3. “UHI”
• What is it?
• Compulsory private health insurance, with a ‘public
option’
• Social insurance , like PRSI
• A mix of both…
• Both underpinned by existing taxation – how much?
• A market or a social scheme?
• Equal, always-on, 24/7, free care?
• Universal health care
• A lot of work… people, processes and projects
ooc@sky.com
4. People
• Minister for Health – keen to get on with it
• Minister for Finance – keen to reduce deficit
• 2.1 million insured – keep it, low cost
• 2.3 million not insured – services, fairness, cost
• 2,400 consultants – decisions, power, earnings
• 2,500 GPs – salary, fees, support
• 100,000 other public servants
• 38-52 acute public hospitals – status, roles, funding, accountability
• 19 private hospitals – roles, pricing
• 3 insurers, maybe more – costs, profits
• EU Commission – keep the rules
• EU/IMF oversight
ooc@sky.com
5. • Health Acts, 1970-2005
• Health Insurance Acts 1994-2009
• VHI Acts 1996-2008
• Minimum Benefits Regulations 1996 –
• Statutory hospitals instruments – for all hospitals
• Competition Acts
• Finance Act
• Risk equalisation scheme
• EU Competition Directorate
• EU Single Market Directorate
• Employment contracts consultants, GPs, other
ooc@sky.com
6. • Economic and cost rationale • VHI capitalisation and
• Goals clarity authorisation
• Clarity for public entitlements • Negotiate contractual changes for
• Sequencing clarity doctors and others
• Government approval • Set pricing policies
• Policy directions for primary • Tax / premium mix
legislation • Cost control mechanism
• Write primary legislation • Board for every hospital
• Secure EU agreement • Set and administer payment
• Publish, consult, debate, amend, mechanisms
enact • Ensure administrative interface
• Secondary legislation: draft, with the public
publish, consult, finalise • Go live
• New purchasing public agency –
establishment, staffing,
governance, administration
ooc@sky.com
8. Slightly less basic
General taxation Govt Annual budget HSESalaries, grants
Govt usage charges
Tax relief
Fees, charges
Insurance policy premia
Insurers
Direct out of pocket fees
ooc@sky.com
9. Is this the new world?
General taxation Govt Salaries,
grants,
capitation
Health Insurance Fund
Compulsory premia Fees, charges
State VHI +
Top-up premia Commercial
Insurers
Direct out of pocket fees?
ooc@sky.com
10. Or will this actually happen?
General taxation Govt
Pay-related
“State Salaries, grants, capitation
premia Fund Fees, charges
/VHI”
ooc@sky.com
12. Are we forgetting…
THIS?
• Services
• Quality, development
• Primary-acute integration
• How does the financial
channel design impact?
• No dominant best way
ooc@sky.com
13. Justify complexity
• Everything should be made as simple as
possible, but not simpler (Einstein)
• What does the arrangement of financial
‘intermediation’ achieve?
• It’s large scale change
ooc@sky.com
14. Large scale change
• “Evidence from health system reform in other
countries suggests that, in general, it is better to
avoid major re-organisations of structures … and
to focus instead on changes in the mechanisms
and incentives within existing structures”
Report of the Resource Allocation Group, Chapter 2.2.1
“A White Paper on Financing UHI will be
published early in the Government’s first term
and will review cost-effective pricing and funding
mechanisms for care and care to be covered
under UHI”
Government for National Recovery 2011-16
ooc@sky.com
15. Design Choices
• Stated objectives vs probable outcomes
• Fundamental choices to be made
• Unavoidable realities
ooc@sky.com
16. What does it mean to …
• People / patients
• Providers – hospitals, primary care
• Insurers
• Government / taxpayers
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17. People
• What benefits do I get?
• By virtue of - public law or enforceable contract?
• How much do I pay? More or less than now?
• Different answers for different people – some will
pay more, who?
• What choices do I have? Of provider? Of
intermediary? Of how much I pay? Of what I get?
