This chapter explains the importance and links between regulatory policy, administrative simplification and the improvement of regulatory procedures. It also describes the nature of administrative burdens generated by government procedures and how its measurement contributes to strengthen administrative simplification programmes. It explains the Standard Cost Model as a technique to measure administrative burdens. Finally, it identifies the IMSS procedures analysed in this report and provides a brief explanation of the methodology used to measure burdens. The annex includes a detailed description of the methodology.
Administrative Simplification in the Mexican Social Security Institute
Chapter 1. Introduction to the improvement of procedures in the Mexican Institute of Social Security (IMSS)
Abstract
Regulatory policy, administrative simplification and the improvement of procedures
The creation of a quality regulatory policy is essential for a society’s welfare, market development and environmental wellness (OECD, 2011[1]). This requires that governments and regulatory bodies design policies to achieve the objectives that have been set out, without hampering development or economic growth. Hence, evaluating the regulatory stock is relevant as an essential part of the regulatory improvement process. The consistent elaboration of regulations and rules, the lack of modernisation of the government systems through information and communication technologies (ICTs) and the absence of systematic strategies to review the regulatory stock have brought about an increasing administrative burden of regulations. Therefore, it is very valuable to evaluate and simplify the procedures that citizens and companies have to carry out.
Consequently, administrative simplification is an instrument that fosters innovation, increases entrepreneurship and improves public governance, since it creates more effective tools to implement regulations (OECD, 2009[2]). OECD countries have widely adopted administrative simplification strategies (OECD, 2010[3]), using as one of their guidelines the Dutch experience, which includes the Standard Cost Model (SCM). Developed by the Netherlands, the SCM is a methodology that allows the quantification of administrative burden costs and savings generated by simplification.
The Mexican Institute of Social Security (IMSS) is a public institution in charge of providing social security services for rights-holders, retirees and beneficiaries of the rights-holders and pensioners. This is established by the Social Security Law in its article 2: “Social security aims to warrant the right to health, medical assistance, livelihood protection and social services required for individual and collective welfare, as well as to award a pension that, if applicable and subject to compliance with legal requirements, will be granted by the State”.
This report estimates the savings in administrative burdens the IMSS has generated, for the benefit of citizens and companies, due to the efforts made to improve their procedures between 2012 and 2017, and calculates the potential of additional savings that could be achieved if the strategy of information on digital procedures is intensified and the digitalisation process continues.
The following section covers the concept of administrative burdens and explains the international practices followed to measure them.
Administrative burdens and the Standard Cost Model
The nature of the administrative burdens
The term administrative burden refers to the monetary value of time that citizens and entrepreneurs devote to comply with government procedures, which include filling out formats, gathering documents and other requirements, visiting government offices to inquire about the procedure, and the time needed to make the corresponding payments. The SCM methodology aims to measure the administrative burdens of the regulation in a standardised and cost-efficient manner, and makes it possible to focus administrative simplification and government efficiency efforts on the procedures that imply the greater burdens.
According to the SCM, companies face three types of costs arising from regulations: direct financial costs, compliance costs and long-term structural costs. Administrative costs are included in the compliance costs category (see Figure 1.1). The SCM only considers the administrative burdens companies face due to regulations, which are part of administrative costs.
Figure 1.1. Costs for companies resulting from regulations
Source: (SCM Network, n.d.[4]), International Standard Cost Model Manual, Measuring and reducing the administrative burdens for business, http://www.oecd.org/gov/regulatory-policy/34227698.pdf.
Costs for companies resulting from regulations are the following:
Direct financial costs: Fiscal obligations the government demands to comply with regulations. That is, payment of rights, tariffs or rates users must settle in order to carry out the procedure.
Compliance costs: These are all the costs necessary to comply with regulations. They are divided into two categories:
a. Indirect financial costs: Costs incurred to comply with the procedure requirements; they represent the amount of money with which it is possible to buy the equipment required to stick to regulations. An example of this type of cost is the adaptation of facilities that a company has to do in order to abide by Civil Protection Standards.
b. Administrative costs: These are the opportunity costs for undertaking procedures and are estimated as the lost wages due to the activities carried out in relation to the procedure submission. An example of these costs is the time the legal representative of the company dedicates to fill out the formats required to deliver accounting information reports.1
Long-term structural costs: These are the costs related to structural changes (in activities, human resources and material resources) resulting from regulations. An example of these costs comes up when a threshold defined by a specific number of employees of a company is established, in order to comply with a regulation; thus, companies are stimulated to avoid increasing their size above the threshold, which reduces the size of the average company in the economy and affects its performance.
Regarding administrative costs that users afford to comply with regulations, it is necessary to distinguish between the administrative activities users undertake despite the regulation and those arising from regulatory demands.
To illustrate the difference, consider that the IMSS requests companies to have an electronic signature (e.firma) to carry out procedures on line. Therefore, in order to conduct the procedure Opinion on Compliance with Fiscal Obligations on Social Security Matters 32D (Opinion 32D), it is necessary to have the electronic signature. However, should a situation arise where this procedure is eliminated, the companies would continue to use the electronic signature to comply with procedures related to another government institution. That is, the electronic signature is an administrative cost the user will go on facing, even if the IMSS Opinion 32D procedure is eliminated. On the other hand, if the procedure requested a digital signature other than the e.firma, this would be eliminated upon derogation of the Opinion 32D procedure.
In line with the SCM methodology, the measurement of administrative burdens does not consider the direct financial costs that in this exercise refer to the payment of rights to comply with the regulation.
The calculation of administrative burdens is based on monetising the time devoted by citizens or companies to gather, prepare and deliver the information requested by regulatory authorities. The burdens are estimated building upon the time invested by users in activities required to carry out a procedure – the time to handle the procedure – multiplied by the cost related to the time invested by users based on their profile. The time cost is measured as the salary received by the company’s employee or the salary the citizen does not receive due to the procedure’s fulfilment.
For example, if a company needs authorisation so one of its employees may use the IMSS medical services in a Family Medicine Unit (FMU) other than his/her corresponding unit, administrative burdens derive from monetising the person-hours that the employees had to dedicate to carrying out the procedure. From information gathering and format filling, to visits to the public office, if the procedure is made in-person.
It is safe to assume that employees of the company with different profiles participated in this procedure. Thus, in this hypothetical procedure, if the general director devoted 2 hours to the procedure, the attorney 10 hours, the technical expert 8 hours, the secretary 9 hours, then the administrative burden for the company would be the result of multiplying the salary of each one of these people by each one of the hours invested: (MXN 251)x(2) + (MXN 87)x(10) + (MXN 60)x(8) + (MXN 55)x(9) = MXN 2 347.00. If the company has to fulfil the procedure twice a year and there is a population of 5 000 similar companies, the total administrative burden in the economy generated by this procedure would be MXN 2 347.00 x 2 x 5 000 = MXN 23 470 000.00.
Therefore, the SCM monetarily quantifies the time invested by users in carrying out the procedures and identifies the most burdensome and the reason for it. This facilitates the prioritisation of administrative simplification efforts and the improvement of specific processes.
The SCM is a methodology developed by the Netherlands that has been broadly used in other OECD countries, such as the United Kingdom, Finland and Denmark, among others, to steer their administrative simplification efforts (OECD, 2010[3]). This report focuses on providing useful information to help the IMSS continue implementing actions to simplify its procedures, and thus, in turn, increase the efficiency of its processes and reduce its own costs, as well as the costs for regulated citizens.
