‘SHOULD I TAKE out private health insurance’? My neighbour asked me this question last week. I didn’t know how to respond.
Approximately 45% of the population can afford voluntary health insurance. Obtaining insurance can ensure consumers fast-tracked access to services, effectively skipping the queues which plague our public hospital services.
As a question, it epitomises what is wrong about our mal-funded, inequitable system – the idea of accruing an advantage accessing healthcare, based upon financial means.
Before we try to answer this difficult question of whether insurance is needed or not, it is useful to summarise the system-level impacts of health insurance in Ireland, how our ‘public’ and ‘private’ systems interact with each other and the resultant bidirectional influences.
The complex intersection of public and private
All of us will access public hospitals at certain points in our lives. If a family member has a road traffic accident or stroke they will attend the nearest Emergency Department. If your GP diagnoses cancer, a referral is made to the nearest specialist cancer centre.
If a frail relative with social-care needs becomes acutely unwell, you will bring them to the public hospital. Yes, there are problems with access and capacity, but the hospital will not say ‘no’.
However, only some of us can access the private sector, for a consultant’s opinion, a procedure, or even private care within our public hospitals. About a third of our public healthcare expenditure (€7.4 billion) goes to our curative and rehabilitative services – of this, €4.6 billion goes to public inpatient services. It is not entirely clear what is spent in private hospitals. However, approximately €5.9 billion is spent through voluntary insurance schemes and out-of-pocket expenses.
The public and private sectors are completely different, yet intertwined, making comparisons challenging. To disentangle this complexity, it is useful to reflect on the respective effects each system has on the other.
How does the public health system benefit from the private system?
The public healthcare system, including us as taxpayers, and our public hospital providers, undoubtedly derive some benefit from the private sector.
In February 2019, the de Buitléir report highlighted that private activity, within public hospitals, delivers €626 million in funding to the public sector, annually. The new cross-party Sláintecare plan advocates the removal of private activity from public hospitals, therefore this financial deficit would need to be paid for, by tax-payers.
It is logical to assume that private hospitals take the pressure off the public sector. Many procedures are performed in the private sector, especially in orthopaedics, otolaryngology, cardiology, gastroenterology etc. The fact that they are performed in the private sector means that capacity can theoretically be freed in the public sector. However, this has not happened. Long delays remain in the public system, especially in those disciplines that have buoyant private activity.
Private income, in public hospitals, also increases the salary of public consultants who choose to take on this workload. This extra income, especially for specialities which cater to billable-activity, could support recruitment to the public sector and would need to be factored if this income is removed. However, once our two-tier consultant pay disparity is finally resolved, one would assume an improved, agreed public salary should represent an equitable and fair incentive to work in our public hospitals.
How does the private sector benefit from the private health system?
But how does the private system – including the funders of private care (insurance companies) and the providers of private care (private hospitals)- impact the public system?
Whilst our public hospitals and EDs provide continuous care, 365-days of the year, most private hospitals do not. Some even close over weekends or holiday periods. Private providers, therefore, benefit from the public system taking on this responsibility.
Mostly, public hospitals look after a sicker, more frail, more disadvantaged population, who cannot meet their care needs in the community. Whereas the private hospital sector, mostly, looks after a healthier cohort of the population, with less social care requirements. Some private hospitals have intensive care beds and increasingly taking on more complex care. But the case-mix of co-morbidity, age, deprivation and social need are vastly divergent. There is a reason why private hospitals do not provide complex-trauma or stroke care or admit medically-unwell frail adults with high-care needs. This is not to say that the quality of care in private hospitals is not excellent – it is. But the reality is this sector will follow what is profitable, which is largely procedure-based care. ‘Cherry-picking’ activity is entirely understandable based upon a profit-model, whereas the public sector must look after everyone. As one example, the entirety of the acute medical programme (yet to be fully implemented), is taken on by the public sector. Therefore the private sector benefits financially.
When complications arise in the private sector (which can happen), patients are often sent to the public hospital or followed up in our EDs. That cost is incurred by the public hospitals, benefiting the private sector.
As taxpayers, we have contributed to the building of private hospitals. Maev-Ann Wren of the ESRI and Sara Burke of Trinity have both written about how governments have notionally supported public healthcare investment, yet privately supported tax breaks and the construction of private hospitals. This covert policy has led us to where we are today. Ministers for Finance, by making deals with property developers, supported by the taxpayer, have had a very large influence on the modern health landscape, with little regard to our official health policies.
Taxpayers also subsidise those who take out health insurance, through tax credits.
The National Treatment Purchase Fund (NTPF) was allocated €75 million in 2019. It effectively transfers money from the public system and delivers it to the private system, eroding public capacity further. The NTPF directly symbolises how the private sector benefits from inertia in system reform.
The private sector also benefits in a multitude of other ways. The initial cost of training and our medical consultants and nurses is incurred by the State. Medical indemnity in the private sector can be cross-subsidised by the State. Public multidisciplinary services can be used by the private sector.
There is clearly a complex and murky interplay between our public and private systems. This is deliberate and it disadvantages the taxpayer. The DeBuitleir €626 million certainly has to be addressed, but I would argue that any moneys received by insurers do not adequately risk equalise the public sector, given the benefits the private sector enjoys.
It appears that taxpayers, who are locked out of the private healthcare, subsidise those who access private healthcare. Inequality compounding inequality. What makes this debate more challenging, is the near absence of publicly-available data relating to private sector activity, which could be easily mandated by the government.
‘Should I take out private health insurance’?
At an individual level, I can understand why one would consider using their hard-earned money to take out private health insurance. It makes sense if someone can afford the cost. It may benefit you or your family and could help jump a queue, especially accessing elective procedural-care.
With that in mind, I cannot advise people whether they should, or should not take out health insurance. Everyone must assess their own situation accordingly and it’s difficult as we are being constantly reminded that we ‘need’ it.
Leo Varadkar introduced Lifetime Community Rating in 2015, then Minister for Health, which financially incentivised citizens to take out health insurance before they turned 35. We are pushed into taking it out by our government.
At a population level, it is a more complex issue, as it contributes to a healthcare inequality which is damaging to our nation. The system is not fair. Taking out health insurance is an unenviable decision to ask of any citizen.
I wonder how many of our 160 TDs have health insurance? Or our medical professionals? Or our commentators who believe Ireland spends too much money on public healthcare?
A dis-regulated private sector is encroaching into primary care, contributing to fragmented services, eroding continuity. When health insurance is discussed on the radio, it typically involves someone talking about which health insurance policy one should purchase. Conflicts of interest are rarely aired. The private sector is forceful in its lobbying and advertising.
What is most tragic, is that everyone loses in this current system, for we will all need to access a public hospital one day. Fortunately for us all, Sláintecare describes exactly how we can disentangle this complex unfair system, for the benefit of everybody.
Mark Murphy PhD MICGP works as a GP in South Inner City Dublin. You can find him on Twitter @drmarkmurphy
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