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Slides NERI Seminar - PGK & TH - 12 Sept 18

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Health is of central importance to well-being. The standard and reach of health services have improved in Ireland over recent decades as indeed have health outcomes. However, not all of this progress has been experienced equally by all sections of the population. In particular, there are significant and persistent disparities in healthcare outcomes adjusted for socio-economic status. Similar disparities in the level of access to healthcare and the scope of healthcare provision point to a systemic problem. This paper considers a policy approach that could deliver a single, universal, comprehensive and integrated health service fit for purpose and one to which all people can have access on the basis of need and not ability to pay. Our costing exercise demonstrates that health system transition and reform will entail additional demands on public resources with implications for fiscal policy.

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Slides NERI Seminar - PGK & TH - 12 Sept 18

  1. 1. Healthcare – Time for a New Deal Paul Goldrick-Kelly and Dr.Tom Healy NERI (Nevin Economic Research Institute) Dublin PaulGK@NERInstitute.net and Tom.Healy@NERInstitute.net www.NERInstitute.net NERI Seminar Series September 12th 2018
  2. 2. Outline 1. THE ECONOMICS OF HEALTHCARE 2. OVERVIEW OF THE HEALTH SYSTEM IN IRELAND 3. INEQUALITIES IN HEALTH OUTCOMES AND ACCESS 4. THE COST OF DELIVERING CHANGE 5. CONCLUSIONS
  3. 3. THE ECONOMICS OF HEALTHCARE SECTION 1 PGK
  4. 4. HEALTHCARE AS A GOOD • Healthcare has features of rivalrous and excludable goods: – Quantity of available healthcare falls with use (rival). eg. Hospital beds. – Access & consumption of healthcare can be limited (excludible good). • Healthcare also has public good features: – Eg. Advances in medical expertise are not rivalrous. • Healthcare often considered a merit good: – Net private benefit to individual is not fully recognised at consumption. – Consumption of a merit good results in positive externalities. Private consumption likely below socially optimal level.
  5. 5. OVERVIEW OF THE HEALTH SYSTEM IN IRELAND SECTION 2 TH
  6. 6. CATEGORIES OF HEALTH ACCESS FOR THE ADULT POPULATION 2015 Medical card only (MC) 36% MC+ private health insurance 7% Voluntary Health Care Payments (including private insurance) 36% None of these 21% Source: EU SILC estimates
  7. 7. Sláintecare Implementation Strategy Four goals and 10 strategic actions, 41 main actions, 106 ‘sub-actions’ “Strengthen the governance and operational framework for monitoring and management of private practice in public hospitals to ensure contractual compliance” (sub-action 8.1.1.) delivery=2018 1. Will it be delivered on time as promised? 2. How much will it cost?
  8. 8. TH
  9. 9. TH “These measures, discussed in Chapter 5, are designed to reduce substantially the waiting times for public patients for elective treatments. Specific targets are set so that, by the end of 2004, no public patient will have to wait for more than three months to commence treatment, following referral from an out-patient department.” Health Strategy, 2001 (page 78)
  10. 10. TRENDS IN HOSPITAL WAITING TIME BY CATEGORY OF PATIENT Source: Labour Force Survey/QNHS – 2010 unpublished 31.5 34.9 21.1 24.0 46.0 25.0 16.8 31.2 10.4 10.0 26.0 8.0 31.6 27.4 32.7 21.0 28.0 0.0 0 5 10 15 20 25 30 35 40 45 50 Outpatient Inpatient Day patient Outpatient Inpatient Day patient Waiting six months or more in 2010 Waiting six months or more in 2001 Med Card Priv Health Neither
  11. 11. DISTRIBUTION OF CATEGORIES OF HEALTH ACCESS BY EQUIVALISED INCOME DECILE FOR THE ADULT POPULATION 2015 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 No coverage Medical and GP Visit Card Only Private Insurance Source: EU SILC unpublished
