Overview

This document analyses expenditure and outputs in the Irish health system and compares Ireland to other OECD countries. In viewing cross country comparisons of health data, it is important to take into account different age demographics as older populations, in general, require more expenditure on health care. There are significant differences in age demographics across OECD countries, with Ireland having one of the youngest populations. As such, we use a simple demographic adjustment to make the cross country data more comparable.
Overview of Health Expenditure in Ireland

Total health care expenditure in Ireland is split into two areas:

1. Public health spending which is financed by taxation (including PRSI)
2. Private health spending which includes payments to private health insurers as well as out of pocket expenses such as payments for GP visits.

Public expenditure on health accounts for the vast majority of total health care spending in Ireland. Over the period 2002-2009, public health spending made up, on average, 76.5 percent of total health expenditure . Figure 1 below shows the trend in nominal public and private health expenditure from 2002-2011.

Private Expenditure Data Goes Up To 2009

Age Demographics

Ireland has the sixth youngest population out of the 34 OECD countries as measured by the proportion of over 65’s.

• In Ireland, 11.1% of the population is over 65 compared to the OECD average of 14.9%.
• Japan has the highest proportion of over 65’s at 22.7 percent.
• Germany and Italy are the two oldest countries in Europe with over 65’s making up 20.5% and 20.4% of their populations respectively.

The age demographic adjustment involves normalizing each country’s proportion of over 65’s to the OECD average of 14.9%. The adjustment factor is obtained by dividing the OECD average by the individual country’s proportion. This number is then multiplied by the expenditure and output data to give the demographically adjusted figure. For example, the adjustment factor in Ireland equals 1.34 (see table 1 below). If, for example, we want to adjust total public health spending as a percentage of GNP, we multiply the unadjusted figure of 7.7 by the adjustment factor of 1.34. This gives an adjusted figure of 10.4 percent (see table 2).

The demographic adjustment is simplistic as it assumes that health spending in each country increases at the same rate as the proportion of over 65’s increases. Nonetheless it is useful in making the data more comparable.

Table 1: Proportion of Over 65’s in Population

Source: OECD Health at a Glance, 2011
Notes: The denominator for Ireland is GNP. Demographic calculations are the author’s.

Health Expenditure In The OECD

Table 2 below shows public health spending as a percentage of GDP for the 34 OECD countries. Note that for Ireland, we use GNP as the denominator[1].

The unadjusted data ranks Ireland 13th out of 34 in terms of public health spending. After the demographic adjustment is carried out, Ireland moves up the rankings significantly ending up in first place. Tables 3 and 4 provide details on private health spending and total health spending respectively. We see that Ireland’s adjusted total health expenditure is the third highest out of the 34 OECD countries.

Table 3: Private Health Expenditure as a Percentage of GDP for OECD Countries

Source: OECD Health Data 2012. Age demographic adjustments are author’s own calculations.

Table 4: Total Health Expenditure as a Percentage of GDP

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations. The denominator for Ireland is GNP.

Outputs & Availability Of Medical Resources

We can attempt to gauge whether value for money is being achieved in the health system, by looking at how much a country spends on health care compared to its output and availability of medical resources (as in Rovere and Skinner, 2012).

We have seen that Ireland’s total adjusted health expenditure is the third highest in the OECD. We now examine medical resources to see if this high level of spending corresponds with similarly high levels of output. Table 5 summarises the performance of the Irish health system using ten key areas of medical output. All rankings in table 5 are adjusted for age demographics. Detailed tables on each area of output are given in the appendix.

• Ireland’s highest rank in terms of medical output is the number of nurses per one thousand of the population, ranking second out of 34 countries. However, caution is called for when comparing the number of nurses across the OECD as there are three different definitions used. For example, in Ireland, the data refers to the number of professionally active nurses whereas in some other countries the data refers either to practicing nurses only or nurses who are licensed to practice (see table A1 of the appendix).
• Ireland also ranks well in terms of the number of physicians (5th out of 34), the availability of psychiatric beds (6th out of 33) and the number of MRI units (7th out of 27).

At first glance, the data suggests that Ireland has a low number of hospital beds (19th out of 34) and acute care beds (17th out of 33). But the thrust of health policy in Ireland is focused towards developing primary care services in the community which will allow people to receive care outside the hospital. As of June 2012, there were 485 primary care teams in operation throughout the country. These primary care teams are teams of health professionals who work together to provide care in the community. The adjusted data also shows that the number of hospital beds available in Ireland is on par with the Netherlands which is considered to be one of the highest performing health systems in Europe.

As shown in table 5, the two areas where Ireland ranks lowest are coronary bypasses (22nd out of 31) and knee replacements (24th out of 28).

Table 5: Ireland’s Rank On Expenditure Compared To Its Rank On Indicators Of Output Of Medical Resources Among OECD Countries

Source: OECD Health Data 2012.

Notes: Age demographic adjustments are author’s own calculations. The denominator for Ireland is GNP.

References

• Bjornberg, Arne. 2012. “Euro Health Consumer Index 2012”, Health Consumer Powerhouse
• European Observatory on Health Systems. 2009. “Ireland Health System Review”. Health Systems in Transition (11) 4.
• Organisation for Economic Co-operation and Development (OECD). 2011. “Health at a Glance 2011. OECD Indicators“
• Rovere, Mark and Brett J. Skinner. 2012. “Value for Money from Health Insurance Systems in Canada and the OECD”, Fraser Institute
• Skinner, Brett J. 2009. “Canadian Health Policy Failures: What’s Wrong? Who Gets Hurt? Why Nothing Changes”, Fraser Institute

Appendix

Table A1: Nurses per 1,000 Population

1. Data refer to practising nurses. Practising nurses are defined as those providing care directly to patients.
2. Data refer to professionally active nurses. They include practising nurses plus other nurses working in the health sector as managers, educators, researchers, etc. (adding another 5-10% of nurses).
3. Data refer to all nurses who are licensed to practice.
4. Age demographic adjustments are author’s own calculations.

Table A2: Physicians per 1,000 Population

Source: OECD Health Data 2012

1. Data refer to practising physicians. Practising physicians are defined as those providing care directly to patients.
2. Data refer to professionally active physicians. They include practising physicians plus other physicians working in the health sector as managers, educators, researchers, etc. (adding another 5-10% of doctors).
3. Data refer to all physicians who are licensed to practice.
4. Age demographic adjustments are author’s own calculations.

Table A3: Psychiatric Care Beds Per 1,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A4: MRI Units Per Million Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A5: CT Scanners Per Million Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A6: Acute Care Beds Per 1,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A7: Hip Replacements Per 100,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A8: Hospital Beds Per 1,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A9: Coronary Bypass Per 100,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations.

Table A10: Knee Replacements Per 100,000 Population

Source: OECD Health Data 2012.
Notes: Age demographic adjustments are author’s own calculations..