The study was from 2012. We were trying to examine some of the options for Ireland in dealing with a shortfall in resources. I can show some of the slides.
One point I will be making throughout my presentation today is that I want members to keep in the back of their minds when they do their work that it does not matter whether the cat is black or white as long as it catches mice. It is a no-brainer that political values are extremely important in this decision but it is important to separate from other values the values we give politically to the role of the public or private sector, the role of competition and the role of private insurance. Politically, we may give value to the private sector but the important point is to disentangle the political debate from the technical debate in some instances.
One of the more complex issues debated with policy makers when we go on the road is the considerable confusion arising from saying one wants a system because it fits one's values. Consider the value of choice, for instance. Choice, even if it does not lead to efficiencies, is valued by populations and member states. I live in a country called Belgium, where choice has proven to lead to inefficiencies and inequalities, yet it is valued so much by the population that it is maintained in spite of the evidence. It is appropriate as long as we distinguish between the value debate and the technical debate. What I am saying is not rocket science; the members know that a million times better than I do but I assure them this is the kind of debate we often face when we work with other member states on these issues.
On raising extra funds statutorily, Ireland has some taxes on alcohol and tobacco and is considering a sugar tax and taxes on unhealthy foods. That is the way to go. We have an increasing amount of evidence on this and I will be happy to thrash it out in a minute, if members wish. I am referring to the direction member states are going. It is a way of having your cake and eating it. That is not a very good metaphor since I am talking about taxes on unhealthy foods. The tax does change behaviour. There is elasticity clearly, particularly with fizzy drinks, such as Coca-Cola and others. One may raise additional taxes to further finance the health system. Of course, the problem is that if this is effective, it kills the source of funding. I have to hand a picture showing Jamie Oliver very happy about the recent developments. There are some issues on this subject that I will be very happy to discuss with members if they wish.
Going through my list today, the third area deals with the question should Ireland change its statutory funding? Should it find additional statutory resources by other means or should it try to shift costs to the private pockets by further increasing the role of private health insurance and out of pocket? Again I have plenty of data to show what other countries are doing, the pros and cons, the use of charges, the role of private health insurance in other countries, and some of the issues and incentives. This is a very useful framework that I will use, if the committee wishes to go through it, which tries to ask three questions. The blue box in the middle cube is what one is providing.
So there are three questions. First, what would be the benefit package? Should we expand it further or reduce it? What is one producing? Second, how much of that is one paying in the form of user charges? Is one paying the whole package or, as is done in Ireland, where there are large charges? We will talk about that shortly. They are fairly substantial, not in overall terms but very large in comparative terms, in primary care in Ireland. I have data on that. In percentage terms it is around 15% of Ireland's overall expenditure. It is about the borderline - I will show the committee the data in a committee - where one may endanger financial protection, particularly because it is very much aimed at a particular area, which is primary care and hospital care in spite of the medical cards that may lead some users not to use the services properly because the user charges are quite large.
The third question to the committee is should we reduce the universal package and take some of the population out of the coverage. That is not something that member states are doing. One thing we have in Europe, where the changes have been minimal, is that there is a commitment that makes sense not just in terms of solidarity but in terms of efficiency; there is commitment for universal health coverage. So there has been very little on the "who" of reducing the universal health coverage. There is a lot of debate about the user charges - again I will give the committee details on that - and there is debate about the cost of the benefit package.
On the benefit package, most of the debate is focused on the issue of before we start rationing perhaps we should do much more work on those areas that are not cost-effective. There are many interventions in Ireland as well as anywhere - I have data on that as well - that are basically not cost-effective. If one wants to reduce the benefit package one should start in that particular area and there is evidence on that.
I would like to summarise this paragraph for the committee. As members can see I have data here on how Ireland compares with other countries on public and private expenditure. I hope I do not overwhelm the committee with so much data. Let me give one thought before we go back to that. If there is one slide that members would wish to remember today, it would be this one. I am sure they have seen it before, but I still ask them to consider it for me. We have to remind ourselves of the 20:80 distribution, the 5:50 or the 10:70. This tells us that 10% of the population in all countries will use 70% of the resources. That may vary a bit but this is based on many studies - I have data from many countries - and this is an average. Voluntary health insurance out-of-pocket will not resolve this issue. Ireland has a number of health insurers and a fair amount of regulation. No health insurer, not even some of the best regulated ones will ever cover the 10% which involves the chronically sick and so on. Private expenditure of that kind will not resolve the cost-containment issue. It may play a role if properly designed, but it will not resolve the issue.
