Anne Nolan TCD ESRI Charles Normand TCD Irish Economic Policy Conference Dublin 31 st January 2014 Context Substantial health system pressures in Ireland Large real declines in public expenditure ID: 436608
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Slide1
The Impact of the Economic Crisis on Health and the Health System in Ireland
Anne Nolan (TCD, ESRI)
Charles Normand (TCD)
Irish Economic Policy Conference
Dublin, 31
st
January 2014Slide2
Context
Substantial health system pressures in Ireland
Large, real declines in public expenditure
2Slide3
Total public health expenditure2000-2013
Sources
: Department of Public Expenditure and Reform; CSOSlide4
Context
Substantial health system pressures in Ireland
Large, real declines in public expenditure
External pressures:
Demographic change (population growth; fertility)
Internal pressures:
Limited capacity in some sectors
Weak primary and community care
Demand-led schemes
High costs (salaries; pharmaceuticals)Programme for Government commitments
4Slide5
Approach
Review responses and policy levers in three key areas:
Level and mix of statutory resources for health
Health coverHealth service efficiency
Examine impact of crisis, and health system responses, on population health
Mortality
Self-assessed health
Health behaviours
Conclusions
5Slide6
1 Level and mix of statutory resources for health
Statutory resources, i.e., payments that are pre-paid and mandatory
General taxation (direct/indirect)
Payroll taxes/social health insurance
Mandatory health insurance (e.g., Netherlands)
Principles:
Adequate level
Stability and predictability
Fairness/equity
TransparencyOther (e.g., impact on labour costs)
6Slide7
Current situation in Ireland
Public health expenditure as % of total health expenditure has been falling
Trend in contrast to OECD average
Increasing reliance on out-of-pocket payments and PHI Public health expenditure as % of total public expenditure has been relatively stable
Initial pace of cuts could not be sustained
7Slide8
Public health expenditure as% total health expenditure, 2000-2011
8
Source
: OECDSlide9
Public health expenditure as % of total public expenditure, 2008-2012
9
Source
: Department of Public Expenditure and ReformSlide10
Policy options
Continue with budget reductions
‘Earmark’ resources for health (within existing funds)
Introduce a new source of statutory revenue, e.g., payroll taxBut, off-setting reductions in general taxation
Adequacy and stability (pro-cyclical fluctuations)
Introduce a new source of statutory revenue, e.g., tax on sugar-sweetened drinks (SSD)
Primary objective is behavioural change
HIA report on SSD tax published in May 2013
10Slide11
2 Health cover
Three aspects of public health cover:
Breadth:
who is covered?Scope: what
is covered?
Depth:
how much
is covered? Are there user fees?
Principles, i.e., role of coverage in:
Alleviating/exacerbating fiscal pressureStrengthening health system performanceEnhancing efficiency in allocation and use of statutory resources
11Slide12
Current situation in Ireland
Complex system of public healthcare entitlements
Category I (full medical card)
Category IIAlso GP visit card (since 2005)
Other entitlements: LTI, HTD,
etc
.
Role of private health insurance (PHI)
Recent declines in cover
12Slide13
Population cover (%)
13
Source
: Thomson
et al
. (2012), Figure 4.2Slide14
Changes to statutory coverage
Breadth
e.g., re-introduction of means test for over 70s in 2009, proposed extension of GP visit cards to all those 5 and under
ScopeReductions in dental, optical and aural entitlements
Depth
Increases in user fees (e.g., public hospital charges; prescription deductible for Category II)
Introduction of new user fees (e.g., prescription fee-per-item for Category I)
14Slide15
Policy options
Breadth
International trend is towards increasing coverage
Removing coverage increases role for PHI (fiscal pressure via tax relief)Scope
Role of HTA
Streamlining the benefit package is often technically and politically difficult to achieve
Depth
Usual arguments for user fees do not hold in health care
May conflict with Programme for Government objectives
15Slide16
3 Health system efficiency
Concerned with purchasing arrangements
What to purchase?
Who should purchase?From whom?At what price?
Under what conditions?
Principles:
Matching resources to need
Reducing waste
Ensuring quality
Setting priorities
16Slide17
Current situation in Ireland
Purchasing largely co-ordinated by HSE
Sometimes also plays a provider role
Paying for primary carePaying for acute hospital care
Reforming delivery structures
Primary care teams
Hospital trusts/groups
Working practices
17Slide18
Policy options
Payment of providers
GPs: increasing capitation component
Acute hospitals: increased use of DRGs, MFTP Specialists: salary levels
Reform of delivery structures
Primary care teams
Integration across primary, community and acute sectors
Hospital autonomy
Input prices
In particular, pharmaceuticals
18Slide19
Impact of economic crisis on health?
Caveats
Availability of timely data
Time lags in effectsEstablishing causality (crisis, response to crisis, something else?)
Large international literature on the impact of the macroeconomic cycle on population heath
In general, mortality found to be
procyclical
(with exception of suicide)
In general, poor physical health status found to be
procyclical, while poor mental health status found to be countercyclicalIn general, negative health behaviours found to be procyclical
Complex relationships (income, unemployment, leisure-time, stress, access to health care,
etc
.)Slide20
All- and cause-specific mortality2007-2010 (age standardised)
20
Note:
Causes of death with rates below 10 are excluded
Source
: OECD
2007
(per 100,000 pop)
2010
(per 100,000 pop)
change
Cancer
246.8
227.3
Endocrine
22.8
19.5
Mental & behavioural
15.9
20.1
Nervous
28.9
29.4
Circulatory
322.6
272.0
Respiratory
110.1
95.6
Digestive
35.6
30.0
Genitourinary
22.3
19.6
External injury & poisoning
43.8
38.6
All causes
877.6
775.4
Slide21
Mortality from ‘external causes of death’2007-2010
Source
: OECDSlide22
Self-assessed health &subjective well-being, 2007-2012
% >= ‘good’ self
assessed health
% ‘very’ satisfied with life
2007
84.2
33
2008
84.4
29
2009
83.4
29
2010
83.3
31
2011
83.4
29
2012
n/a
25
Sources
: OECD;
EurobarometerSlide23
Alcohol and tobacco consumption2000-2011
Source
: OECDSlide24
Summary
Irish health system experiencing unprecedented cuts in expenditure
Backdrop of external and internal pressures
So far, cuts achieved by cutting staff numbers and pay; increased activity; increased user fees
Ongoing concerns over ability to absorb further cuts (in context of rising demand and Programme for Government commitments)
Difficult to ascertain impact on health at this stage
24Slide25
Further Challenges
Questions over feasibility of future cuts in required timeframe
Programme for Government commitments are welcome, but will require extra resources and strong governance
Recognise the difficulty of improving efficiency in times of structural/organisational change
Important to maintain a focus on policy goals
25Slide26
Contact
Dr Anne Nolan
Research Director, TILDA
annolan@tcd.ie
Professor Charles Normand
Edward Kennedy Professor of Health Policy and Management, TCD
normandc@tcd.ie