Administrative activities to measure burdens
The SCM is a qualitative technique that considers the total time regulated subjects spend in the fulfilment of the procedure, in order to calculate administrative burdens. Consequently, it divides the fulfilment of the procedure into a range of measurable steps, known as standard activities. The model assumes that any person performs such standard activities in relation to all types of procedures and, as a result, it makes it possible to use the method in different countries and government levels, either in procedures that depend on a set of regulations or in a specific sector. Table 1.1 contains a list of standard activities used in this report.
When information on procedures users is gathered, it is necessary to ask them how much time they spend on each of the activities included in Table 1.1, in order to measure administrative burdens.
Therefore, the SCM helps measure the administrative consequences for users derived from the procedures and is currently the method most used for that purpose.
Table 1.1. Standard administrative activities
* Only measured in business procedures.
Source: Adapted from SCM Network (n.d.[4]), International Standard Cost Model Manual, Measuring and reducing the administrative burdens for business, http://www.oecd.org/gov/regulatory-policy/34227698.pdf.
Benefits and scope of the MCE
The SCM measurements reveal the areas of the procedures in which it is possible to reduce administrative burdens. Given the orientation of the results, the SCM provides a baseline and is a source of simplification opportunities.
Adopting the SCM in the simplification process offers several advantages:
It emphasises the elements of the regulation whose compliance is most cumbersome for users and identifies the total cost of administrative burdens.
Measuring one baseline reveals where administrative burdens are generated during the companies’ processes and shows where simplification can have more impact.
Simplification efforts can be efficiently targeted classifying the sources of administrative burden and identifying which department/ministry is responsible of the burdensome regulation.
The information gathered allows simulating how changes in regulation and procedures can affect the costs for users.
The SCM can foster the exchange of data between government institutions.
The SCM focuses on offering a simplified and coherent methodology to calculate the administrative burdens government regulations impose on users. Such methodology adopts a pragmatic approach to measurement and offers coherent estimates in several areas of policy. Nevertheless, although the SCM offers advantages for the measurement of administrative burdens, it also has limitations. Box 1.1 contains a brief discussion on the scope and limitations of the SCM.
Box 1.1. Scope and limitations of the SCM
Although the SCM has advantages as a tool for administrative simplification, it also has limitations. The following is an analysis in this regard:
What are the benefits of measuring administrative burdens, especially when the most burdensome formalities are already known?
The SCM allows to: 1) identify why each procedure is burdensome for users, and 2) identify the best, more adequate and high-priority administrative simplification strategy.
Is the measurement of the SCM statistically significant or does it consider representative samples of procedure users?
The SCM is considered a qualitative and pragmatic exercise, with a methodology that is sufficiently solid to perform an approximate measurement of the administrative burdens that procedures generate for users. The SCM’s methodology is not based on statistically representative samples of regulated subjects. In terms of costs, such an exercise would be very burdensome for the government.
Instead, the SCM methodology clearly identifies the groups of users of the formalities or services and, gathers information from them through surveys or focus groups. It identifies those who carry out the activities required to comply with the procedure within a reasonable period, that is, not very quickly nor very slowly (see below the section “Stage 2: Gathering and standardisation of data related to time and costs” of the SCM methodology).
Does the SCM measure all costs resulting from the regulation, including the opportunity cost for the users due to the time spent waiting for an official answer?
No, the SCM exclusively focuses on administrative burdens that are generated at the time of fulfilling the procedure; that is, on the time devoted to paperwork, information gathering and similar activities. There are alternative methodologies to measure other costs arising from regulations (OECD, 2014[5]).
Some OECD countries, such as Portugal (see Box 5.1), include as part of the total cost of the procedure the cost related to waiting for an official answer, also known as “opportunity cost”. However, such cost cannot be considered an administrative burden; it is the difference between the profits the company would obtain if it could receive the official government answer in less time or within the officially established time, and the profits it receives when it has to wait longer. Since profits depend on the capital return of the company, they differ between companies and depend on several assumptions, which complicates the measurement of the opportunity cost (OECD, 2014[5]).
Is it absolutely necessary to gather information from regulated subjects on the procedures to measure administrative burdens?
The basic principle of the SCM is identifying the factors that make a procedure burdensome for users. Therefore, one of the most reliable sources to gather the required information is the regulated subjects themselves. Nevertheless, the OECD recommends the following:
Governments must quantify administrative burdens and set quantitative goals for its reduction, before launching the project or during the process. However, quantification must be used cautiously considering efficiency. Qualitative methods, especially those that analyse inconvenience costs, must complement quantitative methods in order to focus efforts more adequately (OECD, 2010[3]).
The international experience of jurisdictions such as the European Commission and the United Kingdom shows that a measurement of the administrative burdens of all procedures – known as baseline – can be very burdensome. Therefore, it would be ideal to target efforts on priority processes or sectors to simplify.
Once public administrations have a background of critical information on administrative burdens based on the data gathered by users, some jurisdictions —such as Australia, the European Commission and the United Kingdom— choose to use such information to estimate the administrative burdens of other current or future procedures, as part of the Regulatory Impact Analysis exercise.
In contrast, in contexts such as the Czech Republic, where administrative burdens were measured only with information provided by public servants, the reliability of the data is a dilemma (OECD, 2010[3]).
International experience shows that many countries have diverged from the methodology as established in the SCM Manual. Are these measurements valid?
The OECD report Why Is Administrative Simplification So Complicated (OECD, 2010[3]) documents the administrative burdens reduction programmes undertaken by its member countries. Most of them implemented adaptations of the SCM methodology, whose differences in relation to the original methodology responded to national priorities, efficiency criteria or limitations as to available data. Although these differences complicate the international comparison of administrative burdens measurements results, the basic goal in each case was to target administrative simplification efforts on achieving the desired administrative burdens reductions, generally of 20%-25% of the total burdens.
The OECD also recommends its member countries to evaluate regulatory improvement policies to determine their impact and efficiency (OECD, 2012[6]); the OECD countries have the task of implementing the corresponding evaluations with the purpose of verifying if administrative burdens reduction programmes achieved their goals and if they require modifications to increase their efficiency and effectiveness.
Source: (OECD, 2014[5]), OECD Regulatory Compliance Cost Assessment Guidance, http://dx.doi.org/10.1787/9789264209657-en; (OECD, 2010[3]), Why Is Administrative Simplification So Complicated?: Looking beyond 2010, Cutting Red Tape, http://dx.doi.org/10.1787/9789264089754-en; (OECD, 2012[6]), Recommendation of the Council on Regulatory Policy and Governance, http://dx.doi.org/10.1787/9789264209022-en.
The procedures in the Mexican Institute of Social Security
The IMSS procedures aim mainly at rights-holders that benefit from health services and/or that receive social security benefits or at companies that must comply with the regulations to register their employees as rights-holders. The IMSS is throughout the national territory, offering services in 283 hospitals and 1 129 Family Medicine Units (FMU) distributed in 35 regional delegations, as well as 3 718 IMSS-Prospera medical units. Additionally, it has 4 vacation centres, 1 367 day-care centres, 17 funeral homes and one Convention Unit at the Nacional Medical Center Siglo XXI, among other facilities.
This report measures the administrative burden of 87 procedures with its modes, selected by the IMSS through its administrative co-ordinations in March 2017. The 87 selected procedures grouped by co-ordinations are enlisted in Table 1.2. Table 1.4 shows the procedures complete with their name and code.