I ask members to look at the yellow bubble. One of the problems arises because the insurers are far better than the civil servants in the Department of Health in selecting risks. Irrespective of the amount of data available, the insurers will always find ways to select risk. I know Ireland has lifetime community rating, but we all know that with a very large number of packages in Ireland there are multiple ways for the insurers to select risk. I am not criticising the insurance market. The insurance market is there to make money in many instances and therefore it is only normal to try to select risk - the incentive is there. Even with good regulation that is a very difficult issue to address.
My fourth question is about rationing. I am talking so much even in my introduction because I had all these questions in my remit so I am trying to do it in as short a time as possible. This is another slide I would like the members to remember. This is very well known data and was published in the BMJ in 2009. More recent data will look exactly the same. It tells us that out of 2,500 treatments in a hospital today for as much of 50% of them we do not know whether they are effective. Even scarier is that a number of those, like the green segment here, 8%, plus another 8% referring to trade-off benefits and harms, may be harmful although they may be unclear. While one may wish to cut the benefit package, it should be done in such a way that we start targeting first.
There have been some good developments in Ireland with pharmaceuticals, for instance, not just on price but in looking at those pharmaceuticals that are more cost-effective. We talked about the funding, a package of care and the use of charges. What can we do to squeeze more efficiency from providers? What is the menu there? The menu that the committee has in its terms of reference as well - we know there is a lot of waste - is in these slides. I will go through it again very quickly and then I would be happy to go back in detail.
There are guidelines on protocols and innovation in ICT. Ireland has a fair amount of developments in this area, but there is more scope in the sector. I am aware of Ireland's reforms in the area of payment for performance - around the DRGs, increasing the amount of payment according to activity is clearly the way to go to have a higher percentage of that to adjust for severity. Clearly we could do more work in the area of pharmaceuticals.
I know integrated care is very much part of the committee's terms of reference. Context specificity is a debate. The last country I visited, Finland, developed a very interesting pilot on experiences of integrated care. The committee there was looking for structural top-down reform. Finland is relevant to Ireland as well. Like in many other countries, Ireland wants to do things very much bottom-up and build on groups of nurses, social workers and those in community service, who are already working together, and try to strengthen that rather than try to impose new models. Integrated care has a high variability of models. What we want is teams working together offering the kinds of framework incentives and structures so that they can work together. It is good to have some top-down but also to have some bottom-up.
Ireland has a lower number of hospital beds. I know it is in the process of bringing together hospital groups. I was very impressed by one of the documents I had the opportunity to read. It was the Department of Health document, Better Health, Improving Health Care. It goes through these issues very effectively. I guess it is one of the documents of this committee.
The hospital groups may be a way to create this type of network. Due to its geographical nature and size, Ireland is not a country in which one wants to provide competition except in Dublin or large cities. Instead, groups should work together, particularly in cases of horizontal and vertical integration. There is a fair amount of scope for efficiencies. Although Ireland's number of beds is relatively small compared with others, there is more scope for horizontal integration and volume outcome. The volume-outcome relationship is another commandment, to use an almost religious term, in that there is a consensus across the region that we are not treating certain patients at the right level. That relationship is important. I do not know the details in Ireland, but I am taking an international perspective. I do not know whether the volume-outcome relationship is a major problem, but I imagine that it may be an issue.
Another area of interest for Ireland is that of skills mix optimisation. I will cite numbers in a moment. Ireland has more nurses than doctors, which is the international trend. Ireland has considerable potential to get more nurses and similar professionals into the skills mix, given the shortage of doctors. The observatory is undertaking a major study of different skills mixes. There is plenty of evidence that nurses are better than doctors - I should be cautious, as I do not know whether the rules of the committee allow me to say this - at chronic care and prevention because they spend more time with and are more empathetic towards patients. I am a medical doctor as well as an economist, so I am not against the medical profession at all, but there are many ways in which we can use nurse practitioners. Ireland is in the process of implementing, and could step up in this regard, the concept of primary care teams, PCTs. The role of nursing and similar professions is important, in particular as we move to community care. We could discuss this matter in a minute.
Interestingly, I got recently updated data on 2014 for the committee. These data show Ireland's peculiar situation. They take a bit of time to understand. The middle is the average of the EU 28, with two axes. The vertical is the number of nurses. This is in comparative terms and I am not saying whether it is good or bad. I am careful about averages. There is a sense that, if one is average, one is fine, but that is not true. At the top are countries with a high number of nurses. I believe that the green is Norway, but I cannot remember. Ireland has a higher than average number. To the right on the horizontal access is a high number of doctors. I hope that I am not making a mess of this. In the upper left quadrant is Ireland, which has a high number of nurses and a low number of doctors. What does the spread of countries tell us? Is it not an interesting presentation? It tells us that there must be a great deal of uncertainty if there is such a variation between member states in the most basic mix in health care, namely, between doctors and nurses. Imagine what the case is in respect of specialists, surgeons and other professionals. We do not know what the right mix might be.
