1. Universal Health Insurance
Dublin Oliver O’Connor
October 2012
ooc@sky.com

2. What does UHI mean?
Easy answer:
• Universal = Same benefits for EVERYONE, no faster access for ANYONE
• Universal = Compulsory source of funding
Where we are now:
• Universal public hospital care legally established
– Secondary care, tertiary care
• Private hospitals and private beds in public hospitals available to insured
• GP/primary care:
– No single legal framework
– Means tested medical card for 36-38% population
– For others: available GP and primary care: but out of pocket cost affordable?
• Long term care: one framework with graduated ‘co-pay’
• Compulsory taxation revenue base – progressive, effective
ooc@sky.com

3. Programme for Government – UHI
• UHI will deliver “equal access to care for all”
• There will be no discrimination between patients on the
grounds of income or insurance status. The two-tier system
of unequal access to hospital care will end.
• A system of Universal Health Insurance (UHI) will be
introduced by 2016, with the legislative and organisational
groundwork for the system complete within this
Government’s term of office.
• UHI will provide guaranteed access to care for all in public
and private hospitals on the same basis as the privately-
insured have now.
• Everyone will have a choice between competing insurers.
• …system will not be subject to European or national
competition law.
ooc@sky.com

4. Programme for Government – UHI
• Insurance with a public or private insurer will be
compulsory with insurance payments related to ability
to pay.
• Exchequer funding for hospital care will go into a
Hospital Insurance Fund which will subsidise or pay
insurance premia for those who qualify for subsidy.
• The Hospital Insurance Fund will also control those
health care costs for which central control is most
effective.
• A White Paper on Financing UHI will be published early
in the Government’s first term.
ooc@sky.com

5. Programme for Government –
Primary Care
• Free GP care then free primary care
– “Universal Primary Care will remove fees for GP care
and will be introduced within this Government’s term
of office” (March 2016)
– “Universal Primary Care will be introduced in phases so
that additional doctors, nurses and other primary care
professionals can be recruited.”
– “Access to care without fees will be extended to all in
the final phase” [not specified when]
• [Costings to be specified and part funded from efficiency
savings]
ooc@sky.com

6. Health Basics – providing and paying
• Simplified diagram
Services
Individuals Intermediaries Providers
Resources
ooc@sky.com

7. Slightly less basic – current system
General taxation Govt Annual budget HSESalaries, grants
Govt usage charges
Tax relief
Fees, charges
Insurance policy premia
Insurers
Direct out of pocket fees
ooc@sky.com

8. Current system - € flows approx
€13.3bn €13.6bn €13.6bn
General taxation Govt Annual budget HSESalaries, grants
€300m
Govt usage charges €300m
Tax relief
€1.7bn €1.8bn
Fees, charges
Insurance policy premia
Insurers
€1.7bn?
Direct out of pocket fees, payments
€17bn health economy = 10.6% GDP, 13% GNP
ooc@sky.com

9. Is this the new world?
General taxation Govt Salaries, cap
ital grants
Health Insurance Fund
Compulsory premia Fees, charges
State VHI;
Top-up premia Private
Insurers
Direct out of pocket fees??
ooc@sky.com

10. Complex issues for all stakeholders
• For the Exchequer: Funding
• For Patients / the public: Benefits and Payment
• For Insurers: role and commercial freedom
• For Providers: payments, commercial freedoms
• For Doctors, staff: remuneration, management
• For Dept of Health: integrated
care, performance, outcomes
• For State and citizen: health law and equity
ooc@sky.com

11. Exchequer
• Funding
– What will it cost? Free GP care – free primary care – UHI
– How much in direct taxation? How much in compulsory premium?
– Capital funding
• Cap and control
– Need to ensure annual budget cap still robust
– Need assurance that system does not include cost escalation dynamic
– Finance to control insurance premium level and means test levels
– Failure regime for insurers/hospitals
• Collection
– Through PAYE? Non-PAYE sector?
• Economic
– Is premium effectively extra PRSI? Scope? Headroom for other taxes?
No Govt decision will be made until these all addressed in advance
ooc@sky.com

12. Patients – the public
• What benefits do I get?
– Every hospital, every procedure covered?
• Premium level and means test
– How much to I pay?
– Do I pay more than now, less or the same?
– How is the means test implemented?
– Enforcement – what if I don’t pay?
• Choice and control
– Can I buy additional/top-up insurance?
– Can I have choice of consultant/choice of hospital?
All need policy, law, administrative systems, communication, implementation
ooc@sky.com

