This document summarizes a presentation on healthcare reform in Ireland. It discusses the economics of healthcare and features of healthcare as a good. It provides an overview of Ireland's current health system, including categories of health access, trends in waiting times, expenditures, staffing levels, and inequalities in health outcomes related to social class and geographic area. It also examines the potential costs of implementing healthcare reform as outlined in Ireland's Sláintecare plan, estimating that an average of €1.6 billion additional annual funding would be needed through 2030. The conclusions call for principles of reform such as prioritizing equality, dismantling the two-tier system, and investing in primary care to reduce hospital visits.

1. Healthcare –
Time for a New Deal
Paul Goldrick-Kelly and Dr.Tom Healy
NERI (Nevin Economic Research Institute)
Dublin
PaulGK@NERInstitute.net and
Tom.Healy@NERInstitute.net
www.NERInstitute.net
NERI Seminar Series
September 12th 2018

2. Outline
1. THE ECONOMICS OF HEALTHCARE
2. OVERVIEW OF THE HEALTH SYSTEM IN IRELAND
3. INEQUALITIES IN HEALTH OUTCOMES AND
ACCESS
4. THE COST OF DELIVERING CHANGE
5. CONCLUSIONS

3. THE ECONOMICS OF
HEALTHCARE
SECTION 1
PGK

4. HEALTHCARE AS A GOOD
• Healthcare has features of rivalrous and excludable
goods:
– Quantity of available healthcare falls with use (rival). eg. Hospital beds.
– Access & consumption of healthcare can be limited (excludible good).
• Healthcare also has public good features:
– Eg. Advances in medical expertise are not rivalrous.
• Healthcare often considered a merit good:
– Net private benefit to individual is not fully recognised at consumption.
– Consumption of a merit good results in positive externalities.
Private consumption likely below socially optimal level.

5. OVERVIEW OF THE HEALTH
SYSTEM IN IRELAND
SECTION 2
TH

6. CATEGORIES OF HEALTH ACCESS
FOR THE ADULT POPULATION 2015
Medical card only
(MC)
36%
MC+ private
health insurance
7%
Voluntary Health
Care Payments
(including private
insurance)
36%
None of these
21%
Source: EU SILC estimates

7. Sláintecare Implementation Strategy
Four goals and 10 strategic actions, 41 main actions,
106 ‘sub-actions’
“Strengthen the governance and operational framework
for monitoring and management of private practice in
public hospitals to ensure contractual compliance”
(sub-action 8.1.1.) delivery=2018
1. Will it be delivered on time as promised?
2. How much will it cost?

8. TH

9. TH
“These measures, discussed in Chapter 5, are
designed to reduce substantially the waiting times
for public patients for elective treatments. Specific
targets are set so that, by the end of 2004, no public
patient will have to wait for more than three
months to commence treatment, following referral
from an out-patient department.” Health Strategy,
2001 (page 78)

10. TRENDS IN HOSPITAL WAITING TIME
BY CATEGORY OF PATIENT
Source: Labour Force Survey/QNHS – 2010 unpublished
31.5
34.9
21.1
24.0
46.0
25.0
16.8
31.2
10.4 10.0
26.0
8.0
31.6
27.4
32.7
21.0
28.0
0.0
0
5
10
15
20
25
30
35
40
45
50
Outpatient Inpatient Day patient Outpatient Inpatient Day patient
Waiting six months or more in 2010 Waiting six months or more in 2001
Med Card Priv Health Neither

11. DISTRIBUTION OF CATEGORIES OF
HEALTH ACCESS BY EQUIVALISED INCOME DECILE
FOR THE ADULT POPULATION 2015
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6 7 8 9 10
No coverage Medical and GP Visit Card Only Private Insurance
Source: EU SILC unpublished

12. EXPENDITURE ON HEALTHCARE IN THE
REPUBLIC OF IRELAND in 2016
72%
15%
13%
Government funding
Voluntary healthcare
payments
Household Out-of-
Pocket payments
Source: CSO

