Reform plans could see healthcare costs rocket

James Reilly’s plans for reform of the health service could see the cost of providing universal healthcare in Ireland rise by up to 50% within five years, an economist has warned.

The health minister is determined to push ahead with a system introduced in the Netherlands four years ago.

The Dutch programme, based on regulated competition in the private sector, has been almost universally praised by patients, but the per capita costs associated with it have soared since Jan 2006.

“There has been a huge rise in the cost of healthcare in the Netherlands,” said Dr Brian Turner of the economics department in University College Cork, which tomorrow hosts a forum on health reform.

“Between 2005 when the old tax-based system ended and 2010, per capita health spending in the Netherlands has risen by 46%. While there would probably have been cost increases anyway and not all of that rise can be attributed to the change, it has been so sharp that it must account for most of it.

“There is no doubt that the Dutch are spending far more on health since they brought in the new system.”

Under the Dutch programme, each citizen is required by law to buy individual health insurance from an insurance company of his or her choice. The consumer pays a flat rate premium to the insurer at a minimum of about €1,200 a year. Each individual pays an additional income-related tax contribution to the government to help subsidise premiums for low-income groups.

The system is ranked top among European health services. However, according to Dr Turner, that assessment is based mostly on customer satisfaction and fails to take into account the huge costs of the service.

He warned against rushing into a new system that might not work in Ireland even if it is a success elsewhere. “You cannot simply parachute a system from the Netherlands to Ireland because there are major differences between the two countries. For one thing, they have a population more than three times ours.”