The Independent View: Could Ireland’s emerging healthcare reforms test David Laws’ NHIS vision?

Nearly a decade ago now, David Laws MP raised the idea of evolving the NHS into a continental-style universal ‘National Health Insurance Scheme’ (NHIS), where healthcare would be progressively funded from dedicated income contributions, individuals could choose insurers and everyone would be entitled to a comprehensive package of set treatments within a decentralised but heavily regulated system. It was a bold and interesting proposal, which for better or worse helped define the 2004 Orange Book in eyes of many, though it has perhaps also been misunderstood and straw-manned to a degree.

However, besides substantive criticisms and the understandable sensitivities that talk of large-scale NHS reform tends to trigger, proposals like Laws’ also face a hurdle in terms of imagining how such huge changes could conceivably be brought about. In 2009 when the Social Market Foundation examined social insurance, they commented that “It would be very risky to embark on a massive structural reform in the UK without any international evidence about how best to proceed”.

This is where Ireland, the subject of a new report for the think-tank Civitas, comes in. Irish healthcare centres on the Health Service Executive (HSE), a centrally-administered national service financed primarily from general taxation and the country’s single largest employer. Based on this, many experts categorise Ireland and the UK as roughly comparable health systems. Ireland is of course also familiar to us culturally, population health is comparable and their service faces many of the issues Laws and others have raised about the NHS – rationing, underfunding, accountability, politicisation, outcomes that somewhat lag those of the continent and the arguable need for more patient choice. Recently, the Euro Health Consumer Index (EHCI) 2013 declared the UK and Ireland to be the 13th and 14th best health systems in Europe.

In response to these sorts of long-standing concerns, however, a left-right coalition government in Ireland has now launched a new reform initiative called Universal Health Insurance (UHI). This is essentially a plan to overhaul and decentralise the current Irish service and instead emulate the Dutch healthcare system, which is based on competition, choice and universal insurance. The Netherlands has also been ranked first by the EHCI and the health think-tank Commonwealth Fund for its ability to combine quality and equity. Further, just as the Laws proposal made clear that a mutualised NHS should remain as one of a number of insurers for individuals to choose between in his ideal NHIS system, both Irish coalition parties have stressed retaining a government-run public insurance option to act as check on competing private insurers.

Intended to be completed by the end of the decade, Ireland’s bold reforms could be a very valuable example for the UK. They could help settle the question of whether something like David Laws’ vision of a National Health Insurance system would be worth pursuing here, and tell us what the plausible roadmap to get there could be. Their experiment will be worth watching closely.

* Elliot Bidgood is research fellow in health reform for the think tank Civitas.

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19 Comments

  • All very good if you are an Orange Booker, or one of those with a mission to hive off the NHS to private providers under the excuse that the NHS cannot survive as it is.

    But what sorts of medical services would fall outside the definition of ‘a comprehensive package of set treatments’ ?
    And why the need for people to choose their own insurance provider…look how much time people have to spend trying to find an affordable energy deal. Why force people into that malkarky with something as improtant as health care ?

  • A lot of medical costs are no really insurance risks. If you want to have a dental check-up twice a year for example that is a certain cost not a risk that may or mat=y not generate an insurance claim. Do we need to discuss the concept of ‘insurance’ itself?

  • The NHS is remarkably cost effective and offers above average care for the money spent on it when compared to other systems.

    Obviously healthcare needs to be reformed to deal with new treatments, changing demographics and inefficiencies, but all of this can be done without changing the underlying principles of a national health care system free at the point of use.

    WHY ON EARTH WOULD YOU WANT TO REPLACE IT WITH AN INSURANCE BASED SYSTEM THAT, AT BEST, WOULD OFFER THE SAME STANDARD FOR THE SAME EXPENDITURE?

    Seriously, why?

  • Hi Elliot,

    Interesting article, thanks for posting it. I didn’t understand how these systems worked on the continent. I could easily see non-profit charitable organisations getting involved in a system like this, especially when it comes to non-emergency care or palliative care. The NHS needs reform but the debate is often to be polarised around ‘keep it exactly as it is’ groups on one side and ‘how can we save money at any cost’ on the other.

  • David Allen 17th Dec '13 - 5:23pm

    Ireland sounds like a good point of reference, and what I’m thinking about is that much maligned piece of Irish wisdom, to the effect that if you want to get to a certain place, it might be a bad idea to do it starting from where you happen to be standing at the moment.

    By all accounts, the Dutch and others have shown that you can make an insurance-based system work well, while the Americans (before Obama) have shown that you can make a complete pig’s ear of an insurance-based system. Therefore, the question is not whether it is a good idea in theory. The question is whether you, specifically, are going to make a good job of it. So the key question is, why do you want to get there from here?

    If you explain your motivation, then you will explain how you will go about it, and then we shall all get a better idea of what you are likely to achieve. Defenders of the NHS, such as g above, have long feared that Mr Laws wanted to ruin the universal provision of the NHS and replace it with something that would be more favourable to the rich who could pay. So they saw his elegant theoretical construct as a cunningly disguised wrecking ball. Since Mr Laws has since endorsed the use of an entirely different style of wrecking ball, one has to suspect that these suspicions were right.

    Now if the Irish are doing something on the basis of a left-right coalition, they seem likely to have rather better and purer motives, and they are therefore more likely to get to someplace it’s worth getting to. But, even if they do, it won’t prove that the gang of rascals now in charge on this side of the Irish Sea would achieve anything comparable!

