You don't hear so much about universal health insurance these days but the Government is at least still committed to the provision of universal healthcare. It's in the Programme for a Partnership Government and, in a recent speech, Minister for Health Simon Harris pointed out the concept of universal healthcare is endorsed by the World Health Organisation, the UN, the OECD and the EU.
As an overall goal to improve our health services, he said, “universal healthcare involves four main objectives: reducing unmet health needs, reducing inequalities in access to health goods and services, improving service quality [and] improving financial protection – this means that patients do not face catastrophic or impoverishing levels of health spending as a result of seeking healthcare”.
That frames the concept of universal healthcare in a different light to the universal health insurance championed by former minister for health James Reilly as a way to put an end to Ireland’s two-tier (public/private) health sector. Ultimately sidelined by Reilly’s successor, Leo Varadkar, in the light of ESRI and other reports that highlighted the likely costs, the idea of insuring the entire population with private companies has effectively been dumped. The focus today is on healthcare reform – again.
Acknowledging the health service as likely suffering from "reform fatigue", Harris, speaking to the Oireachtas Committee on the Future of Healthcare in March, pointed out that the WHO notes that "no country fully achieves all the universal health coverage objectives, for 100 per cent of the population, for 100 per cent of the services available, and for 100 per cent of the cost – and with no waiting lists. But it does believe that every country can improve efficiency, reduce waste, and increase value from its health spend."
In relation to Ireland's distinct and sometimes controversial blend of public and private healthcare provision, he pointed out that our publicly funded hospitals deliver care to both public and private patients and that, as far back as 1999's White Paper on Private Health Insurance, the potential drawbacks to this mixed system were flagged up as a concern.
Certain advantages
Nevertheless, he said, the same White Paper also identified certain advantages to the coexistence of public and private practice in public hospitals, including that it helps attract high-calibre staff, promotes efficient use of consultants' time, and represents an additional income stream to the public hospital system.
“In the intervening period, concerns about the allocation of scarce public hospital resources to private patients have grown. Partly this is attributable to the heightened concern about access for public patients generally. It may also be indirectly influenced by the growth in private health insurance coverage from 1.5 million people (or 42 per cent of the population) in 1999 to 2.1 million people (or 46 per cent of the population) in 2015,” he said.
Over the intervening years, there have been proposals to eliminate private practice in public hospitals entirely on the one hand and, through mandatory competitive private health insurance, extending private insurance to everyone in the population.
“Whatever the direction of change, it requires careful consideration as it is likely to have very extensive implications for hospital costs and resourcing, together with contractual and remuneration arrangements for hospital consultants. Other more detailed aspects of current arrangements are worthy of consideration, including the misalignment of financial incentives as between public and private patients. At the moment, public hospitals receive a block grant for public patients and a per diem rate for private patients,” said Harris.
Movement to activity-based funding for public patients would see public activity remunerated on a per-case basis. “It would make a lot of sense in this context to introduce a case-based charge for private patients and to equalise the tariff for public and private patients based upon the efficient economic cost. This would eliminate any incentive to the hospital to accommodate more private patients. Full alignment of incentives would also require a movement away from fee-for-service payments to hospital consultants for private patients towards an annual remuneration inclusive of both public workload and the permitted and planned level of private activity.”
It’s just one example of how the detail of any change proposed in current arrangements will need to be thought through carefully, he said, both because of provider issues, “and not least the fact that almost half of the population have private health insurance and very many people with such insurance currently receive their care in public hospitals”.
Long-term vision
The Committee on the Future of Healthcare, which is chaired by Róisín Shortall, is charged with developing a single long-term vision plan for healthcare over a 10-year period, including the development of a new funding model for the health service.
It has been meeting with and receiving submissions from stakeholders and outside experts with a view to delivering a reform programme first, so that the foundations are then in place to change the funding model – including what the Programme for a Partnership Government hopes will be the “best way forward to finance universal healthcare”.
The 2016 health budget was €13.1 billion, so the stakes are high from both a personal and a financial perspective. One of the issues raised by the committee has been a possible end to tax relief for those who take out private health insurance, a suggestion both Minister for Health Simon Harris and Minister for Social Protection Leo Varadkar are reported to have dismissed.
Such a move would doubtless prove unpalatable. According to figures from the Health Insurance Authority, the statutory regulator of the private health insurance market in Ireland, there were 2.1 million people insured with inpatient health insurance plans at the end of December 2016. This represented an increase of 30,000 on the previous year, but is still down from the market peak of almost 2.3 million at the end of 2008.
Based on CSO population estimates, the percentage of the population with inpatient health insurance plans stood at 46 per cent at the end of 2016, compared with the 2008 peak of 50.9 per cent.
“We recognise that there are complex issues involved in devising a long-term strategy for a universal single-tier health service in this country,” said Shortall at the launch of its second interim report earlier this year.
Some significant areas of consensus were emerging, however, including the need for integrated care and for the reorientation of services towards primary care.
“The committee is also mindful that many of the issues facing the Irish health system are not unique, and that other health systems are also grappling with the challenges of ageing populations, rising incidence of chronic disease, the need to ensure equity of access, and financial constraints,” she said.
“Hence it considers that it is essential to take account of international perspectives, including the work of the WHO and others. It is not the intention to import ready-made solutions, but to reflect on international best practice and knowledge while developing the vision and direction for the Irish context.”
Lifetime Community Rating
The introduction of Lifetime Community Rating (LRC) regulations in May 2015 meant that people aged 35 and over, taking out health insurance for the first time, have been charged a late entry loading of 2 per cent of the gross premium for each year over the age of 34. The result is that a 50-year-old who has held private health insurance since they were aged 30 pays the same premium as a 30-year-old, but a person who purchases private health insurance for the first time at age 50 pays more than a 30-year-old. The purpose of the changes was to encourage people to take out health insurance at a younger age and to maintain cover, thereby helping to control average claims costs and premium inflation in what is an unfunded healthcare system. At the second anniversary of its introduction, in May of this year, the Health Insurance Authority reported a 152,397 net increase in the total number of insured persons over the two-year period from January 1st 2015, which it attributes to both the economic recovery and the effects of the LCR. A review of the scheme is currently under way.
