurse+midwife:doctor ratio