Table 1.2. Total of selected procedures to measure administrative burdens by co-ordination at the IMSS
It is important to mention that this exercise does not include all of the IMSS procedures, but only those proposed by the Normative Co-ordinations in several meetings with the OECD. On the other hand, some of them might not be valid and other digital procedures may have been released at the time of publication of this report.
Currently, rights-holders and/or companies can request IMSS services in four modes:
In-person (visiting one of the offices or medical facilities)
Through the Online (at the IMSS website: www.imss.gob.mx)
Through the mobile application downloadable free of charge on any smartphone.
Through the IMSS Call Centre.
Not all 87 selected procedures may be submitted in all modes. Currently some procedures can be carried out in all existing modes (for example, the Medical Appointment at the first level) and other procedures can only be submitted in one mode (for example, Opinion 32D, that is only submitted via the Online) or Request for a retirement, unemployment at an advanced age or at old age pension (which is only delivered in-person with physical formats at the IMSS service desks).
Table 1.3. Summary of IMSS procedures by submission mode
Number of procedures and their modes by administrative co-ordination
Note: Information submitted considering as the universe only the 87 procedures proposed by the IMSS.
In the last year, the digitalisation of IMSS procedures gained momentum; however, there are still many formalities that can only be carried out in person. Table 1.3 shows a summary of the progress in this digitalisation. Out of the 87 procedures analysed, 86 can be submitted in the in-person format, and one is submitted exclusively through the Online (Opinion 32D). Of all the procedures that were analysed, 31 can be fulfilled through the Online and three through the mobile application. Table 1.4 includes detailed information on each procedure.
Table 1.4. IMSS procedures by submission mode
Available modes
Methodology used to measure administrative burdens
This report provides the results of the measurement of administrative burdens generated by IMSS procedures, through an adaptation of the SCM. Table 1.5 includes a summary of the methodology used, based on the SCM. Annex 1.A. includes a broader section on methodological aspects.
Table 1.5. Summary of the methodology used to measure administrative burdens
Reader’s roadmap
Figure 1.2. offers a reader’s road map on the results included in this report, which considers 2017 figures that served as the basis to identify the administrative burdens of IMSS procedures, included in Chapter 2. This digitalisation generates savings in administrative burdens that have benefited users. Chapter 3 includes the estimation of these savings. Chapter 4 contains estimations of the potential additional reduction of these burdens the IMSS could achieve should it continue promoting the use of digital formalities, as well as the simplification and digitalisation of additional procedures.
It is worth highlighting that, to date and during the execution of this report, the IMSS continued working on such simplification and digitalisation processes.
Figure 1.2. Roadmap of the results of this report
Summary of the key messages included in this chapter
The consistent elaboration of regulations and standards, the little use of information and communication technologies (ICTs) in government systems and the absence of systematic strategies to review the regulatory stock have brought about an increasing administrative burden of regulations. Therefore, the evaluation and simplification of procedures that citizens and companies have to carry out are very valuable.
The term administrative burdens refers to the monetary value of the time devoted by citizens and entrepreneurs to comply with government procedures, which include filling out formats, gathering documents and other requirements, visiting government offices to inquire about the procedure, and the time needed to make the required payments.
The SCM is a methodology that aims at measuring the administrative burdens of regulations in a standardised and cost-efficient manner, and makes it possible to address administrative simplification and government efficiency improvement efforts to the procedures that imply the greater burdens.
The calculation of administrative burdens is based on monetising the time devoted by citizens or companies to gather, prepare and deliver the information requested by regulatory authorities. Burdens are estimated building upon the time invested by users in activities required to carry out a procedure —the time to handle the procedure— multiplied by the cost related to the time invested by users based on their profile. The time cost is measured as the salary received by the company’s employee or the salary the citizen does not receive due to the procedure’s fulfilment.
Therefore, the SCM monetarily quantifies the time invested by users in carrying out the procedures and identifies the most burdensome and the reason for it. This facilitates the prioritisation of administrative simplification efforts and the improvement of specific processes.
This report measures the administrative burdens of 87 IMSS procedures. IMSS rights-holders or companies can currently submit their procedures or requests for services using four modes: in-person in one of the offices or medical facilities, through an Online portal, through a mobile downloadable free of charge on any smartphone or through the IMSS Call Centre.
Of all analysed procedures, 86 can be carried out in person, 31 through the Online and three through the mobile application.
504 surveys were applied to users of 28 of the 87 procedures, to measure administrative burdens and the handling time invested in carrying out the procedure. Administrative burdens were calculated using the information gathered as well as qualitative and quantitative techniques.
References
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[13] INEGI (n.d.), Encuesta Nacional de Ocupación y Empleo (ENOE), población de 15 años y más de edad, http://www.beta.inegi.org.mx/proyectos/enchogares/regulares/enoe/ (accessed on 31 May 2018).
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[1] OECD (2011), Regulatory Policy and Governance: Supporting Economic Growth and Serving the Public Interest, OECD Publishing, http://dx.doi.org/10.1787/9789264116573-en.
[3] OECD (2010), Why Is Administrative Simplification So Complicated?: Looking beyond 2010, Cutting Red Tape, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264089754-en.
[2] OECD (2009), Indicators of Regulatory Management Systems - OECD, http://www.oecd.org/regreform/indicators-rms.htm (accessed on 2 August 2017).
[10] Perez, L. (2017), Principal Component Analysis to Address Multicollinearity, https://www.whitman.edu/Documents/Academics/Mathematics/2017/Perez.pdf (accessed on 24 August 2018).
[4] SCM Network (n.d.), International Standard Cost Model Manual, http://www.oecd.org/gov/regulatory-policy/34227698.pdf (accessed on 2 August 2017).
Annex 1.A. Stages of the administrative burdens measurement in line with the Standard Cost Model (SCM) Manual
This section explains the stages and the steps required to measure administrative burdens in line with the SCM Manual guidelines, as well as adaptations made for each step for the purposes of this report. Annex Table 1.A.1. contains a summary of such stages and steps.
Annex Table 1.A.1. Stages and steps of the SCM
Source: Adapted from SCM Network (n.d.), International Standard Cost Model Manual, Measuring and reducing the administrative burdens for business, http://www.oecd.org/gov/regulatory-policy/34227698.pdf.
Stage I. Preparatory analysis
This stage includes the analysis leading to the information gathering and administrative burdens estimate stages. It identifies the procedures to be analysed and shows the strategy used to gather information on how to comply with such regulation. The information collected in this stage was used to define the scope of the recommendations.
First of all, the IMSS already had a procedures inventory, therefore it was not necessary to define regulations or to identify the procedures arising from them. Instead, the procedures considered by the IMSS as relevant in terms of burden measurement were identified. Chapter 3 shows the list of procedures and the unit responsible for each one of them. The procedures are identified through the code granted by the (National Commission of Regulatory Improvement – CONAMER, previously COFEMER).
The OECD identified 182 IMSS procedures subject to cost calculation, aimed at rights‑holders, employers (companies) and the general public. During this process, the IMSS proposed that the cost calculation focused on 87 procedures, set out by each of the responsible areas.
This stage consisted in interviewing public servants in charge of the 87 procedures proposed by the IMSS with the purpose of gathering detailed information to select a sample that would be measured using direct surveys with users. The information provided by users would then be used to select a group of procedures that would represent the proposed universe and would help measure the burden of the remaining procedures.
Step 1. Identification of information obligations, data requests and administrative activities
This review estimates the total or unitary burden of 87 procedures distributed in 10 units or co-ordinations, based on Annex Table 1.A.2. Table 1.4 shows a complete list of the procedures by name and code.
