Estimation, forecasting, and nowcasting of healthcare expenditure based on the SHA 2011 classifications: A methodological guide. Final report

Abstract

Timeliness is a core principle of expenditure data quality, which allows access to information when it is needed. Annual budgeting, identifying needs for course correction of existing policies, or detecting deviation of spending from its intended use are some examples of the benefits of using the results of timely, up-to-date health accounts.

This implies that health accounts must be compiled on a yearly basis, and their results made available in a timely fashion. However, accuracy is also an essential condition for data quality. This means decision-makers may need to wait for audited results or conduct a more exhaustive search for data. When historical statistics are not required, timeliness is particularly relevant. Current practice is to use contemporary data, even when they can be enriched by analysis of past results and historical trends.

This document provides a guide for estimation of health expenditure ahead of time to ensure timeliness of reporting. If necessary, nowcasting can also be used to make up for lags in reporting of data used to generate health accounts. What accounting options are available for such forecasting? What procedures are recommended as standard to ensure timeliness in the results of this process?

Actual figures should always replace short-term projections as soon as the corresponding data become available; however, the forecasting exemplified in this document can provide “expected” values that can contribute to informed decision-making.