Challenges facing the adoption of SHI in Ireland

Dr Steve ThomasCentre for Health Policy and

Management, Trinity College Dublin

Objectives

• To review• What SHI is and rationale• Emerging Models for Ireland

• To highlight

• Key Obstacles & Challenges

• Perceived vs Real

• To reflect on the way forward

SHI – Basic Features

• Insured persons pay a regular contribution based on income or wealth.

• Access to treatment and care is determined by clinical need and not ability to pay.

• Contributions to the social insurance fund are kept separate from general budget funds

• The social insurance fund finances care on behalf of the insured persons (pays public and private providers).

Why SHI for Ireland

• No-one likes what we have• Only Few Financing Options

– Free Market - Afghanistan– Tax based - UK– Private Insurance – America, The Netherlands– Social Insurance – France, Germany

• Selling points SHI: Earmarking/Transparency, Contracting/Incentives, Universality, Resilience?

Competing Models?• Fair Care - Fine Gael

Dutch Model – Universal multiple fund private insurance model

• Adelaide SocietyUniversal Single Fund (Non-Government &

Not for Profit) model• Labour (under consideration)

Universal Social Insurance model (April 2010 floated multiple funds + public insurer)

Obstacles (Perceived and Real)

1.Resource AvailabilityContext - Economic CrisisIncreased Running CostsFinancing mechanisms

2.System Capacity– Physical Infrastructure– Human Resources– Architecture and Interactions

3.Politics

The impact of the economic crisis on the prospects for SHI?

Context: Economic Crisis

Threats

– Constrained resources (taxation collapse, debt servicing)

– Service cuts/reductions

– Morale loss through lower pay and service cuts

Opportunities

– Need for reform highlighted,

– Efficiencies made possible (some already in effect),

– Stakeholders more amenable to reform

Additional Costs

• Adelaide III (2010) - additional cost of SHI • For the “Levelling Up” Model:

• Free medical cards for all • As if private insurance for all

• 3.1% extra costs with modest efficiency gains (recession windfall)

• Bail-out legacy - costs likely to decrease further • Verdict: Case not proved

Financing Mechanisms

For multiple fund models…• Risk equalisation important• But … complex, costly and imperfectFor “pure” models…• Tax rebate important• But in Ireland size of rebate bigger than income

taxVerdict: Problematic but not overwhelming

Capacity Constraints - Provision

• Need extra supply to match increased demandBUT1. Human ResourcesLow ratio of GPs to populationLow number of consultants

2. Physical InfrastructureAcute Hospital occupancy rates excessively high in

Dublin and MidlandsAbsence of Primary Care Facilities

Capacity Constraints – Provision II

Acute hospital capacity:May be less of a problem IF efficiencies can be

made and Primary Care system much improved

Biggest problem:Human Resources 1. It takes time to train people2. EmigrationResponse: Skill mix issues (nurses, pharmacists),

Importing/Retaining

System Governance Capacity

Shift to a Contracting ModelNew and adapted institutions (Funds,

hospitals)New ways of relating (Activity-based funding,

regulation) Government has primary role in designing SHI architecture, monitoring, defining benefit package and legislatingSystem requires strong management and information flows

Acceptability and Stakeholders

• Understanding of ConceptComplexity On the doorstep

• Stakeholder DynamicsSupport vs Opposition

Providers (Public and Private), Civil Servants, Politicians, Civil Society,

Building Coalitions

Conclusions

SHI has advantages...

But can't be achieved overnight (5-10 years)

Several obstacles: HR, system workings, opposition

Surmountable if

1. We take action now

2. The economy picks up at some stage

3. We have the heart for change

The End

Adelaide Report 4 – Policy Analysis

To identify whether the concept of SHI is understood

To identify and understand stakeholders'views and values about health financingpositions towards SHI power to influence change

To identify the perceived technical and political strengths and weaknesses of SHI

To develop strategies for taking forward SHI

What do we need from any financing system?

Raising revenue – steady, predictable, sufficient

Sharing risk/solidarity – the larger the risk pool the better

Protecting the poor – subsidy & no “hidden” taxation (charges for services)

TCD Programme of Research on SHI

Series of Adelaide reportsReport 1: Concepts, Design, Cost and

Contribution (2006)Report 2: Cost Escalation, Capacity, Phasing

(2008)Report 3: Financing Base, Organisational Design

(2010)Report 4: Stakeholder Support/Opposition,

Acceptability, Understanding (2011)

Organising the funding of SHI

Households

SHI fund

Other taxes Income tax

Income tax rebate

GovernmentTaxes

Income taxrebate

Payrolldeductions