A recent research paper on private health expenditure and the affordability of private financing of health care in Ireland warns us that “reliance on private health expenditure as a funding mechanism undermines the fundamental goals of equity and appropriate access within the health care system.”

Another research paper puts it even more bluntly:

“Ireland ‘is the only Western European country that does not offer universal coverage of primary care, with 60% of the population paying out of pocket on average €52 per GP visit and two thirds of the population paying up to €144 per month for drugs as well as paying for other primary care services.”

An emergency room visit without a GP referral is €100, a night in a hospital is €80 (up to an annual cap of €800) and even for those who sign up for the drugs payment scheme drug costs can be up to €144 per month.

Ireland had “the second highest rate of unmet need for healthcare due to cost, distance or waiting lists among EU countries in 2014,” and the research shows an increasing incidence of “unaffordable private health spending” on user fees and private health insurance as patients seek to avoid long delays.

The origin of Ireland’s two-tier system goes back to 1946. In Britain, Aneurin Bevan won his battle with the Tories and the BMA to push through the legislation to establish Britain’s NHS: but in Ireland a popular but much less ambitious plan of free healthcare for mothers and children under 16 years was blocked by the power of the bishops and the conservative medical profession.

Eleven years later, as Irish journalist Maebh Ní Fhallúin recounts “the government established the VHI [voluntary health insurance] in its current form, a subsidised semi-state company that provided health insurance to those who could afford it. This policy decision resulted in the creation of a two-tier health system and remains in place today.”


VHI, covering 45% of the population and entrenching a 2-tier system, is now seen as a critical impediment to the implementation of a system of universal healthcare.

This is the hidden reality behind the Irish government’s assurances that “Ireland has a comprehensive, government funded public healthcare system.”

Ireland’s Health Service Executive itself goes on to say that: “Over 30% of people in Ireland have medical cards. Medical Cards allow people to get a wide range of health services and medicines free of charge. … People without medical cards can still access a wide range of community and hospital health services, either free of charge or at reduced cost.”

More accurately, researchers sum up:

“Ireland’s two tier health care system means that although everyone can access the public health system, PHI [private health insurance] allows people to gain preferential access to elective care in both public and private hospitals and diagnostic tests.  Ireland does not have universal coverage for primary care and access and associated charges for services in the public system are determined by an individual’s circumstances.”

The problem has been getting worse:

“During the period of the financial crisis many countries in the EU, including Ireland, shifted the burden of health care financing onto private sources. In Ireland nearly €500 million of the cost of some aspects of healthcare was transferred from the State onto people between 2008 and 2014. Consequently, the proportion of total funding coming from private health expenditure increased from 21% in 2008 to 30% by 2015.”

Irishisation threat to NHS

It is this two tier arrangement, in which a massively under-funded public sector is combined with the VHI scheme that should serve as a warning for what could happen to our NHS if current trends continue: it is the Irishisation of the NHS rather than Americanisation that seems a more likely threat.

As in the USA, Irish medical costs have been outpacing inflation – increasing six times faster – pushing up VHI premium payments by 6% this year. But at the same time public sector spending is being reined in, and the gaps in care and delays in treatment in the public hospitals are becoming a scandal.

The Irish Cancer Society has warned that cancer patients can face extra costs of up to €1,200 per month for drugs and hospital visits – “everything from chemotherapy appointments to anti-nausea medication and hospital parking charges.”

University Hospital Limerick had a record 81 patients waiting on trolleys for emergency care in mid-September, and there are many signs the under-funded public system cannot cope.

As in Britain and elsewhere, the private sector largely avoids providing emergency or urgent care, which makes up most of the caseload of public hospitals; nor do private hospitals provide integrated rehabilitation for patients needing multi-disciplinary care.

So, as in England, “Most patients admitted as in-patients to public hospitals are not suitable for care in a private hospital, including most patients admitted via A&E. That is why there are patients with top level health insurance on trolleys in public A&E departments while there are beds empty in nearby private facilities.”

