The Economic and Social Review, Vol. 49, No. 1, Spring 2018, pp. 93-109
Sheelah Connolly* ESRI, Anne Nolan ESRI, Brendan Walsh, ESRI, Maev-Ann Wren ESRI
In 2011, the Government made a commitment to the introduction of universal General Practitioner (GP) care, which they linked to the removal of fees for GP care. The aim of this paper is to quantify the potential cost implications of implementing universal GP care in Ireland. The analysis finds that universal GP care would add between 2 and 3.5 per cent to overall public healthcare expenditure and up to 1.2 per cent to total healthcare expenditure. Some progress, however, has been made in introducing GP care, free at the point of use.
The Irish healthcare system is a complex mix of public and private financing and provision (Evetovits et al., 2012). While healthcare financing relies predominately on public sources of finance, private health insurance (PHI) and direct out-of-pocket payments by individuals are also important sources of finance in the Irish context (Central Statistics Office, 2016). Currently, there are two main categories of entitlements to public health services. Category I (full medical card holders) are entitled to free public health services but pay a co-payment for prescription items (Hudson and Nolan, 2015). Category II are entitled to subsidised public hospital services and prescription medicines but must pay the full cost of GP services (Brick et al., 2010).
In October 2005, the GP visit card was introduced. Holders have the same entitlements to free GP care as Category I individuals, but the same entitlements to all other public health services (including prescription medicines) as Category II individuals. Eligibility is assessed primarily based on an income means test. Individuals may be granted one on a ‘discretionary’ basis, if they have health needs which would cause them undue hardship (Health Service Executive, 2015a). In 2016, approximately 43% of the population held PHI (Department of Health, 2017), which mainly provides cover for private or semi-private acute hospital services. Recent analysis suggests that those without free primary care and/or PHI are more likely to have an unmet need for healthcare (Connolly and Wren, 2017).
In Ireland, GPs are self-employed and are free to set their fees for private (Category II) patients; in addition, they may have a contract with the State to supply care to public patients (those with a medical or GP visit card) (Smith and Normand, 2011). In 2015, more than 92 per cent of GPs under the medical card schemes signed up to the contract providing for free GP visits for the under sixes (Department of Health, 2015b). However, this was opposed by some GP organisations (Goodey, 2015). Following extended negotiations between the Irish Medical Organisation and Department of Health an agreement was reached on a fee structure for extending free GP care to all children aged six and under (Ring, 2015).
The purpose of the analysis by Connolly et al is:
(i) To identify different methods that might be used to set a reimbursement price for universal GP care in Ireland;
(ii) To apply these methods to estimate the impact of universal GP care on public and total healthcare expenditure in Ireland.
Table 1 details the current system of reimbursing GPs in Ireland and the three alternative scenarios used in this analysis to assess the potential cost implications of universal GP care. Different surveys were used to estimate visiting rates (Wren et al., 2015).
Scenario 1 assumes that the capitation
rates for GPs’ provision of care, free at the point of use will apply existing
GP capitation rates and mean additional payments for cardholders’ care. Scenario 2 assumes that remuneration
rates will consider the increased demand for universal GP services among
previous non-cardholders. Scenario 3
assumes that the State will seek to reduce costs by encouraging a supply-side
response to change skill-mix in general practice. A range of rates are used by Connolly et al. in
order to identify a range of potential cost implications of universal GP care.
The base year for the analysis is 2013 and uses 2013 data from Wren et al.
(2015) as it captures GP expenditure as a single category.
Table 1: Overview of the three scenarios used to cost universal GP care
Table 2: The impact on public healthcare expenditure of extending free GP care to the full population, 2013
1 – The range reflects different visiting rates emerging from different surveys
2 – Skill-mix savings applied to the estimated cost of universal GP care estimated from Scenario 2 (demand driven approach)
Table 2 shows the impact on public healthcare expenditure of the introduction of universal GP care, free at the point of use, using the three alternative methods identified above. For previous non-cardholders, the cost to the State of introducing free GP visits is €492 million per annum for Scenario 1 (existing capitation rates), €401 million to €489 million per annum for Scenario 2 (demand driven approach – which found that GP visits by former non-cardholders would increase by 2.55 million, implying an overall increase in GP-visiting of between 16.7 and 18.7 per cent), and €337- €418 million for Scenario 3 (supply-side response).
The overall increase in total healthcare expenditure of introducing universal GP care represents an increase of between 1.8 and 3.4 per cent of public health expenditure in 2013.
Table 3 shows that the impact on total healthcare expenditure of introducing universal GP care is less than on public healthcare expenditure because a significant proportion of the cost to the State reflects payments that were previously made out-of-pocket by individuals. The additional expenditure (ranging from 0 to 1.2 per cent) largely reflects the additional demand for GP visits arising from a drop in the price at the point of use.
Table 3: The impact on total healthcare expenditure of extending free GP care to the full population, 2013
1 – The range reflects different visiting rates emerging from different surveys
1 – Skill-mix savings applied to the estimated cost of universal GP care estimated from Scenario 2(demand driven approach)
Introduction of universal GP care, free at the point of use in Ireland would result in an additional cost to the State of up to €500 million per annum. However, a significant proportion of this additional cost reflects a shift in spending from private individuals paying out-of-pocket at the point of use to the State paying for GP visits under a capitation scheme. Therefore, much of the additional expenditure does not reflect a net cost to society but rather a change in how contributions for healthcare services are made.
There are limitations to the current analysis. Due to the lack of a national administrative dataset, it is necessary to rely on survey data to estimate GP visiting rates. Recent research has highlighted weaknesses in the Irish primary care system in domains other than accessibility (Kringos et al., 2013a). Other factors such as the availability of GPs in rural and deprived areas may also act as barriers to accessing GP services and should be considered in future research. Demographic change, including an increase in the number of people in the population, as well as an increase in the number of older people, will result in a significant increase in demand, irrespective of changes in policy towards universal GP care (Wren et al., 2017). A high proportion of GPs over the age of 55 will likely result in many retirements in the next ten years, reducing the supply of GPs, a situation which will be worsened by a high proportion of current trainees expecting to leave Ireland after training (Health Service Executive, 2015b).
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