13. Insurers
• Funding
– Freedom to set rates? Not really
– How will they get enough funding to pay the benefits?
– Claims control function?
– What reserves level needed? 40% or 9%?
• Commercial
– Compete on what … quality administration?
– Allowed offer additional benefits?
– Freedom to select providers?
– Scope for profit making
• Risk equalisation
– System needs to be comprehensive but not stifling
– Balance of customers and claims – 80% claims at VHI
Major strategic issues for insurers who need clarity and advance notice
ooc@sky.com

14. Providers - hospitals
• Payment mechanisms
– ‘Money Follows the Patient’ to be in place first
– Price/tariff system needed, requiring data
– Complex and still far away
• Governance
– Public hospitals to become independent trusts before UHI
– Complex and still far away
• Competitive forces
– Do they compete for patients?
– What drives efficiency?
– What happens to underperforming hospitals?
– Hidden or open subsidies from State for good/bad reasons?
– Any scope for income-generation beyond State package?
– Profit making allowed/accommodated?
Both public and private hospitals have major strategic issues
ooc@sky.com

15. Doctors and staff
• GPs
– GPs to give up private fee earning and replace with capitation/salary/fee
– IR negotiation of new contract – still far off
– Will they take less money than currently earned? €300m?
– Replacing private fee payment with Exchequer fees is an increase in
public spending
• Consultants
– How will they be paid? All salary? All fee?
– Will no longer earn salaries + substantial fee income (c.€1bn total cost)
– New contract needed - complex and still far away
– Employment, by whom? Independent contractors?
• Other clinical staff
– Recruitment to State salaries of all new health professionals? Headroom?
Major IR issues on both primary care and hospital care side
ooc@sky.com

16. Dept of Health – policy
• Performance and outcomes
– What health outcomes are specified for the new system?
– How is the performance of health providers to these outcomes to be
managed and delivered?
• Integrated Care
– How exactly is integrated care to be organised and managed?
– How are competing insurers to implement this?
• Regulation and governance
– New agencies (Patient Safety, Integrated Care, Insurance Fund)
– Future of HSE and all its non-hospital staff
– New system of hospital regulation (clinical, governance and financial
standards)
– Close insurance regulation needed in this system
– Competition regulation needed where any commercial activity takes place
Strong, but redesigned role still needed at centre for health policy determination
ooc@sky.com

17. State and Citizen
• Legal basis for health provision
– Potential fundamental change from Health Acts 1970-2005
– How close to private contract based law?
– Enforceability of personal right to healthcare any stronger?
• Equity
– How will this be defined?
– And implemented?
– Scope for any patient-doctor-provider-insurer relationship outside of State-
mandated system?
– Are there losers as well as winners: does the public understand the
consequences?
General approval for fair healthcare, but public not yet engaged on actual realities
ooc@sky.com

18. Implied Timing for Life of Government
• 2011:
– NTPF suspended and HSE board removed
– Universal Health Insurance Commission
– Special Delivery Unit up and running
– VHI EU Court decision
• 2012:
– Legislation on new HSE board published, not yet enacted
– Cost pressures - Significant savings – but little scope for new spending
– White Paper on UHI – delayed to 2013
• 2013:
– Risk equalisation in place – new legislation but may be amended
– VHI derogation ended and capitalised in State ownership: pressure
– HSE new legal status in place
– Money Follows the Patient system designed start implementation
ooc@sky.com

19. Implied Timing
• 2014
– Money Follows the Patient system across 52 hospitals
– Hospital Care Purchase Agency takes over hospital role of HSE
– New contracts for GPs and Consultants
• 2015
– Free GP care for all
– Integrated Care Agency set up
– Public Hospitals are all not-for-profit trusts in networks or standalone
– HIQA/Patient Safety Authority licensing of hospitals and regulation
– Health Insurance Fund established
– Full analysis of funding and Exchequer control completed and agreed
– Benefits package under UHI specified
– Costs and means test for individuals set out
– Scheme of legislation for UHI published
ooc@sky.com

20. Implied Timing
• 2016
– General election before March
– UHI enacted and implemented
ooc@sky.com

21. Conclusions
• Moving to UHI is immensely complex: will not happen for
2016
• Capacity to design and deliver policy, legal, technical changes
questionable: over-stretch
• Even with technical legal and policy work done, headroom
for new spending, new recruitment not available yet
• Equity of access issues may be addressed in advance of UHI
• For indicators, watch progress on necessary precursors:
– GP and consultant contracts
– Money Follows the Patient system
– Independent trust status for hospitals
ooc@sky.com