An Examination of the Potential Costs of Universal Health Insurance in Ireland
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An Examination of the Potential Costs of Universal Health Insurance in Ireland Maev-Ann Wren, Sheelah Connolly, Nathan Cunningham RESEARCH SERIES NUMBER 45 Report prepared for the Department of Health by the Economic and Social Research Institute (ESRI) September 2015 Available to download from www.esri.ie © Economic and Social Research Institute and the Minister for Health, September 2015 ISBN 978-0-7070-0392-4 The ESRI The Economic Research Institute was founded in Dublin in 1960, with the assistance of a grant from the Ford Foundation of New York. In 1966 the remit of the Institute was expanded to include social research, resulting in the Institute being renamed the Economic and Social Research Institute (ESRI). In 2010 the Institute entered into a strategic research alliance with Trinity College Dublin, while retaining its status as an independent research institute. The ESRI is governed by an independent Council which acts as the board of the Institute with responsibility for guaranteeing its independence and integrity. The Institute’s research strategy is determined by the Council in association with the Director and staff. The research agenda seeks to contribute to three overarching and interconnected goals, namely, economic growth, social progress and environmental sustainability. The Institute’s research is disseminated through international and national peer reviewed journals and books, in reports and books published directly by the Institute itself and in the Institute’s working paper series. Researchers are responsible for the accuracy of their research. All ESRI books and reports are peer reviewed and these publications and the ESRI’s working papers can be downloaded from the ESRI website at www.esri.ie The Institute’s research is funded from a variety of sources including: an annual grant-in-aid from the Irish Government; competitive research grants (both Irish and international); support for agreed programmes from government departments/agencies and commissioned research projects from public sector bodies. Sponsorship of the Institute’s activities by Irish business and membership subscriptions provide a minor source of additional income. The Authors Maev-Ann Wren is a Senior Research Officer, Sheelah Connolly is a Research Officer and Nathan Cunningham is a Data Analyst at the Economic and Social Research Institute, Dublin. Acknowledgements Financial support for this research was provided by the Department of Health. The authors would like to thank the members of the Steering Group of the ESRI Research Programme in Healthcare Reform for their support, input and encouragement. The authors would particularly like to thank Laura McGarrigle and Robert Murphy of the Department of Health for their assistance to this research project. The authors are also grateful to the many officials of the Department of Health and HSE, who have assisted this research, including the staff of the newly established Healthcare Pricing Office. The authors would like to acknowledge the invaluable assistance of the Central Statistics Office in completing this research. The authors would like to acknowledge the contributions of colleagues at the ESRI; in particular Richard Layte, Anne Nolan, Tim Callan and Patricia Carney, who contributed to various stages of this research. Valuable comments on the text and suggestions for revision were provided by three anonymous reviewers. We would like to thank them for their contributions while acknowledging that the authors bear sole responsibility for the analyses and interpretations presented. This report has been accepted for publication by the Institute, which does not itself take institutional policy positions. All ESRI Research Series reports are peer reviewed prior to publication. The authors are solely responsible for the content and the views expressed. Table of Contents | i Table of Contents ABBREVIATIONS ...................................................................................................................................... VIII GLOSSARY OF TERMS ................................................................................................................................. X FOREWORD ............................................................................................................................................. XII EXECUTIVE SUMMARY ............................................................................................................................ XIII CHAPTER 1 INTRODUCTION ......................................................................................................................1 1.1 Objectives of this Study .............................................................................................1 1.2 Context ......................................................................................................................2 1.3 Background ................................................................................................................4 1.4 Conceptual and Definitional Issues ...........................................................................9 1.5 Structure of the Report .......................................................................................... 11 CHAPTER 2 DATA AND METHODS .......................................................................................................... 13 2.1 Introduction ............................................................................................................ 13 2.2 Overview of Methodology and Definitions ............................................................ 13 2.3 Data Sources ........................................................................................................... 16 2.4 Preliminary Analysis - Methods .............................................................................. 18 2.5 Estimating the cost of the White Paper Model of UHI - Methods ......................... 22 2.6 Conclusion .............................................................................................................. 42 CHAPTER 3 INTERNATIONAL EVIDENCE ON HEALTHCARE FINANCING MODELS AND HEALTHCARE EXPENDITURE ...................................................................................................................... 44 3.1 Introduction ............................................................................................................ 44 3.2 Financing of Health Systems ................................................................................... 44 3.3 The Relationship between System Design Features and Healthcare Expenditure ............................................................................................................ 47 3.4 Determinants of Healthcare Expenditure .............................................................. 60 3.5 Cost Containment in the Healthcare Sector ........................................................... 62 3.6 Cross-Country Comparisons ................................................................................... 65 3.7 Summary of Country Case Studies ......................................................................... 70 3.8 Concluding Reflections ........................................................................................... 74 CHAPTER 4 TRENDS IN IRISH HEALTHCARE EXPENDITURE 2004-2013 .................................................. 78 4.1 Introduction ............................................................................................................ 78 4.2 Total Healthcare Expenditure ................................................................................. 78 4.3 Public Healthcare Expenditure ............................................................................... 80 4.4 Private Healthcare Expenditure.............................................................................. 85 4.5 Programme Expenditure ........................................................................................ 89 4.6 Pay-and-Pension-Related Expenditure ................................................................... 90 4.7 Conclusion .............................................................................................................. 94 ii | An Examination of the Potential Costs of Universal Health Insurance in Ireland CHAPTER 5 FINDINGS ON THE POTENTIAL EFFECTS OF THE WHITE PAPER UHI MODEL ON IRISH HEALTHCARE EXPENDITURE AND FINANCING .................................................................... 95 5.1 Introduction ............................................................................................................ 95 5.2 Estimation of Irish Healthcare Expenditure and Financing - Findings .................... 97 5.3 Cost of the White Paper Model of UHI – Findings................................................ 107 5.4 Conclusion ............................................................................................................ 123 CHAPTER 6 CONCLUDING DISCUSSION ................................................................................................ 125 6.1 Background to this Analysis .................................................................................. 125 6.2 Reflections on our Findings from the International Evidence .............................. 125 6.3 Reflections on our Findings from Analysis of Irish Healthcare Expenditure ........ 126 6.4 Reflections on our Findings from Analysis of the Potential Effects of the White Paper Model of UHI Financing ..................................................................