Careful, Canada: What Ireland has learned about two-tier health care

This column is an opinion by Steve Thomas, director of the Centre for Health Policy and Management at Trinity College in Dublin, Ireland. He has been studying the issue of privatization in Canada, is the author of a chapter on Canadian health care in the book ‘Is Two-Tier Health Care the Future?,’ and has collaborated with the University of Toronto and University of Ottawa. For more information about CBC’s Opinion section, please see the FAQ.

Be careful what you wish for, Canada.

One way or the other, Canadian courts are about to make some key decisions about the role of private financing and practice in the health care system; the Cambie case in British Columbia is just the latest attempt to overturn fundamental components of publicly funded medicare. 

Closing arguments were made last week and the decision in this legal case, which is expected to be appealed to the Supreme Court, will have ramifications for decades and for millions of people.

So, what can international experience teach us? One particularly illuminating case is Ireland.

It is striking that as Canada seems on the cusp of embracing two-tier health care, Ireland is struggling to limit it.

Dr. Brian Day launched a case against the British Columbia government based on a constitutional challenge saying patients have a right to pay for private care if the public system leaves them waiting too long. He says the trial is about patients’ access to affordable treatment, while his opponents accuse him of trying to gut Canada’s medical system. (Darryl Dyck/The Canadian Press)

In 1957, the Irish Republic decided to set up a voluntary health insurer owned by the state to take the pressure off the public system, allowing health care to be bought by those who had the means.

It sounded reasonable, and 60 years later, private health insurance has taken off with almost half the population covered and plans offered by private companies. This allows faster access to public care subsidized by the state, and queue-jumping of the very long waiting lists by those who are better off financially.

Despite only accounting for 12 per cent of total health funds, however, private insurance in Ireland now drives access to hospital care – the tail that wags the dog.

Private health insurance occupies a unique role in the Irish setting, providing faster access to care in both public- and private-provider settings.

However, it does not always cover hospital expenses and often covers a fraction or nothing at all for non-hospital care, such as outpatient appointments with a specialist, GP visits, and care from allied health professionals. It also does not cover drug costs (there is a government reimbursement threshold for households spending more than a fixed amount in a month).

Moreover, the benefits of queue jumping only accrue to those who are able to afford private health insurance premiums — and there are concerns about that affordability.

The cost of insurance varies hugely by product and there are more than 300 hospital plans, but for an adult with public and private hospital coverage, the cheapest is around $1,900 per year.

A recent study showed that roughly 19 per cent of households experience unaffordable private health expenditures, which includes both private health insurance and co-payments. The latest household survey suggests that people are going without some GP services and dental care in order to afford health insurance plans.

Ireland’s latest household survey suggests that some people are going without GP services and dental care in order to be able to afford health insurance plans. (Shutterstock)

Ireland has historically been way off the pace when it comes to delivering universal health care. It is an outlier in Europe, with one of the highest proportions of national income spent on voluntary health insurers — 13 per cent in 2017, compared to an EU average of 2 per cent.

The result is two-tier access to acute care, and only very average results in terms of health outcomes. (The other two countries with large voluntary health insurance sectors are France and Slovenia, but their insurers cover co-payments and they do not allow faster access).

Rather than helping the public sector out, private insurance may have contributed to its problems in Ireland. It erodes solidarity, giving the well-off a way out of engaging with the public sector, and potentially aggravating under-funding by making the better-off less willing to be taxed more for health.

It also means that dual-practice providers – those who work in both the public and private sectors — have an incentive to keep their public waiting lists long to boost their private practices.

Private insurance also costs every taxpayer regardless of their insurance status, because the government subsidizes those who take out private insurance by offering tax breaks.

The core aim of Ireland’s Sláintecare is to remove private insurance funding from public hospitals and establish a universal, single-tier health service. (Shutterstock)

As a potential way out of this two-tier system, the Fine Gael Labour government of 2011 proposed Irish private insurers become the basis of a universal health insurance system, modelled on the Dutch managed competition system. However, this policy cul-de-sac proved too expensive and too complex, and it has now been abandoned for a more typical re-energizing of the public system in the guise of the “Sláintecare” policy.

The core aims of Sláintecare are to establish a universal, single-tier health service where patients are treated solely on the basis of health need and funded through general taxation. This means a removal of private insurance funding from public hospitals over a period of six years, with waiting-time guarantees backed up by increased accountability and information.

In other words, a return to publicly funded health care.

Nevertheless, the disentangling of the public and private systems is complicated; it will take careful planning, coalition-building, and changing the public narrative about the nature of the health system.

The introduction of private health insurance in Ireland allowed a two-tier system to develop with long waiting lists in the public system and limited financial protection for households. It has impeded a fair, efficient and integrated system, and there has been profiteering by some insurers since the liberalization.

It has taken decades to develop a plan that will disentangle public and private health care financing in Ireland. Implementation will take another 10 years at least.

While Canada might be considering an expanded role for private health services and insurance, such a decision needs to be taken with sober judgment. It cannot be easily unwound.

  • This column is part of CBC’s Opinion section. For more information about this section, please read our FAQ.

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