13. TOTAL CURRENT EXPENDITURE ON HEALTH
PER CAPITA IN 2015
1,828
2,234
2,318
2,442
2,747
2,767
2,820
2,846
3,049
3,113
3,208
3,474
143
170
161
518
176
501
229
244
77
272
44
124
459
597
431
529
623
238
516
675
497
473
583
515
EU27
FINLAND
UNITED KINGDOM
IRELAND
BELGIUM
FRANCE
NECG
AUSTRIA
DENMARK
NETHERLANDS
SWEDEN
GERMANY
Public Voluntary Healthcare payments Household out-of-pocket payment
Note: all values are in constant purchasing power parity (adjusted for Actual Individual Consumption)

14. OCCUPANCY RATES FOR
ACUTE HOSPITAL BEDS IN 2000 AND 2015
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Austria
EU17
France
OECD27
Belgium
Germany
NECG6
United Kingdom
Ireland
2015 2000

15. TOTAL WHOLE-TIME EQUIVALENT
STAFF EMPLOYED IN THE PUBLIC HEALTH
SERVICE, 2007-2018
Category 2007 2014 2018
(Jul.)
%
change
07-18
Medical/dentist
8,005 8,817 10,130 26.5
Nursing
39,006 34,509 37,408 -4.1
Health and social care
15,705 13,640 16,108 2.6
Management/Administration
18,044 15,112 18,070 0.1
General support
12,900 9,419 9,478 -26.5
Other patient & client care
17,846 17,829 24,906 39.6
Overall total
111,506 99,326 116,100 4.1

16. NUMBERS OF PRACTICING NURSES
PER 1,000 OF POPULATION IN 2015
0 2 4 6 8 10 12 14 16 18
United Kingdom
Austria
EU22
OECD35
Canada
France
New Zealand
Netherlands
Belgium
Sweden
United States
Australia
NECG
Ireland *
Germany
Finland
Denmark

17. PRACTICING DOCTORS PER 1,000
POPULATION IN 2015
0 1 2 3 4 5 6
United States
Canada *
United Kingdom
Ireland
Belgium
New Zealand
Finland
France *
OECD35
Netherlands
Australia
NECG
EU23
Denmark
Germany
Sweden
Austria

18. REMUNERATION OF NURSES
(RATIO TO AVERAGE WAGE) IN 2015
0.94
0.95
1.01
1.04
1.05
1.06
1.09
1.11
1.13
1.15
1.19
1.24
1.24
Finland
France*
Ireland
United Kingdom
NECG
EU18
Canada
Belgium
Germany*
Netherlands
Australia*
New Zealand
United States

19. REMUNERATION OF GPS
(RATIO TO AVERAGE WAGE) IN 2015
2.4
2.4
2.5
2.7
2.7
2.9
3
3.1
4.1
Ireland
Belgium
Netherlands
Denmark
Austria
NECG
France
United Kingdom
Germany

20. REMUNERATION OF CONSULTANTS
(RATIO TO AVERAGE WAGE) IN 2015
2.2
2.3
2.6
2.6
3.0
3.1
3.3
3.4
3.4
3.5
France*
Sweden
EU18
Finland
NECG
New Zealand
Ireland
Netherlands
United Kingdom
Germany

21. INEQUALITIES IN HEALTH
OUTCOMES AND ACCESS
SECTION 3
PGK

22. LIFE EXPECTANCY OVER TIME

23. LIFE EXPECTANCY OVER TIME (REP.
IRELAND)

24. LIFE EXPECTANCY AT BIRTH BY AREA OF
DEPRIVATION, INCOME QUINTILE
68
70
72
74
76
78
80
82
84
First Quintile (least
deprived)
Second Quintile Third Quintile Fourth Quintile Fifth Quintile (most
deprived)
Male
Female
Source: CSO (Census of Population and records of death

25. STANDARDISED DEATH RATE
(PER 100,000)
0
100
200
300
400
500
600
700
800
900
Professional
workers
Managerial and
technical
Non-manual Skilled manual Semi-skilled Unskilled
Social class
Persons Males Females
Source: CSO, 2010