Annex Table 1.A.2. Total procedures to measure by IMMS administrative unit
Box 1.A.1 contains the definitions of information obligations, data requirements and administrative activities in line with the SCM methodology. Using these definitions, the decision was made to use IMSS procedures as an equivalent to information obligations. Thus, the report would focus on administrative burdens imposed by IMSS procedures to their regulated subjects and/or users.
Annex Box 1.A.1. Definition of information obligations, data requirements and administrative activities
Information obligations: These are the requirements arising from regulations that imply providing information and data to the public sector or to third parties.
Data requirements: Each information obligation consists of one or more data requirements. The term data requirement means each information item that must be provided when complying with an information obligation (IO).
Administrative activities: Several specific activities have to be performed in order to deliver pertinent information for each data requirement. The SCM calculates the costs involved in carrying out each activity. The following figure shows the SCM’s basic structure:
Annex Figure 1.A.1. Basic structure of the SCM
Source: Adapted SCM Network (n.d.), International Standard Cost Model Manual, Measuring and reducing the administrative burdens for business, http://www.oecd.org/gov/regulatory-policy/34227698.pdf.
Based on the definitions provided by the SCM methodology, data requirements were identified from the information that the IMSS requires from its users to carry out each one of the procedures, which includes attached documents.
Once the data requirements were identified, the following task was to categorise the administrative activities that users must perform to fulfil such requirements. Finally, the former will be validated during the interviews with employers (companies), rights-holders and citizens described in step 11. The administrative activities used for this report are included in Annex Table 1.A.3.2
Annex Table 1.A.3. Standard administrative activities for procedures handling
* Only measured in business procedures.
Source: Adapted from SCM Network (n.d.), “International Standard Cost Model Manual, Measuring and reducing the administrative burdens for business”, http://www.oecd.org/gov/regulatory-policy/34227698.pdf.
The identification of administrative activities aims at helping understand the process users must follow for each formality. The burden of each procedure is estimated based on the time users devote to these standard activities.
Step 2. Identification of related regulations
When analysing any standard cost calculation it is important to clarify if the administrative costs of an information obligation or data requirement are attributable to one or more regulations. If administrative costs are attributable to two or more regulations, it is essential to warrant that they are counted only once, as long as they do not have to be delivered twice or more times. This means avoiding double counting if the institution indeed registers information and does not request it for other procedures.
In this particular instance, the request for information or data for each procedure is already handled by the IMSS, which is why a simplification and digitalisation process in a shared platform could have great benefits.
Step 3. Classification of information obligations by type
To have a better perspective on the origin of costs, procedures can be classified according to their condition (for example: mandatory, inherent to specific circumstances or voluntary), or else, according to its function (for example: complaints, notifications, requests, etc.). Identifying the possible classifications of procedures makes it possible to select those that will be directly measured through surveys for users and, consequently, will be more adequately measured drawing on quantitative techniques for the remaining procedures.
At the IMSS, most procedures are associated with requests for the services it provides; therefore, they can be considered inherent to specific or voluntary circumstances, with the exception of business procedures.
Step 4. Identification of relevant business segments
When the regulation that creates a procedure identifies specific characteristics of the companies that must carry it out, it is advisable to determine the relevant business segment for a better measurement of the costs. This would be the case when dealing with regulations that only apply to small and medium companies and/or non-profit organisations. However, these clarifications impose a cost on the project in financial terms and in time, since identifying in greater detail the burden requires more information, time and investment.
This report measures administrative burdens without distinction in terms of the size or the type of the applicant company, since differences in salary already include a specific for such distinctions. The purpose is to establish a baseline to follow up on the simplification and digitalisation efforts. On the other hand, the exercise does distinguish between procedures addressed to the industrial sector and those focused on citizens (see step 7).
Step 5. Identification of the population, rate and frequency
In step 5 it is necessary to define the following concepts:
Identify the population for each procedure
Establish the compliance rate for each procedure
Determine the frequency of submission of requests for each procedure
Each regulation or procedure has a population that shows how many companies and/or citizens are affected by it. In this case, the population means the users that must comply with the procedures or who request IMSS services.
In this report, population refers to the number of requests submitted to the IMSS during 2017 for each one of the selected procedures, through different modes (in-person, Online, telephone and/or mobile application).
Frequency indicates how many times a year must the procedure be fulfilled. In some occasions, frequency can be figured out based directly on the regulation. For example, companies pay employer-employee contributions every month through the Referenced Payments System (SIPARE). As to citizen procedures or procedures arising from IMSS services, frequency is a non-relevant concept, since these services are requested at the convenience of rights-holders.
With regards to the IMSS, what was measured was the number of procedures submitted by users and handled by the IMSS during 2017. The advantage of this metric is that it outlines more precisely the reality about IMSS administrative burdens, since it considers the procedures that were actually carried out. Its disadvantage is that it does not identify the compliance rate, that is, the IMSS effectiveness or capacity to make companies comply with the regulation to which they are subject, in relation to business procedures.
Step 6. Interviews with companies and citizens versus expert evaluation
According to the SCM Manual, in order to decide on the method to identify administrative burdens, it is necessary to specify the criteria: for example, interviewing the users of the procedures, using expert evaluation, among others.
The methodological foundation to identify administrative burdens at the IMSS was to gather information in direct interviews with companies and citizens. The interview intends to obtain information on the users’ experience, in terms of the time devoted to comply with procedures to accede to services or comply with regulations (handling time). Afterwards, the handling time would be multiplied by the opportunity cost of each user participating in the procedure.
Surveys were administered considering a sample of pre-defined procedures (Group 1: Procedures through surveys) in order to gather relevant information that allows to: 1) measure the average handling time of each procedure in this set and 2) estimate the time of those procedures that were not selected to carry out interviews (Group 2). The estimation and identification of time of Group 2 used qualitative methods (Subgroup 2.1: Similar procedures) and quantitative means (Subgroup 2.2: Independent procedures). See Annex Figure 1.A.2 for the classification of procedures according to the measurement method of administrative burdens. These methods are explained in the Stage 3 section.
Annex Figure 1.A.2. Procedures classification, according to the method used to assign the administrative burden
The selection of procedures through surveys (Group 1) focused on collecting information on all types of processes, units, formats, etc., present in the IMSS’ operational process. The following are the criteria used to select such procedures.
Administrative unit.
Type of applicant:
Citizen.
Company.
Requirements according to the procedures catalogue.
Type of procedure:
Request.
Notice.
Opinion.
Certificates.
Registration.
Authorisation.
Affiliation.
Services.
Representative procedures of each subgroup by similarity.
The process to select procedures subject to a collection through interviews accounted for 30 procedures for Group 1. As a result, in Group 2, the total procedures subject to an extrapolation process would be 57.
During the interviewing process, it was not possible to gather information on two procedures since no users were identified. Hence, Group 1 procedures amounted to 28. Annex Table 1.A.4 shows the burden measurement plan, according to the methodology type.
Annex Table 1.A.4. Burdens measurement plan according to the methodology type
Annex Table 1.A.5 shows the distribution of procedures selected to be directly measured according to the administrative unit.
Annex Table 1.A.5. Procedures to analyse through direct users surveys (Group 1)
Another important factor to consider is that the IMSS has four channels to submit a procedure: in-person, Online, mobile application and telephone. However, not all channels are available for all procedures, since the IMSS digitalisation strategy has progressed gradually. Nevertheless, information was gathered in each one of the existing modes for the 28 procedures whose cost was estimated through interviews. This is important because it allows information on each submission channel for the extrapolation process.