  12. 12. EXPENDITURE ON HEALTHCARE IN THE REPUBLIC OF IRELAND in 2016 72% 15% 13% Government funding Voluntary healthcare payments Household Out-of- Pocket payments Source: CSO
  13. 13. TOTAL CURRENT EXPENDITURE ON HEALTH PER CAPITA IN 2015 1,828 2,234 2,318 2,442 2,747 2,767 2,820 2,846 3,049 3,113 3,208 3,474 143 170 161 518 176 501 229 244 77 272 44 124 459 597 431 529 623 238 516 675 497 473 583 515 EU27 FINLAND UNITED KINGDOM IRELAND BELGIUM FRANCE NECG AUSTRIA DENMARK NETHERLANDS SWEDEN GERMANY Public Voluntary Healthcare payments Household out-of-pocket payment Note: all values are in constant purchasing power parity (adjusted for Actual Individual Consumption)
  14. 14. OCCUPANCY RATES FOR ACUTE HOSPITAL BEDS IN 2000 AND 2015 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Austria EU17 France OECD27 Belgium Germany NECG6 United Kingdom Ireland 2015 2000
  15. 15. TOTAL WHOLE-TIME EQUIVALENT STAFF EMPLOYED IN THE PUBLIC HEALTH SERVICE, 2007-2018 Category 2007 2014 2018 (Jul.) % change 07-18 Medical/dentist 8,005 8,817 10,130 26.5 Nursing 39,006 34,509 37,408 -4.1 Health and social care 15,705 13,640 16,108 2.6 Management/Administration 18,044 15,112 18,070 0.1 General support 12,900 9,419 9,478 -26.5 Other patient & client care 17,846 17,829 24,906 39.6 Overall total 111,506 99,326 116,100 4.1
  16. 16. NUMBERS OF PRACTICING NURSES PER 1,000 OF POPULATION IN 2015 0 2 4 6 8 10 12 14 16 18 United Kingdom Austria EU22 OECD35 Canada France New Zealand Netherlands Belgium Sweden United States Australia NECG Ireland * Germany Finland Denmark
  17. 17. PRACTICING DOCTORS PER 1,000 POPULATION IN 2015 0 1 2 3 4 5 6 United States Canada * United Kingdom Ireland Belgium New Zealand Finland France * OECD35 Netherlands Australia NECG EU23 Denmark Germany Sweden Austria
  18. 18. REMUNERATION OF NURSES (RATIO TO AVERAGE WAGE) IN 2015 0.94 0.95 1.01 1.04 1.05 1.06 1.09 1.11 1.13 1.15 1.19 1.24 1.24 Finland France* Ireland United Kingdom NECG EU18 Canada Belgium Germany* Netherlands Australia* New Zealand United States
  19. 19. REMUNERATION OF GPS (RATIO TO AVERAGE WAGE) IN 2015 2.4 2.4 2.5 2.7 2.7 2.9 3 3.1 4.1 Ireland Belgium Netherlands Denmark Austria NECG France United Kingdom Germany
  20. 20. REMUNERATION OF CONSULTANTS (RATIO TO AVERAGE WAGE) IN 2015 2.2 2.3 2.6 2.6 3.0 3.1 3.3 3.4 3.4 3.5 France* Sweden EU18 Finland NECG New Zealand Ireland Netherlands United Kingdom Germany
  21. 21. INEQUALITIES IN HEALTH OUTCOMES AND ACCESS SECTION 3 PGK
  22. 22. LIFE EXPECTANCY OVER TIME
  23. 23. LIFE EXPECTANCY OVER TIME (REP. IRELAND)
  24. 24. LIFE EXPECTANCY AT BIRTH BY AREA OF DEPRIVATION, INCOME QUINTILE 68 70 72 74 76 78 80 82 84 First Quintile (least deprived) Second Quintile Third Quintile Fourth Quintile Fifth Quintile (most deprived) Male Female Source: CSO (Census of Population and records of death
  25. 25. STANDARDISED DEATH RATE (PER 100,000) 0 100 200 300 400 500 600 700 800 900 Professional workers Managerial and technical Non-manual Skilled manual Semi-skilled Unskilled Social class Persons Males Females Source: CSO, 2010
  26. 26. SHARE OF PERSONS AGED 15+ REPORTING UNMET NEEDS FOR HEALTH CARE, 2014 Source: Eurostat, 2018
  27. 27. ACCESS TO HEALTHCARE • Rates of unmet need (41% in Irel vs 27% in EU) • Finances most frequently cited impediment to care in 2014, followed by waiting lists. • Unmet need for medical examination or treatment was below EU-28 averages however at 3.3% vs 4.5%. This has increased since 2004 (2.4%). • Key problems = affordability and waiting lists. • Connolly and Wren (2017) find that those with private insurance least likely to report unmet need. • Strong correlation between unmet need and social class
  28. 28. THE COST OF DELIVERING CHANGE SECTION 4 PGK
