Members of the economics professions have been known to argue that part of the reason Ireland got into such a mess was the lack of economic analysis in key areas such as the Department of Finance, the Central Bank, and so on. It is an argument that can be a bit self-serving, given the small number of economists who actually saw the crash coming. Still, economic analysis is a vital tool in policymaking, no more so than in planning where to spend more money – and where not to spend it.
On the Friday before Christmas. the Department of Health put up on its website findings from a report by Indecon economic consultants on primary care centres, those community health facilities that take in services such as GPs, public nurses, physiotherapists, and so on. They are a key part of the national healthcare plan, designed to move more services out of hospitals and into the community.
Controversy
The provision of primary care centres has been the subject of considerable controversy. You might recall that Róisín Shortall resigned as a junior health minister after a row in 2012, when then minister for health
James Reilly
added 15 centres to the 20 new locations she had proposed for primary care, two of which were in his own constituency. Reilly famously said at the time that his decision was based on a “logistical logarithmic progression”. Nobody had any idea what this meant.
The Indecon report casts serious doubt on the degree of rigour involved not only in the Reilly decision but in the entire process of planning for the centres. This first involved asking local Health Service Executive (HSE) management what they thought was needed. A second analysis, to estimate staff needs, was based on local population levels at the time and took into account an estimate of deprivation.
However, remarkably, the report says that there was no formal assessment of future population trends or how they would affect demand for primary care. This means there was no proper cost-benefit analysis done on a central plank of our healthcare strategy. If you don’t have a reliable estimate of future demand, you can’t work out the priorities for where money should be spent. Working this out may require some advanced economics, but the need for it is just common sense.
It appears that not only were Reilly’s additions to the list not made on a “logistical, logarithmic” basis, but that the whole decision-making progress was on shaky ground from the start. Despite this project having been talked about since 2001, and resources already committed, there is no detailed data for how many people use existing centres, what they are there for or what health “outcomes” are achieved.
Indecon did do the numbers. It looked at population trends and reckoned that the demand for primary care centres would increase by around 20 per cent between 2016 and 2031, from 19.2 million visits annually to 22.9 million. It then looked at how this might affect hospitals, where patient demand would fall a bit. It said that the benefits of investing in these centres was significant, though less than half what the HSE had estimated. Indecon recommends a multifaceted approach, including HSE-leased or built centres, GP-led primary care centres and tax incentives for GPs to invest in equipment to allow more to be done outside of a hospital setting.
However, Indecon also states that a different approach is needed to planning where to put new centres, including “much more detailed independent analysis of demand” and monitoring procedures to measure who is using centres, and what for, and how they do afterwards.
Polite language
The Indecon report is written in the polite language normal in such consultancy work. But you don’t have to read far between the lines to get the drift. This whole project was embarked on without the basics of a proper cost-benefit analysis being conducted. Asking staff what they think is no substitute for a hard look at where population is growing and where services will be needed.
At a time when public investment levels have fallen significantly and the health service is in an annual scramble to save cash, some way has to be found to put logic into decisions of where money should be spent. Political interference is traditionally an issue in these decisions, but the problem goes much deeper than that. An economist’s cost-benefit analysis is only as good as the assumptions it is based on, but in areas such as population and demand for health services, it is not rocket science to map out where money is most needed.