Step 7. Identification of pertinent parameters to calculate costs
To estimate the administrative burden of each procedure it is necessary to be aware of the time companies, citizens or rights-holders dedicate to comply with standard activities – the handling time – and identify the internal and external costs of such time, plus the material inputs exclusively used to carry out procedures.
Internal handling time costs refer to the average salary paid to the company’s staff and the opportunity cost for the citizens who undertake the standard administrative activities included in step 1. In both cases – citizens and companies users – it is essential to include the handling time of all people participating in the execution of the procedure, which will be multiplied by the salary or opportunity cost of each profile.
The IMSS users or obligated subjects can be employers (companies), rights-holders or citizens, so it is important to mention that the universe of procedures was divided in this first category to locate the cost.
Regarding business formalities, the staff who would potentially work on managing them was classified in four categories, based on information provided by the National System of Occupations Classification (SINCO)3 and the general average salary per hour of all economic sectors for the first quarter of 2018 (see Annex Table 1.A.6).
Assistant workers in administrative activities
Technicians
Professionals
Managers
In contrast, for citizen procedures several salaries or opportunity costs were identified, based on the profile of the people who could use each one of the IMSS services.
Workers
Pensioners
General population
Students of all educational levels
Professionals
People with unremunerated employment
General physicians and specialists, internal and external to the IMSS
Resident doctors
Nurses and assistants
Dentists
People who do not study nor work
Economically active population
Annex Table 1.A.6 shows the profiles of IMSS procedures users, as well as the income or opportunity costs per minute. It is worth mentioning that each procedure has a different salary composition that depends on the target population. In several procedures, aimed at the users of IMSS services, salaries must take into consideration their condition: whether they are active workers, pensioners or beneficiaries. Also, users’ age is considered according to the target population of each procedure. For example, the medical appointment procedure takes into account not only age and educational level, but also the role of the worker, pensioner or beneficiary to determine the specific opportunity cost.
Importantly, all opportunity costs are weighted considering federative state and educational level of IMSS rights-holders, except where users are part of a specific group, such as physicians external to the IMSS or dental surgeons.
Salaries were obtained mainly from the ENOE for the second quarter of 2018, according to the SINCO catalogue, whether it is by specialty (physicians) or by level of responsibility (position in the company). As far as students are concerned, the proposed opportunity cost is the average expense in education, which would not be of benefit for them since they are not in school. Finally, unremunerated salary was obtained from the INEGI estimations of unremunerated work in households. All salaries are current or updated to the first quarter of 2018. Regarding pensions, data was extracted from the ENIGH for IMSS pensioners.
Income or opportunity cost per hour (or fractions) of each type of employee as to business formalities, or user as to IMSS services, will be used to multiply it by the hours this user devoted to procedure handling. For example, in case surveys’ findings indicate that in a normally efficient company (see step 12 for the definition of a normally efficient company) the general director devotes two hours to a specific procedure, the attorney dedicates 10 hours, the technician 8 hours and the secretary 9 hours, the administrative burden for such company would be (MXN 251)x(2) + (MXN 87)x(10) + (MXN 60)x(8) + (MXN 55)x(9) = MXN 2 347.00.
Annex Table 1.A.6. Salary or opportunity cost per minute per occupational profile
Pesos per minute to the first quarter of 2018
Source: Elaborated by the OECD based on the ENOE, 1st. trimester 2018, available in INEGI (n.d.), “Encuesta Nacional de Ocupación y Empleo (ENOE), Population de 15 años y más de edad”, http://www.beta.inegi.org.mx/programas/enoe/15ymas/ (consulted 20 July 2018); INEGI (2011), “Sistema Nacional de Clasificación de Ocupaciones 2011, SINCO”, http://internet.contenidos.inegi.org.mx/contenidos/Productos/prod_serv/contenidos/espanol/bvinegi/productos/metodologias/est/sinco_2011.pdf (consulted 20 July 2018).
As far as external costs are concerned, the survey gathered information on the cost of consulting, agency or any other type of professional services the user has deployed to carry out the procedure.
Finally, acquisitions refer to the purchase of materials —software, USB sticks, standard formats with a cost— the user must buy and which are exclusively utilised to undertake the procedure. In the analysed procedures no purchase of materials of this kind was detected.
Step 8. Elaboration of the questionnaire for the interview
The purpose of using a questionnaire for the interview is to warrant that data will be gathered in a uniform, coherent and exact manner that ensures all information to be used for calculation purposes is collected as accurately as possible.
It is also important to structure the interview questionnaire in such a way that the interviewees can answer questions as precisely as possible, allowing for an efficient interview.
This report used an updated version of the questionnaire the OECD has deployed in similar projects in Mexico, which was in turn elaborated with the support of British consultants (OCDE and Secretaría de Economía, 2009[7]). The questionnaire was reviewed and adapted based on the advice of professional interviewers, seeking to improve data gathering, considering their adaptation using mobile electronic devices for such task.
The information requested in the survey pretends to measure the time applicants invested in carrying out the standard activities required to fulfil the procedure, as well as their perception regarding the hardship to carry it out.4 The data requested in the questionnaire is the following:
Number of employees involved in each procedure activity.
Position of the employee(s).
Time devoted to each activity (in hours).
Use of external staff to carry out the procedure.
Number of times the procedure was fulfilled the previous year.
Procurement of assets or other goods arising from the procedure’s request.
Level of difficulty perceived by the interviewer.
According to the suggestions included in the SCM Manual, pilot tests were integrated to the questionnaire in order to make adaptations and incremental modifications and ensure gathering adequate results.
The questionnaire administered to entrepreneurs and users of procedures is included in Annex 1.B.
Step 9. Expert review of steps 1-8
At this stage, the SCM Manual suggests reviewing the steps indicated in Stage 1. The Manual assumes that Stage 1 is implemented by consultants – OECD experts in this case.
Stage 2: Gathering and standardisation of data related to time and costs
Step 10. Selection of representative companies and citizens to be interviewed
This step consists in selecting the companies and citizens that would be interviewed with surveys, based on the profile of each formality. Initially the procedures were classified according to the type of user (companies and rights-holders) involved in fulfilling this goal.
On the basis of this classification it was possible to locate companies that had performed the IMSS business procedures, that is, any micro or small company with employees registered in the social security regime.
As to rights-holders procedures, administering surveys at the MFU and other IMSS facilities was planned, seeking to identify in situ the users of each procedure and mode.
The exercise proposed that the selection of the MFUs and facilities where surveys would be conducted should generate information including a broad spectrum of the IMSS population. For cost and effectiveness reasons, it was decided to administer surveys in Mexico City and surrounding states (see Annex Table 1.A.7 and Annex Table 1.A.8 for a list of locations). This means that for the same procedure interviews were performed at MFUs in Mexico City and other federative entities preselected with less population. In subsequent exercises, the IMSS could extend the use of surveys to other states, in order to obtain regional estimates of administrative burdens and thus define if the prioritisation of administrative simplification actions varies according to the region.
At the international level, the implementation of the SCM suggests gathering six surveys per procedure or per regulation to identify the normally efficient subject. In the IMSS case, the proposal was to conduct eight interviews in Mexico City for each selected procedure. Additionally, for a subgroup of procedures eight additional interviews would be carried out for each one of them in cities with 200-250 thousand inhabitants. The purpose of this differentiation was to determine if there were any differences between the MFUs in big and medium-sized cities.
To define Mexico City’s MFUs, a geographical and demographical approach was the first to be reviewed. First, to broaden the rights-holders spectrum and to maximise the possibility of identifying the users of each selected procedure. The municipalities selected to visit the MFUs are shown in Annex Table 1.A.7.
