Universal Health Insurance plan should be abandoned

Opinion: Proposal would have led to charges for those who now have free access to services

Health insurance policies will no longer be allowed to offer their principal current benefit, which is reduced waiting times for non-emergency treatment.  Photograph: Getty Images

Health insurance policies will no longer be allowed to offer their principal current benefit, which is reduced waiting times for non-emergency treatment. Photograph: Getty Images

Tue, Jun 3, 2014, 01:00

The need for the Coalition to re-examine priorities and past commitments in the wake of the mid-term election offers both parties an opportunity to abandon the promise to introduce universal health insurance (UHI) made in their 2011 manifestos.

Both probably hoped that voters would assume that UHI would provide the majority (55 per cent) who now rely on medical and surgical services funded by general taxation (a so-called “single-payer” system) with the privileges enjoyed by the 45 per cent who are also covered by private insurance (a “multi-payer” system). The recent White Paper, however, makes it clear that its outcome is likely to be the opposite. The majority will be compelled to pay for access to services they now obtain free. Health insurance policies will no longer be allowed to offer their principal current benefit, which is reduced waiting times for non-emergency treatment.

The contrast with the UK, where single-payer and multi-payer schemes are similarly available, is striking. Only about 10 per cent of the population are privately insured. Waiting times in the National Health Service have been considerably reduced in recent years and the number of individually purchased insurance policies has been falling, though partially offset by an increased number of corporately purchased policies. Many employers appreciate the convenience of being able to select time and place for medical and surgical procedures. The proposed abolition of this option might make Ireland a less attractive location for foreign companies.

The White Paper does not attempt to explain why, by international standards, Ireland has relatively long waiting times for consultations and elective surgical procedures. The problem does not appear to be simply a matter of the availability of facilities. In 2011, Ireland was close to the OECD per capita average in its number of MRI units, but carried out far below the average number of MRI exams. Hospital beds per capita are low by EU standards but very similar to the UK and above Canada and Sweden. The number of doctors per head is lower than the OECD average but not to a major degree. The proportion of doctors classed as specialists, however, is strikingly lower than in any other country, so it is possible that shortage of consultants seriously contributes to the problem.

Method of financing

The White Paper implies that at least part of the problem lies in the system of financing. It proposes switching from block grants to public hospitals to payments for the treatments actually provided. This standard argument for introducing market elements into the provision of public services is intended as an incentive to search for cost-efficiency and lead to the provision of more services for the same total expenditure. But in health services the issue is less clear-cut.

Prices will have to be set for each of some 700 identifiable hospital treatments (“diagnostic related groups”), a list that is likely to grow and change as medical technologies improve. In Ireland, both purchasers and providers of hospital services are in the public sector or are not-for-profit trusts, they may not be responsive to price incentives. There is also the opposite danger cost-saving will be pursued to the detriment of the quality and safety of care. So complex processes of pricing, regulation and monitoring are required, and it is not obvious that the gains in efficiency will justify their potential costs. The decision to proceed with the financing reform appears, however, already to have been taken.

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