The State has been advised to provide universal health care and reverse the trend towards having more people depend on voluntary health insurance, and should also consider introducing ‘sin taxes’ on tobacco, alcohol, and unhealthy food.
The advice is in a report on the fiscal sustainability of health systems from the Paris-based OECD, which warns that Irish health costs will grow by as much as a third over the next 15 years, and more if not properly managed.
It says the country is in danger of not being able to afford healthcare for its citizens in the future, and some of that is down to the kind of cuts made during the economic crisis.
Spending on health rose faster than GDP in the boom years from 2000 to 2008 but was cut rapidly, second only to Greece and Luxembourg, when the economy collapsed, the report notes.
As well as considering ‘sin taxes’ as in France to help fund the health system, it advises having universal healthcare rather than encouraging people to rely on voluntary health insurance that is subsidised by tax breaks.
The State’s contribution to health spending is about 69% — lower than the OECD average — with the rest being picked up by voluntary health insurance, which, according to studies in several countries, including Ireland and Britain, costs the state more in the end.
The report is also critical of some of the measures taken to cut the country’s spiralling health costs during the crisis, including increasing co-payments for medicines and for hospital accident and emergency visits.
The report also warned that cutting prevention programmes — Ireland it said was one of a handful of countries that did — might have been an effective short-term solution, but could be scuppering long-term healthcare. These actions lead to unequal cover for people, put people off seeking healthcare or lead to what it termed as catastrophic effects on household budgets.
The best way is to define a basket of services covered by public health and this could cover all essential and cost-effective care. However, the report adds a note of caution — having to spend more on health is not always bad as good health is critical to people and to economic growth.
Ireland’s ability to negotiate low wages was a remarkable social compromise, but fewer personnel with lower salaries are now managing a more vulnerable population, and that can be costly in human and financial terms it said, quoting a report by Burke, Thomas, Barry, and Keegan.
The OECD report also advises that apart from cutting the cost of drugs, administration costs should be a preferred target of efficiency savings, rather than patient care, and as illustrated by the British and Greek experience.
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