  29. 29. APPROACHES TO HEALTHCARE FUNDING Private Insurance Social Insurance General Taxation Financial: Raising Sufficient Revenue OK (but see affordability) Some good examples of protection in austerity Problematic in times of austerity Economic Efficiency and Affordability Very Costly –may have technical but not allocative efficiency OK –cost control getting better Cheaper, extensive non-price rationing (may undermine financing) System: Complexity and degree of change Very complex organisation, regulation and system of subsidies Culture change –no SHI presence Simpler –largely in place Political: Fit with Values Private Insurance well-embedded No significant history of social insurance Taxation tolerated But what about two- tier Source: Thomas (2017)
  30. 30. HOW MUCH WILL REFORM COST? • The Sláintecare report in its costings allocates approx. €3 billion over 6 years to expand capacity. It also entails an expansion in entitlements amounting to €2.8 billion from year 10. • Expansion of entitlements amounts to a step shift in funding and entails: – Expansion of the health and well-being budget – Reduction and abolition of user fees – Expansion of primary care provision – Expanded social care – Additional funds for mental health initiatives – Funds for dentistry – Growth in activity within public hospitals
  31. 31. HOW MUCH WILL REFORM COST? • Our model assumes cost growth for current healthcare expenditure driven by: – Annual Demographic Pressure =1.6% – Annual Additional medical inflation = 1.4% – General inflation tending towards 2% – 2% annual growth factor for a separate cost scenario – Fiscal space estimates also include funding needed to meet “stand-still costs” for other public services = 1.25% per annum. • Convergence condition where public expenditure expands as a proportion of total current spending to 85% in 2029. Incorporate NDP and Sláintecare capital spend for fiscal space calculations.
  32. 32. NOMINAL CURRENT EXPENDITURE ON HEALTH BY FINANCING SCHEME 2016-2030 €0 €5,000 €10,000 €15,000 €20,000 €25,000 €30,000 €35,000 €40,000 €45,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Millions Current Public Health Expenditure with Reform Current Private Health Expenditure with Reform Current Public Expenditure without Reform
  33. 33. ESTIMATED FISCAL SPACE LEFT OVER AFTER SLÁINTECARE IS IMPLEMENTED (€ MILLIONS) -€1,000 -€500 €0 €500 €1,000 €1,500 €2,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Benign Scenario Moderate Scenario Recession Scenario
  34. 34. HOW MUCH WILL REFORM COST? • Claims on the fiscal space from health system transition and other public service standstill costs are likely substantial: – Average required between 2019 and 2030 of €1.6 billion of additional spending for health. This peaks at over €2 billion as the transition is completed in 2029. – Additional resources needed to maintain other public services in real terms and realise investment plans average over €2.4 billion. • Additional discretionary revenue is required under all growth scenarios at some point. Even under benign conditions remaining fiscal space amounts to less than 2% of aggregate spending.
  35. 35. CONCLUSIONS SECTION 5 TH
  36. 36. PRINCIPLES OF REFORM 1. Equality first Social inequality makes for sick societies ….. 2. Reset our values 3. Education for health 4. Invest in primary care (staying away from hospitals) 5. Dismantle the two-tier system (no more Q-jumping at expense of tax payer) 6. Empower health professionals (to make safe health decisions at a local level and remain accountable to the appropriate bodies. 7. Integrate healthcare in social policy …..housing, income support, social care, education, community connectivity and engagement, transport so that people can be cared for, as much as possible…...
  37. 37. IN SUMMARY 1. Keep people out of hospital! 2. No jumping of the queue!
  38. 38. www.NERInstitute.net

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