Next are recent data from my colleagues. The observatory has done a great deal of work on migration and these data are based on the OECD's figures. It does not mention that in my presentation, so I apologise. My colleague, Dr. Irene Glinos, put these data together. They show that Ireland relies heavily on foreign doctors, accounting for as much as a third. The committee will better understand the situation of doctors coming from other countries than me. In spite of this path dependency, Ireland is the only country in Europe - I will dare to speak strongly on this point, with the Chairman's permission - that does not have universal coverage in primary health care. Primary health care is free to access in every country in the EU regardless of income or economic strength. I know about Ireland's path dependency, the significant positive strides and recent changes that have been made to cover people aged under six years or over 70 years of age with medical cards and the importance of equity in access, but universal coverage in primary health care is a principle elsewhere. Time and again, reforms have told us that primary health care provides value for money when it works well. As with any study that is shown to the committee, this one presents problems, but it tries to highlight variations in the strength of primary health care. In Ireland, primary health care does not look good. Ireland is in the red based on this.
I am cautious, cautious and cautious - I say this three times - about data and benchmarks of these kinds. I am presenting these to provoke debate in the committee.
For instance, these are the data on which we based our work. Kringos et al worked with us as well. We have been using that study, which examined issues of structure, accessibility, continuity of care, co-ordination and comprehensiveness. These numbers are indicators. Actually, there is another slide. I am sorry, and I hope that I am not confusing the committee by showing so many slides. This one may be easier to understand. It shows the structure of primary care and the delivery process. For Ireland, it is weak, weak, strong, weak, strong, weak and medium. Service delivery is on the right-hand side of the slide. Access is weak, continuity of primary care is strong, co-ordination is weak and comprehensiveness is medium. All in all, it counts as weak. We can discuss this study, as it is worth consideration.
I will make my next comment with a great deal of caution. Ireland has experts from whom I learn. I am just drawing from others and the international comparisons. Dr. Sara Burke appeared before the committee recently. She, Dr. Steve Thomas and Professor Charles Normand have done much important research and know far more than I do but, based on this research and others, user charges plus alleged access issues may explain Ireland's hospital-focused system and its difficulties in returning people to primary and community care. The committee may wish to consider this matter further. Here are more data in that regard.
In discussing primary health care, this is a good indicator. These are OECD data on hospital admission rates for patients who should not be in hospital because they would be better treated elsewhere. That they are in hospital may mean that primary care is not as effective as we wish. Look at Ireland in the spider's web on this slide. In terms of chronic obstructive pulmonary disease, COPD, Ireland has one of the highest admission rates in Europe. Why would so many patients be admitted to and treated in hospital for this? I must be cautious, as there may be many reasons. For example, it may be an incentive for some because they do not need to pay user charges or they may not be taken care of in general practice. I do not know the exact data, but the committee must examine the issue.
Other issues are also worth considering. For instance, the blue represents diabetes. Ireland is around average, although it could do better. Green is asthma and over there is CHF. Is that chronic health failure or cardiac heart failure? It is chronic heart failure. I am sorry. Sometimes, the chronics confuse me as well. Ireland is doing well in this regard and the figure shows that it is better controlled. I know what members are thinking, namely, that this does not quite make sense.
It is not a coherent picture. There are some indicators that may explain why primary care is not as effective as it could be, as well as data on the quality of hospitals and so on. Ultimately, we must work on health determinants and policies.
I am fascinated by the factors behind the decline in coronary heart disease. A comparative study into the decline in coronary heart disease looked at treatments, risk factors or unexplained factors. The results are very interesting, depending on where one carries out the study. In Finland, for example, 76% of the decline was attributed to addressing the risk factors and 24% to treatment. In the United States, 47% is explained by improvements in treatment and 44% by addressing risk factors. I must remind the committee that risk factors play a very important role in decreasing coronary heart disease. That is obvious. Ireland has a very good policy in this area, Healthy Ireland. It is worthwhile supporting and continuing to push this new policy. The work on obesity, alcohol, tobacco and so on is very important. Obesity is one of the major issues facing this country. It will have an impact on sustainability.
If committee members have time and cannot sleep some night, they could look at the OECD and WHO research data. It is actually very good but it is deep. It systematically goes through the various interventions that yield value for money by looking at determinants. There are lots of data there which show value for money is related to determinants. In terms of various policies in Europe, Ireland, with its new policy, is very much in line.