The problem is that while up to 20% of Irish public sector hospital beds can at present be used for private patients, in practice far more are taken up, with up to 50% of all patients in public hospitals having private insurance.

Beds are in short supply, despite growing population: numbers fell during the financial crisis, and it’s now estimated that up to 15,000 more acute beds are needed above the current 12,000. Public hospitals are running at 110% occupancy.

As in England, academics claim that an expansion of nursing home places could relieve the pressure on hospitals, but this is not costed, and there is no plan to make this happen.

To make matters worse, ministers have given tax breaks for private hospitals which have encouraged a further growth in that sector – to the detriment of public hospitals, not least in the diversion of scarce specialist doctors. As the Irish Times pointed out back in 2003:

“This State encouragement of private medicine has been grafted on to a system in which private hospitals are primarily staffed by hospital consultants on public salaries. Of the 790 consultants staffing private hospitals and clinics in January, 75 per cent held public contracts.”

Even though Fine Gael plans to switch to a Dutch-style insurance-based model were dropped on cost grounds in 2015, the contradictions of the two-tier system remain unresolved. It falls short of the access to universal health care which governments around the world in 2015 committed themselves to work for in the UN’s Sustainable Development Goals (SDGs).

Sláintecare report

As a result in May 2017, an Irish cross-party parliamentary committee published proposals for ambitious reform, known as ‘Sláintecare’ – the first time there has been a cross-party political consensus on major health reform in Ireland.

But the consensus seems to have been short-lived. No minister was present at the end of August to launch a much delayed follow-up report. It was released with minimum publicity. It exposes institutionalised inequalities in access, funding and provision of care – and controversially proposes to remove private work from public hospitals within five years.

The income to hospitals for this work is estimated at €650m per year, and the proposal has triggered questions over the financial and practical implications of implementing the change, as well as predictable angry responses from some top medics, who are resisting any change to their contracts that might limit their private work.

One argued in Business Post: “The middle-class ‘socialists’ extolling a public-only system won’t be seen for love or their insurance money in these hospitals. Public hospitals will become places where few will want to work. Hospital doctors, nurses and therapists are already shunning what were once highly sought-after positions in the public system for jobs in private hospitals.”

Higher pay in private sector

Some of the doctors have plenty to lose. Many have been drawn to the much higher pay in the private sector: doctors working full-time in the private sector can expect to earn anywhere from €280,000 to €1 million: by contrast those in the public system hired since 2012 are typically paid between €112,000 (if they are allowed to work off-site) and a maximum of €165,000 (public-only work).

The Sláintecare reforms could increase this to €182,000, but still fall short of private sector levels.

But the problems aren’t restricted to the hospital sector; there has also been a process of corporatisation of primary care through the injection of private capital into the development of primary care centres (PCCs), and private firms’ increasing influence over general practice through partnerships with doctors.

About 55 per cent of Ireland’s PCC premises are leased by the HSE from private landlords, and 10 per cent are (PFI-style) PPP projects: just 35 per cent of them remain in public ownership. American, Australian and British capital is involved in this market as well as Irish companies.

A recent overview in Business Post notes that:

“Critics of corporate ownership in general practice say it drives up referral rates, lengthens waiting lists, reduces investment in the practice, breaks continuity of care and erodes accountability by diminishing GPs’ control.”

While the future of Irish healthcare, and the commitment of the government to its own reforms remain uncertain, the harsh inequalities, financial costs and gaps in the Republic’s flawed two-tier health system continue.

They are one reason why the voting public in Northern Ireland might fear growing links with the Republic – as well as a stark warning as to what could become of England’s NHS if the chronic under-funding is not reversed.

Dear Reader,

If you like our content please support our campaigning journalism to protect health care for all. 

Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.

Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.

Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.

Please donate to help support our campaigning NHS research and  journalism.                              


Comments are closed.