• Competence, choice, respect: trust
ooc@sky.com
18. Providers
• ‘Any willing provider’ – great idea, but much
detail needed
• Contracts for services – but acceptance of limits,
undertakings outside service
• Pricing and product design freedom
• Who pays them? One pool?
• State implicit underwriting for public providers –
fair competition? Subsidies for whom?
• UK Monitor-type role needed
ooc@sky.com
19. Providers
• “Public” hospitals – all becoming n-f-p trusts
– Ownership of assets
– Accountability: who appoints/dismisses board/ceo
– Financial failure – underwriting – local politics?
• Private hospitals
– Free to enter, to price, to design services?
– Anything beyond ‘basic package’
– Consultant staff – public contract holders?
– Profitability/viability
– Competition and fair playing field
ooc@sky.com
20. Providers
• Primary care providers
– GPs and all - salaried state employees?
– PC centres – how many, how big, no HSE
• same issues for public hospitals: management,
competence, accountability, financial management
• Private primary care/other services
– Who pays? What rate? Freedom to enter?
– Contracting out – no reason why not
ooc@sky.com
21. Insurers
• Why engage?
• Make profit: benefit design, customer
selection, cost control, pricing: profit
• Is it a fair market?
– VHI ‘dominance’, authorisation and capitalisation
– Function as a State-mandated ‘public option’
– What type of Risk Equalisation?
• Is it a market at all?
– Competing insurers without competition law…
ooc@sky.com
22. Competition law
• Critical issue for commercial insurers and providers.
• German case cited (AOK 2004)
• The concept of an undertaking in Community
competition law does not cover bodies entrusted with
the management of statutory health insurance and
old-age insurance schemes which pursue an
exclusively social objective and do not engage in
economic activity
• Unattractive to commercial insurers – policy choice
ooc@sky.com
23. Government - taxpayers
• Money limit – even in good times
• Unlimited activity = great benefit = unlimited cost =
unlimited taxation/premia
• New benefits = new cost
• New cost = new tax or redistribution from current
beneficiaries. Is enough available?
• Cost control necessary: how?
• Budget limited money will follow the patient
• Solvency (and reserves) of insurance entities necessary
• Annual budgets here to stay
ooc@sky.com
24. Government - taxpayers
• Money limit – in tough times
• Public expenditure savings and limits
• New insurance premia - collection via payroll
• No increase in income tax rates, bands or
thresholds?
• EU competitiveness pact – move away from
labour taxes
• Critical issue of VHI derogation/authorisation
• Capitalisation of VHI – 100-300m – EU/IMF
compatible? Prudent investor? Competition?
ooc@sky.com
25. Conclusions
• Immensely complex: take do-able steps in careful sequence
• Worth addressing primary care – but with no role for insurers?
• Worth improving equality in publicly-funded services
• Worth providing clarity on entitlements and service commitments
• Worth using all capacity for public patients by purchasing
• White Paper has task cut out
• Provide clarity fast. Without it, commercial insurers will stay wary
• No market without players; no willing providers without
commercial benefit
• Forget comparisons with Dutch, German, French, US, etc.
• Build solutions and improvements for Ireland
• For patients: important still to focus on constant improvement in
services, cost, outcomes – and choice, respect, trust
ooc@sky.com
Editor's Notes
Here is a selection of the type of projects necessary to introduce large scale change for an expanded role of health insurance in IrelandMeantime you have to keep everything else going – not just the operational health services, but debates, order of business, other legislation, PQs, budget surveillance – as AtulGawande points out, this is why path dependence and incremental change is the nature of health service reform in most countries
Here’s the simplied diagram used by the Resource Allocation Group to illustrate people paying their doctors and other clinicians for healthcareLets try now to fill out some complexity….
Or as the Resource Allocation Group reported last July….But the argument would be, of course, that just as the HSE was necessary to replace the Health Boards, so also is the scale of change envisaged now for health insurance… In fairness to all sides, it can be agreed that big change is big disruption, takes a long time, and incites opposition…. Question is, is it worth it? And when will you know?