I will move on to sectoral governance covered in my last slide - I know I keep saying that but the terms of reference the committee gave me were very broad. One of the complexities that we see in reforms elsewhere is in implementation. It is a question of how one aligns incentives. It is fairly easy to look at this area by area and say that is what we should do. The really difficult thing is how to phase it in. How do we make sure that the incentives do not push us in opposite directions? We may want to rationalise hospital care but then private health insurance provides a number of incentives not to do so. We may want to have open access but then introduce a reform that goes against this. One of the elements is the alignment of incentives or reforms and then staging or phasing them in, particularly in the context of fairly complex structural reforms. The ability to stage them, to go to the low-hanging fruit, not to burn out the system or run out of capacity to implement the reforms is crucial. Many of the reforms are very complex to implement.
I presented a paper to the Council of Ministers of the European Union recently and I hope to be able to explain that here. One of the things we learned about reforms was the impact of the financial crisis. The apple tree diagram was developed by Dr. Bengoa and myself and it deals with the kinds of reforms that can be done. When there is political pressure, as was the case in Ireland and many other countries, one must go for the low-hanging fruit. A word of caution - I mean low-hanging fruit in two senses. First, starting the reforms in areas that are cost-effective, easy to do and with which one will get results. Second, low hanging fruit can also refer to situations where the Minister for Finance, as happened here, knocks on the door and says "I need a 5% cut". What has happened in many countries in Europe is that they have gone for the low-hanging fruit because of the pressure. Some of these reforms were good, including price control on pharmaceuticals which Ireland did. This was excellent because Ireland was one of the highest spenders on pharmaceuticals. Ireland's negotiations with the pharmaceutical companies and its work on generics and so on has been very much in the right direction. However, in other areas, it was not so good. Cuts to training and research, increasing use of charges, staff cuts, population exclusions, rationing benefits and so forth may save money very quickly but may not necessarily give the system sustainability in the long run. What has happened in many of the member states is that the high apples that are difficult to do, many of which will not show savings very quickly, have been left. Let us take integrated care as an example. We did some research recently which shows that integrated care increases the cost-effectiveness of the system but will not yield short-term savings. With integrated care, you treat patients better, which is the way to go. However, cost-effectiveness is not equal to savings. These are the complex areas that do not yield immediate savings but which increase cost-effectiveness. If we concentrate on those, we may have less energy to undertake the complex, structural reform implementation. Some of what needs to be done in Ireland is rather complex. It is important to focus on it, stage it, look at the alignment and so on.
I will make a few concluding remarks and then we can go into detail on any aspects of my presentation about which members have questions. In terms of implementation, caution must be taken with structural reform. I know structural reform is necessary but caution is needed. It is important always to remember context and part dependency. Marginal reforms might be more effective. It may be better to strengthen the current system rather than embark on major structural reform of insurance, for example. I spoke about alignment and the importance of the process and pace of implementation. Ireland and many countries in the region have a lot of uncertainty in their models. We do not have evidence on what is the best way to integrate services or to pay doctors and nurses, for example. I was working on a reform of the French system involving payment for performance, for example. We have some evidence on this but we do not know how actors will react. Bob Evans used to say that the only way to pay doctors is to change it every year so that they do not have time to adapt; you keep confusing them and moving them around. He suggested that the answer was to move them all of the time. That sounds cynical and I hope the committee does not mind me making such a joke. This is not a good way to pay doctors or nurses.
Technical capacity is important. I am particularly impressed with the ability and capacity of researchers and the Department of Health in this country. I had the opportunity to work with them in a number of areas. There is a lot to be done but if one tries to do it all at the same time, it will not work. Flexibility and bottom up reform are also important. If it is necessary to pass legislation, I would recommend using framework legislation that allows flexibility. I wish, if I may dare, to make a suggestion to the committee. This committee is extremely important but if it is very normative, with a big blueprint, it may find that it cannot predict what will happen in the next five years. It is impossible to predict how things will work out. I apologise for being so direct. I have seen similar committees. I wish to congratulate members for this initiative but if the committee tries, in the context of such a complex area, to devise a detailed blueprint, it may prove very difficult to implement.
The issue for this committee and similar ones in other countries is to devise a good framework, with guiding principles and a consensus on the fundamentals but to allow flexibility so that the reforms do not end up working in different directions. In terms of the low hanging fruit, political resources for change are always limited, even if this is a consensus committee. Human resources in particular, are always limited. It is important, as I said before, to concentrate on those areas that are easy to implement and about which there is consensus.
Finally, as policy makers, members of this committee know already that communication is the essence of everything. How one communicates with the medical profession is very important. It is very clear what the medical profession in this country, and elsewhere in Europe, wants. It is essential to have all of the medical professions on board. Attention must also be paid to communication with the press and the public. I know this is all very obvious. I would just point out, without mentioning any names, that I was presented with five business cases for reforms recently. They were excellent reforms but they were totally misrepresented by vested interests and they failed, even though they were technically excellent and necessary.
I apologise for taking so long, even though I was attempting to give the committee an abridged version of my presentation.