Annex Table 1.A.7. IMSS facilities in Mexico City
The states selected to conduct the survey were the State of México, Hidalgo, Puebla and Querétaro, due to their closeness to CDMX. However, the selected cities would have a population of 200-250 thousand inhabitants to contrast with the level of attention provided in CDMX. The criteria used to select the MFU in such states were the same applied in Mexico City. Annex Table 1.A.8 lists the IMSS facilities located in cities within the specified population range.
Annex Table 1.A.8. IMSS facilities in selected states
Finally, the list of FMU and facilities that were visited to perform the surveys are included in Annex Table 1.A.9 and Annex Table 1.A.10.
Step 11. Interviews with companies and citizens
Professional interviewers conducted the interviews during the first half of 2018, in person at the IMSS facilities. In line with the SCM Manual, personal interviews are the most adequate method to identify the administrative costs imposed by procedures. For the 28 selected procedures to measure through direct surveys, a total of 506 interviews were performed, 314 in Mexico City and 192 in cities with a population of 200-250 thousand inhabitants in the previously mentioned states; when estimating the burden not all interviews were taken into consideration, only those that complied with the normally efficient company criterion. The surveys gathered by procedure are included in Annex Table 1.A.11.
Annex Table 1.A.9. Medical facilities visited during the collection of information stage
Mexico City
Annex Table 1.A.10. IMSS facilities visited during the collection of information stage
Cities in states between 200 thousand and 250 thousand inhabitants
Annex Table 1.A.11. Surveys conducted to measure unitary burdens
Step 12. Implementation and standardisation of time and resources estimates for each segment
This stage included estimating the average handling time a rights-holder or a normally efficient company would dedicate to each directly measured procedure. The inputs were the time registries devoted by the company’s employees that contributed to the implementation of the procedure.
According to the SCM Manual, the estimation of the standard time is an exercise based on the normally efficient company notion, that seeks that time devoted to a procedure activities has a relative convergence throughout the surveys. This convergence is qualitatively evaluated, since the methodology does not pretend that the information has statistical significance.5
Evaluating the users or normally efficient companies helps establish a common parameter and eliminate special instances. Considering again the license to commercialise telephone services, the document refers to companies that dedicate a similar amount of time to gather the requirements and deliver the procedure. The extreme examples of companies that dedicate more time, or very little time, are excluded from the analysis.
Annex Table 1.A.11 includes a list of the findings used to calculate the average handling time and the findings eliminated because they do not coincide with the normally efficient company criterion. That is, it shows, for each analysed procedure, the total number of surveys gathered, as well as those that comply with the normally efficient company criterion and those that do not comply with it.
Step 13. Expert review of steps 10-12
Professional interviewers carried out Steps 10 and 11. The OECD continuously followed up on their work and reviewed the results obtained in meetings and through consistent communication monitoring progress. The OECD, in partnership with the professional interviewers, carried out step 12.
Stage 3: Calculation, outreach and reports
Annex Figure 1.A.3 shows the groups in which the 87 procedures were classified in line with the administrative burden estimation method. These methods are explained in the following steps.
Step 14. Estimation and extrapolation of validated data
In general terms, administrative burdens by procedure are measured multiplying the handling time by the salary or opportunity cost. However, the population of IMSS procedures users includes several profiles: active and pensioner rights-holders, active and pensioner beneficiaries, the general population, etc., which forces to include different salaries or opportunity costs when calculating burdens. Additionally, the classification by procedures groups shown in Annex Figure 1.A.3, required establishing specific formulae for each procedure. Annex Table 1.A.12 includes the specific formulae used to calculate the unitary administrative burden of each procedure, still based on multiplying the handling time by the salary.
Annex Figure 1.A.3. Procedures classification, according to the method used to assign administrative burdens
Notes: Besides the 13 procedures included in Subgroup 2.2, the SIPARE (in the in-person mode) and the IMSS-02-025-A (in the mobile application mode) were estimated following the statistic method. However, their counterparts in Online for the SIPARE and the in-person mode for IMSS-02-025-A were estimated through interviews (Group 1).
To determine a quantitative method (econometric estimation) or a qualitative method (procedures by similarity), each procedure was studied considering information requirements. The purpose was to assign costs as accurately as possible, comparing the general results of the econometric estimation against the similarity of two procedures. In brief, if the number and type of information of two procedures coincided at least 85%, the qualitative method was selected, since the econometric estimation has an 85% predictive power (see sub-step 14.2.2 below).
Annex Table 1.A.12. Formulae to calculate the unitary cost of each procedure
Notes: The IMSS-01-029-B procedure considers the widow/widower pension, which is defined as 40% of the disability pension. The disability pension represents 70% of the not married rights-holder; therefore, the widow/widower pension represents 28% of the normal pension.
The procedures’ names are included in Table 1.4.
Where:
CU=Unitary cost
GB=Public Expenditure per Student in High School Education
GP= Public Expenditure per Student in Primary Education
GPrees= Public Expenditure per Student in High School Education
GS= Public Expenditure per Student in Higher Education
GSec= Public Expenditure per Student in Secondary Education
P10B15= Share of Beneficiaries 10-15 years old
P10T15= Share of Rights-holders 10-15 years old
P15B18= Share of Beneficiaries 15-18 years old
P15T18= Share of Rights-holders 15-18 years old
P18B25= Share of Beneficiaries 18-25 years old
P18T25= Share of Rights-holders 18-25 years old
P25T60= Share of Rights-holders 25-60 years old
P5T60=Share of Rights-holders 5-60 years old
P60V=Share of Widows under 60 years of age
P6B=Share of Beneficiaries under 6 years of age
P6B10= Share of Beneficiaries 6-10 years old
P6T=Share of Rights-holders under 6 years of age
P6T10= Share of Rights-holders 6-10 years old
PB=Share of IMSS Beneficiaries
PEA= Economically Active Population
PIDE=Share of Available Income for the Wife= (Share of Income of the Worker-Fixed Household Costs)/2
PPEA= Share of Economically Active Population
PPNEA= Share of Non-Economically Active Population
PT=Share of IMSS Rights-holders
PT60= Share of Rights-holders over 60 years of age
PTC=Share of Married Rights-holders
PTNC=Share of Not Married Rights-holders
PV60= Share of Widows over 60 years of age
TCD =Directly Cost-calculated Time
TD= Directive Time
Te = Estimated Time
TP=Professional Time
TS= Technical Time
TT= Technical Time
WAEIMSS=IMSS Nursing Assistant Salary
WD= Directive Salary
WDC=Dental Surgeon Salary
WGral =General Weighted Salary
WME=Specialised Physician Salary
WMEIMSS=IMSS Specialised Physician Salary
WMG= General Medical Salary
WMGIMSS= IMSS General Doctor Salary
WMRIMSS= IMSS Resident Doctor Salary
WNN= Person who neither Study nor Work Salary
WNR =Unremunerated Work Cost
WP=Professional Salary
WPC=Married Rights-holder Pension=Weighted General Pension + 15% supplement for spouse
WPD=Disability Pension=70% of the Unmarried Rights-Holder Pension
WPEA=Economically Active Population Salary
WPNC=Unmarried Rights-Holder Pension
WPNEA=Non Economically Active Population Salary
WS=Secretarial Salary
WT=Technical Salary
The unitary cost does not take into consideration the transportation cost to and from rights-holders assistance offices. Also, even though all procedures are free of charge, the IMSS has a portfolio of services it offers with financial charges to the general public. These costs are not considered in the measurement.
