Press Release

Statement by Minister Varadkar following Cabinet discussion on UHI

  • Govt to continue implementing comprehensive programme of health reform
  • More research commissioned into UHI before final model chosen

The ESRI and the Health Insurance Authority are tomorrow publishing three studies on Universal Health Insurance. Minister Varadkar brought a memorandum on their reports to Cabinet today. Speaking after the Cabinet meeting, Minister Varadkar said:

“The Government remains committed to effective universal healthcare, which is defined as access to affordable, effective quality care for everyone in a timely way. A system of Universal Health Insurance is still our preferred model to achieve universal healthcare.

“However, the high costs for the particular model of health insurance analysed in the new ESRI report are not acceptable, either now or any time in the future. The ESRI report therefore vindicates the Government’s decision not to rush the implementation of UHI.

“It’s clear that before we proceed and make a decision on which funding model to adopt, a number of foundations should first be in place.

These are:

  • sufficient capacity to satisfy unmet demand – in terms of specialists, critical care beds, and other infrastructure;
  • enhanced primary and social care – significant progress already made with GP care without fees for under sixes and over 70s, enhanced chronic disease management in primary care, and making Fair Deal a demand-led scheme with applications being addressed within two to four weeks – but this is only a start;
  • reformed structures to replace the HSE with Hospital Groups and Trusts, Community Healthcare Organisations and other new structures;
  • financial reforms including activity based funding (“money follows the patient”);
  • Healthy Ireland and the public health and patient safety agendas.

“While the decision on the funding model could be made towards the end of the term of the next Government, I do not believe it could be implemented in the term of the next Government as these reforms will take at least five years to complete, in particular the increases in capacity and staffing.

“It is unlikely that there is ever a perfect time to change funding models but the ESRI and KMPG research, which is based on 2013 data, certainly points to the fact that to do so during a financial crisis would have been wrong. Neither the Exchequer nor families would have been able to bear the considerable additional cost in terms of subsidies or increased insurance premiums. The delivery of the reform programme must be completed first so that the foundations are in place to change the funding model.

“Reform in the past was rushed and as a result serious mistakes made such as at the time of the establishment of the HSE in 2005. When these reforms are complete, we intend to revisit the precise model of universal health insurance, and will compare the pros and cons of a number of funding options. The decision on which model to adopt will be made by the next Government and implemented in the term of the Government after that.”

ENDS

Further information

The reports represent an initial costing exercise for UHI and were commissioned from the ESRI and KPMG by the Department of Health and the Health Insurance Authority, following the publication of the UHI White Paper in 2014.

The research makes a valuable contribution to the debate on funding models. However, they represent an initial piece of work and are based on 2013 data. The ESRI concludes that more research is needed in this area before definitive conclusions can be drawn about the best type of model to implement universal healthcare in Ireland. It has therefore been decided to conduct further research on the cost of meeting unmet need, and an analysis of alternative funding models for universal healthcare. This will be overseen by the Department of Health and the ESRI under their three year Research Programme on Health Reform.

The studies show that the original UHI model of multi payer health insurance would involve additional costs of more than €650m, which would not be outweighed by benefits in terms of improved patient outcomes, lower healthcare prices or lower premiums.

The UHI White Paper envisaged a multi payer type of health insurance model. However in 2014 the Minister for Health took a decision to move more slowly on universal health insurance and switched the Government’s short term focus to universal primary care.

Given the need for further research, and to complete the health reform programme already underway, the decision on a future funding model will be taken in the latter part of the next Government term and implemented in the term thereafter.

Download a copy of the reports below:-

An examination of the potential costs of Universal Health Insurance in Ireland, ESRI Research Series Report, ESRI: Dublin – Wren M., S. Connolly and N. Cunningham (2015)

Income-Related Subsidies for Universal Health Insurance Premia: Exploring Alternatives Using the SWITCH Model, ESRI Working Paper, ESRI: Dublin – Callan T., B.Colgan and J.R. Walsh (2015)

UHI Premia Costing Report (prepared by KPMG on behalf of the Health Insurance Authority)