Addressing Inequities in the Irish Health Care System Through Social Health Insurance

Abstract

The Irish health care system is unusual in that there is no subsidy for access to GP services for the majority of the population. Further a high proportion of the population has subsidised and supplementary private medical insurance. Current financial incentives and flows of subsidisation between the public and private sectors produce some odd features. Careful analysis of these financing mechanisms shows extensive inequities, with those on low incomes, but above the tax threshold, being the worst off. Further, the inequities and inefficiencies have been perpetuated by a lack of transparency in the health financing system. The authors explore the case for change and the options for Social Health Insurance (SHI) design that would be most relevant for the Irish health care system. Four possible scenarios for SHI are set out to improve equity and efficiency. The models vary according to the improved access that they give their members in terms of Primary Health Care, private/semi-private hospital beds and access to consultants. At one extreme, the levelling up (Rolls Royce) option provides hospital care on a par with what is currently available through private insurance and free GP access. At the other, the 'Mini' option reduces the cost of access to GPs and lowers public sector hospital charges for the uncovered population. Drawing on data from public accounts and the private insurance industry, the authors review the resource implications of these scenarios, with and without efficiency gains. Costs range from 2.2 billion to 380 million (or from an additional 1.5% to 0.3% of GDP). The authors also analyse the potential financing mechanisms. The additional payments for the options would range from 6.0% of taxable income for the Rolls Royce option to only 2.5% for the priority PHC option and 1.1% for the Mini. With efficiency gains these rates would reduce so that the Mini option pays for itself. Finally the authors explore the issues of transition and implementation, noting the institutional, stakeholder and capacity bottlenecks which currently exist.