Annex Table 1.A.13 contains the calculation formulae used to estimate the unitary cost of each procedure, when these do not follow the same criteria of the in-person format or when there was no information available because the procedure was eliminated. As may be seen, the formats for three procedures already eliminated and are not available in a digital formats. In another procedure (IMSS-02-096), the digital version was extrapolated from a similar procedure (SIPARE) and the in-person format was calculated according to an estimation described in the previous table.
The method used to calculate the unitary administrative burden for each group of procedures is explained below.
Annex Table 1.A.13. Formulae to calculate the population by procedure
Digital procedures (When are different to the in-person format)
Sub-step 14.1. Calculation of unitary administrative burdens of procedures through surveys (Group 1)
The 28 procedures carried out through surveys (Group 1) were selected aiming at identifying representative procedures that could be used to measure the remaining procedures (Group 2).
Unitary administrative burdens of procedures through surveys (Group 1) were calculated according to the following formula:
is a function-indicator of the unitary cost that included procedure i in the h mode, for Mexico City or for selected cities with a population of 200‑250 thousand inhabitants.
is the average salary (or opportunity cost) weighted per hour of person j involved in procedure i. It is worth mentioning that in business procedures usually several individuals participate in fulfilling one, in contrast with procedures related to health services and economic benefits. Thus, each procedure will have a different salary specification weighted by the type of user.
is the average total handling time for each procedure i, in mode h, measured in hours devoted by person involved j to perform activity k. The average is obtained including only the findings gathered from surveys that comply with the normally efficient company or citizen criterion.
is the cost of inputs necessary to conclude procedure i in mode h.
Sub-step 14.2. Calculation of burdens for procedures without surveys (Group 2)
The following step consisted in extrapolating information on the handling time obtained in Group 1 procedures to measure the burden in those whose handling time was not directly measured (Group 2).
As previously mentioned, the extrapolation exercise included two types of analysis: a qualitative analysis, which identified procedures based on their similarity and to which the total handling time identified in the procedures through interviews was assigned (Subgroup 2.1: Similar procedures); and a quantitative analysis, which used data from the information gathering process to estimate the handling time of each procedure (Subgroup 2.1: Independent procedures). It is worth mentioning that in both cases extrapolation was done considering the handling time and not the burden, since this last item depends on the salary of each applicant’s profile. That is, a procedure can be identical in form, but targeted to different profiles, which would affect its unitary administrative burden.
Sub-step 14.2.1. Estimation of time for similar procedures
Annex Table 1.A.14. Example of procedures extrapolation by similarity in information and requirements
The extrapolation to similar procedures consisted in identifying comparable procedures, so that at least one of them would be selected to be part of the procedures through surveys. Thus, the average handling time detected in the surveys would be directly assigned to similar procedures. As mentioned earlier in this section, when two formalities shared at least 85% of the number and types of requirements, the estimation would be based on the similarity detected in the formats. An example of the similarity between different procedures can be appreciated in the examples contained in Annex Table 1.A.14Annex Table 1.A.14.
Annex Table 1.A.15 shows all pairs identified as similar procedures, as well as the time allocated for each one of them. That is, it shows the pair of procedures where one of which was estimated through surveys and its similar was allocated the same time due to their similarities as to the type and amount of data. The table highlights the time in minutes per procedure and mode.
Annex Table 1.A.15. Procedures for which the time of a similar procedure was allocated
Extrapolating through qualitative methods. Subgroup 2.1
Notes: Where: P: in-person procedures, I: Procedures through Online and A: Procedures by Mobile Application.
The code and the name in the two first columns refer to the procedures for which the time of a similar procedure was allocated, estimated through surveys.
With the handling times defined for subgroup 2.1 procedures, the unitary administrative burdens were calculated using the formulae contained in Annex Table 1.A.11 and Annex Table 1.A.12.
Sub-step 14.2.2. Estimation of times for independent procedures
For Subgroup 2.2: Independent procedures, the purpose is to identify a series of parameters that allow the estimation of the handling time, based on several known variables. Thus, the “unknown” variable is the handling time and the “known” variables are the procedure’s characteristics, such as its user’s profile —whether it is professional or secretarial, for example— or the number of requirements.
Parameters can be estimated through an econometric regression using the ordinary least squares technique (Gujarati and Porter, 2009[8]). The final equation to estimate such parameters was the following:
Where:
is the natural logarithm of .
is the handling time estimated for each procedure i and by mode h.
is the intercept parameter
is the parameter of the exogenous variable to estimate.
Exogenous variables depend on a parameter that is a geometric transformation over original variables , , and . The transformation was made building upon an analysis of the main components to reduce the dimensionality of the regression and avoid multicollinearity problems.
Exogenous variables are: that is the number of data or new information requested by procedure , in mode on a specific person. is the existing information, means new documents and existing documents. Superscript refers to the person who owns the data or document requested, and can have three values in variables IN and IP: beneficiaries, applicants or legal representatives, and two in DN and DP: legal and personal. See Glossary.
is the regression error.
The way this equation was derived is explained below, showing the results of the estimation parameters, the prediction power of the model and the estimation of the handling times for independent procedures.
i) Original equation
The original model used to estimate the handling time is based on the following formula, where the type of information explains the handling time devoted to each procedure, according to its mode:
Where:
is the time estimated for procedure and for mode .
Exogenous variables are: that refers to the number of data or new information requested by procedure , in mode over a user’s profile. is the existing information, are the new documents and the existing documents.
is the parameter intercept to estimate.
are the parameters to estimate of each exogenous variable, where is the indicator for the ordinal number of the parameter in the regression and has values within the{1,10} range. Indicator may have three values for variables IN and IP: beneficiaries, applicants and legal representatives; and two for DN and DP: legal and personal.
As mentioned before, the equation has 10 parameters(indicated in and ), since each variable can derive in 2 or 3 sub-variables, due to the profile of the information’s owner or the nature of the documents in question.
For example: is composed of the following sub-variables:
is the regression error.
This regression would pose two challenges: multicollinearity and heterocedasticity. The way both problems were corrected is explained below.
ii) Principal components analysis to eliminate multicollinearity
Aiming to reduce the regression’s multicollinearity problem an algebraic transformation of exogenous variables was implemented, based on the existing correlation between them. This transformation intended to reduce the dimensionality of data and consequently a principal components analysis was conducted. This type of analysis reduces the number of variables, with no significant loss on information quality and thus eliminates multicollinearity (Jolliffe, 2002[9]), (Perez, 2017[10]).
The principal components analysis is useful when there is a high correlation between study variables. The information obtained from IMSS procedures, according to the user’s classification and the new or existing condition, shows that there was indeed a high correlation between the 10 exogenous variables.
Statistical analysis shows that the three first components, based on the information breakdown, accounted for 92% of data variability —see Table 1.A.16. On the other hand, the first two components account for 80% of the variability. Therefore, regarding regression transformation, tests were made using up to four components, respectively, to determine the best option. However, the best alternative was the use of two components, since this specification eliminated the multicollinearity problem and the regressions’ parameter turned out to be significant.
Annex Table 1.A.16 shows the components results for each variable. It only includes the first six components since, based on previous analysis, components 7 to 9 do not provide relevant information. That is, the variability in the information is explained with six components.
Annex Table 1.A.16. Analysis of main components
In-person procedures
Annex Table 1.A.17. Main components of the information categories
In-person procedures
Regarding digital procedures, components are shown below. According to Annex Table 1.A.18, for digital procedures, the first three components account for 99% of the information variability.