26. SHARE OF PERSONS AGED 15+ REPORTING
UNMET NEEDS FOR HEALTH CARE, 2014
Source: Eurostat, 2018

27. ACCESS TO HEALTHCARE
• Rates of unmet need (41% in Irel vs 27% in EU)
• Finances most frequently cited impediment to care in 2014,
followed by waiting lists.
• Unmet need for medical examination or treatment was below
EU-28 averages however at 3.3% vs 4.5%. This has increased
since 2004 (2.4%).
• Key problems = affordability and waiting lists.
• Connolly and Wren (2017) find that those with private insurance
least likely to report unmet need.
• Strong correlation between unmet need and social class

28. THE COST OF DELIVERING
CHANGE
SECTION 4
PGK

29. APPROACHES TO
HEALTHCARE FUNDING
Private Insurance Social Insurance General Taxation
Financial: Raising
Sufficient Revenue
OK (but see
affordability)
Some good
examples of
protection in austerity
Problematic in times
of austerity
Economic Efficiency
and Affordability
Very Costly –may
have technical but
not allocative
efficiency
OK –cost control
getting better
Cheaper, extensive
non-price rationing
(may undermine
financing)
System: Complexity
and degree of
change
Very complex
organisation,
regulation and
system of subsidies
Culture change –no
SHI presence
Simpler –largely in
place
Political: Fit with
Values
Private Insurance
well-embedded
No significant history
of social insurance
Taxation tolerated
But what about two-
tier
Source: Thomas (2017)

30. HOW MUCH WILL REFORM COST?
• The Sláintecare report in its costings allocates approx. €3 billion
over 6 years to expand capacity. It also entails an expansion in
entitlements amounting to €2.8 billion from year 10.
• Expansion of entitlements amounts to a step shift in funding and
entails:
– Expansion of the health and well-being budget
– Reduction and abolition of user fees
– Expansion of primary care provision
– Expanded social care
– Additional funds for mental health initiatives
– Funds for dentistry
– Growth in activity within public hospitals

31. HOW MUCH WILL REFORM COST?
• Our model assumes cost growth for current healthcare expenditure
driven by:
– Annual Demographic Pressure =1.6%
– Annual Additional medical inflation = 1.4%
– General inflation tending towards 2%
– 2% annual growth factor for a separate cost scenario
– Fiscal space estimates also include funding needed to meet “stand-still
costs” for other public services = 1.25% per annum.
• Convergence condition where public expenditure expands as a
proportion of total current spending to 85% in 2029. Incorporate
NDP and Sláintecare capital spend for fiscal space calculations.

32. NOMINAL CURRENT EXPENDITURE
ON HEALTH BY FINANCING SCHEME
2016-2030
€0
€5,000
€10,000
€15,000
€20,000
€25,000
€30,000
€35,000
€40,000
€45,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Millions
Current Public Health Expenditure with Reform Current Private Health Expenditure with Reform Current Public Expenditure without Reform

33. ESTIMATED FISCAL SPACE LEFT
OVER AFTER
SLÁINTECARE IS IMPLEMENTED (€ MILLIONS)
-€1,000
-€500
€0
€500
€1,000
€1,500
€2,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Benign Scenario Moderate Scenario Recession Scenario

34. HOW MUCH WILL REFORM COST?
• Claims on the fiscal space from health system transition
and other public service standstill costs are likely
substantial:
– Average required between 2019 and 2030 of €1.6 billion of
additional spending for health. This peaks at over €2 billion as
the transition is completed in 2029.
– Additional resources needed to maintain other public services in
real terms and realise investment plans average over €2.4
billion.
• Additional discretionary revenue is required under all
growth scenarios at some point. Even under benign
conditions remaining fiscal space amounts to less than
2% of aggregate spending.

35. CONCLUSIONS
SECTION 5
TH

36. PRINCIPLES OF REFORM
1. Equality first Social inequality makes for sick societies …..
2. Reset our values
3. Education for health
4. Invest in primary care (staying away from hospitals)
5. Dismantle the two-tier system (no more Q-jumping at expense of tax
payer)
6. Empower health professionals (to make safe health decisions at a local
level and remain accountable to the appropriate bodies.
7. Integrate healthcare in social policy
…..housing, income support, social care, education, community
connectivity and engagement, transport so that people can be cared for, as
much as possible…...

37. IN SUMMARY
1. Keep people out of hospital!
2. No jumping of the queue!

38. www.NERInstitute.net