Challenges facing the adoption of SHI in Ireland Dr Steve Thomas Centre 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 Society Universal 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 Availability Context - Economic Crisis Increased Running Costs Financing 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 imperfect For “pure” models… Tax rebate important But in Ireland size of rebate bigger than income tax Verdict: Problematic but not overwhelming

Capacity Constraints - Provision Need extra supply to match increased demand BUT 1.Human Resources Low ratio of GPs to population Low number of consultants 2.Physical Infrastructure Acute Hospital occupancy rates excessively high in Dublin and Midlands Absence 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 people 2. Emigration Response: Skill mix issues (nurses, pharmacists), Importing/Retaining

System Governance Capacity Shift to a Contracting Model New 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 legislating System requires strong management and information flows

Acceptability and Stakeholders Understanding of Concept Complexity On the doorstep Stakeholder Dynamics Support 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 financing positions 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 reports Report 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