Annex Table 1.A.18. Analysis of main components
Digital procedures
As is the case with in-person procedures, the estimation used the first two components for variables’ transformation.
Annex Table 1.A.19. Main components of the information categories
Digital procedures
Consequently the transformation to eliminate the multicollinearity of the regression based on the original variables, was done as follows:
Where is the value of component 1 and of component 2, respectively. Finally, the regression would be modified as follows:
Information of original variables was subject to a linear transformation in order to eliminate multicollinearity. Therefore, these variables depend now on components
iii) Logarithmic transformation to eliminate heterocedasticity
Aiming to eliminate heterocedasticity, the functional form was changed, applying a natural logarithm to the endogenous variable (Heij Christiaan, de Boer Paul, Franses Philip Hans, 2004[11]). The following is the final functional form of the regression used to estimate the burdens of the subgroup 2.2 procedures:
Annex Table 1.A.21 includes pertinent statistical tests showing that this equation indeed allowed to eliminate heterocedasticity.
iv) Estimation of parameters
The final equation was used to estimate the parameter, based on the data obtained in procedures through surveys. The ordinary least square technique was used. The regression results are included in Annex Table 1.A.20.
Annex Table 1.A.20. Results of the regressions used to estimate the time needed for IMSS procedures
Total time per procedure in natural logarithm
The final equation was estimated separate from Group 1 in-person procedures and digital procedures, since the nature of each of them is essentially different. The number of available observations was 42 for in-person procedures and 17 for digital procedures.
As mentioned before, 28 procedures were estimated through interviews. However, for 26 of these in the in-person mode, interviews were carried out in Mexico City and for a sub‑sample of 16 procedures, information was also gathered in facilities in other states. Therefore, 42 observations are available in the Annex Table 1.A.20 regression. On the other hand, the cost of 12 digital procedures was calculated in Mexico City and five digital procedures in other states.
The selection of in-person and digital procedures whose cost was directly estimated outside Mexico City was randomised, once those procedures that could only be fulfilled in the IMSS central offices were excluded. For example, procedures related to health education. For detailed information of the facilities visited in Mexico City and other states see Annex Table 1.A.7 and Annex Table 1.A.8.
Estimated parameters have a very high statistical significance, as shown by statistic p in Annex Table 1.A.20. Additionally, statistic tests were performed to review the consistency and strength of regression.
Annex Table 1.A.21 shows Breuch-Pagan and White tests for heterocedasticity, as well as the Ramsey test on the model’s specification. With regards to heterocedasticity, the White test indicates that the model is homoscedastic for in-person and digital procedures. The Ramsey test shows that the model has no omitted variables (Hayashi Fumio, 2000[12]).
Annex Table 1.A.21. Results of the regressions used to estimate the time needed for IMSS procedures
Total time per procedure in natural logarithm
v) Evaluation of the prediction power of the model
Estimated parameters were used to measure the model’s capacity to predict the real handling times of procedures through surveys. Annex Table 1.A.22 includes a set of 19 examples of in-person procedures and Annex Table 1.A.23 a set of 12 digital procedures, comparing the total real time it takes to perform each of them (identified through interviews) and the estimate for regression parameters. Results suggest that parameters have an important predictive power since it has an average adjustment of 85%.
Annex Table 1.A.22. Comparison of the real and estimated time for relevant procedures
Digital procedures
Annex Table 1.A.23. Comparison of the real and estimated time for relevant procedures
In-person procedures
vi) Estimation of handling times for independent procedures
In average, the prediction power model results suggest that estimated parameters are considered adequate to use them to calculate the handling time of independent procedures. Annex Table 1.A.24 contains a list of subgroup 2.2 procedures and their estimated handling times.
Annex Table 1.A.24. Independent procedures at the IMSS
Time extrapolated based on quantitative methods
Notes: The time for the Unemployment Certificate, IMSS-02-019-A and IMSS-02-019-B in the online version could not be extrapolated because the information obtained was not enough to estimate it.
N/I = No information
P = In person
I = Online
Having defined the handling times for independent procedures, the unitary administrative burdens were calculated using the formulae shown in Annex Table 1.A.11 and Annex Table 1.A.12.
The following chapter includes the measurement of the unitary administrative burdens for analysed procedures, divided by administrative unit.
Sub-step 14.3. Measurement of Total Administrative Burdens
After defining the unitary administrative burdens, total administrative burdens were calculated using the following formula:
Where:
is the total administrative burden, that refers to the sum of the costs of each one of the IMSS procedures, multiplied by their population that, as already mentioned, refers to the number of applications submitted n 2017.
is the unitary cost of procedure i for mode h. As mentioned before, there are four modes: in-person, Online, mobile application and telephone.
is the population of mode h, for procedure i,
is composed of the sum of each one of the salaries (or opportunity costs), that corresponds to each profile that submits a request for procedure i in mode h, which is multiplied by the share of each type of user. These users can be rights-holders by age group (beneficiaries, pensioners, active rights-holders), the population in general, the economically active population, etc.
Sub-index refers to the profile of the person involved in procedure .
The following chapter contains the measurement of total administrative burdens, organised by administrative unit.
During the procedures review process, some of them reported zero population or did not have any request in 2017. Annex Table 1.A.25 shows the procedures identified with these characteristics. The total administrative burden calculated for them was zero.
Annex Table 1.A.25. Procedures with population zero
Additionally, for three procedures, the IMSS has no population registries. These procedures are included in Annex Table 1.A.26. Since they were indeed carried out in 2017, but not registered, they were not considered when measuring total administrative burdens.
Annex Table 1.A.26. Procedures without information on population
Step 15. Information and transfer to database
The SCM Manual indicated that this is the stage when the report with the main results of the measurement process, as well as detailed information on the methodology, must be prepared. This report represents the fulfilment of this step.
Annex 1.B. Questionnaires used when gathering information about the IMSS
Questionnaire for in-person procedures
Notes
← 1. The waiting time for the procedure request, within the official deadlines or within time frames that exceed the official time, also implies costs for the companies, since it represents “opportunity costs”. Nevertheless, the SCM does not take these costs into consideration since they do not represent administrative burdens. Also, in order to estimate them, it is necessary to have information on the cost-effectiveness of the company, since lost profits while waiting from a government answer must be calculated, which hampers a solid estimate. See Box 1.1 for a discussion on the reach and limitations of the SCM.
← 2. The SCM manual identifies 16 standard activities. Previous experiences of the SCM use in Mexico suggest that it is advisable to implement only the 11 activities included in Table 3. See (OCDE and Secretaría de Economía, 2009[7])
← 3. The following definitions are based on the SINCO classification:
Assistant workers in administrative activities: workers who perform administrative support roles at the general offices. This category also included delivery persons and private drivers, since in the interviews it was detected that this is one of the activities performed to comply with the procedures. For example: Secretaries and drivers.
Technician: Person in charge of gathering requirements and handling simple procedures, with limited specialisation. For example: Operators.
Professional: Person in charge of gathering requirements and handling procedures of all types, with a high level of specialisation. For example: Attorneys.
Director: Person in charge of gathering requirements and handling procedures of a complex nature, that cannot be delegated to third parties. These are in general the owners or directors of the company. For example: legal representatives.
← 4. The time dedicated to measuring administrative burdens (see steps 12 and 14), and the reported difficulty are used to elaborate the complexity index (see step 14).
← 5. See Box 1.1 for an analysis of the representativeness of the MCE data.