  • Eliot, all that may be true, but why is it necessary to switch to an insurance based system? You didn’t say…

  • One of the curious things about those wishing to reform the NHS (and much else in the public realm besides) is that they are invariably quick to suggest all sorts of alternative structures, typically involving vastly greater private sector involvement in pursuit of ‘choice’ yet we hear little or nothing about what would be required to improve the NHS (or whatever) while keeping it public.

    In fact there are some very low hanging fruit that the government for one reason or another doesn’t want to pick. Top of the list is sorting out PFIs. Goodness knows how much money is flowing to financiers out of the NHS annually by now but it’s a BIG number. I believe that many/most of the NHS Trusts that are in financial difficulties are there because of PFIs. What can be done I don’t know but I’ll bet there is something. If all else fails, stopping new ones going ahead would be useful.

    As part of the package of reforms privatisers always promise strict regulation of key elements. That would be like financial regulation, the CQC etc. then I imagine. Offhand it’s difficult to think of an area where regulation is working any better than direct operations because, of course, the intractable problem government started with merely morphs into a new and equally intractable form with the added complication that a new factor (someone’s profit motive) has been added to the mix and, as often as not, the sector has been saddled with a daft structure to create a ‘market’. As if!

    Then there is the day to day management where some Trusts do it well but others clearly don’t. Not an easy one to fix which, channelling JFK, is exactly why it has been allowed to drift and why it should now be a top target to fix. One hint: it can only be done successfully as a bottom-up exercise. Westminster’s favourite top-down tactics of cash limits, targets, naming and shaming, appointing Czars etc. haven’t succeed yet so repeating them exactly matches Einstein’s definition of insanity.

  • First, and most obvious, things first. Campaigning for this is basically political suicide. If you say “insurance-based” the public will hear “US system” and react accordingly. You’re having to explain the differences between social health insurance and the US system even within this thread, and that’s not a luxury a politician has with the public.

    In terms of your arguments, as opposed to whether implementing them is a good idea: you state that the EHCI declared the UK/Irish systems to be the 13th/14th best yet they state: ‘Normally, the HCP takes care to state that the EHCI is limited to measuring the “consumer
    friendliness” of healthcare systems, i.e. does not claim to measure which European state has the
    best healthcare system across the board. ‘ It’s misleading to state any wider significance than the source itself claims, and I think that stating a need for wide-ranging reform of the NHS on this basis is not justified.

    It’s also my view that the EHCI is a pretty weak source to begin with. The tone is also unacademic and sometimes not neutral. See: ‘1.1.1.3 But Dutch healthcare is terribly expensive, is it not? ‘ or ‘The Netherlands example seems to be driving home the big, final nail in the coffin of Beveridge healthcare systems’. Exclamation marks abound. Not very professional.

    There’s also potential for a conflict of interest with the EHCI: it’s funded by Pfizer, a chain of private hospitals and a European Conservative and Reformist-linked think-tank.

    I realise that ranking healthcare systems is difficult (hence why the WHO stopped doing it) is difficult but there must be a more credible source available to make your points from. The Commonwealth Fund (which you also link to) would have been a far better source in my view, though it would have been harder to make your argument from their data from what I recall of what they’ve published.

    For the sake of brevity I’ll stop there. I don’t really think you’ve made a case for reform, let alone fundamental reform. We do agree that the Irish example will be interesting and that the Dutch healthcare system works well (though it did pre-2006 too!) but that’s not really the main point. Really I think GF has identified more concrete problems and provided more appropriate solutions.

  • The NHS doesn’t come higher because it’s systematically underfunded compared to our European neighbours’ systems. The idea that introducing competition (with it’s huge associated costs) would actually change this is silly – especially given that the NHS already comes top or near top on international comparisons of efficiency – if we want better healthcare we need to bite the bullet and raise taxes.

  • Or you could get rid of the purchaser-provider split, that’d save billions. Or perhaps allow collaborative purchasing & commissioning between trusts, which would save huge amounts when getting new equipment etc, and prevent duplication of services nearby and give more comprehensive cover. Buy out PFI schemes and that’s another massive saving.

    But no, it’s probably much simpler to restructure the entire system with minimal evidence or oversight or public mandate, while throwing money towards private forms who coincidentally gave fat donations to Lansley/Hunt.

  • Andrew Colman 18th Dec '13 - 2:46pm

    The most economical and efficient way of providing healthcare is though a simple Beveridge system. Ie One organisation paid for out of general taxation designed to provide universal care for all, just like what the NHS used to be and still is to some extent.

    This has been proved b y experience (the UK system costs half the US system for a similar overall level of service. Additionally overheads (costs of bureaucracy) was much lower in the early 1980s before the waves of privatisation since. (10% now compared to 3% 30 years ago)

    It is also logical. (a) A single organisation benefits from economies of scale. (b) Thee are no shareholders , advertisers or PR men to pay (c) One organisation can negotiate with drug suppliers, forcing down prices to a minimum level

  • In Slovakia the state health admin system is still one of the possible “insurers” for those who want it. The private providers are more efficient so use part of their profits to subsidise swimming pool entry etc. for their members. Difficult to make comparisons but from personal experience you can usually get straight in to see a specialist without an appointment and pre and post-natal care is light-years ahead (my brother’s wife was expecting back in England the same time as my wife in Slovakia). Others have said that cancer-treatment is behind that in Canada.

    A lot of the other arguments, such as not every treatment is covered, are problems whether you have the US, British or European systems.

  • Well no, you can never cover every possible treatment, the same as how you can’t have infinite ICU beds or an Angioplasty suite per head of population. See, there used to be this organisation called NICE who would look at clinical effectiveness of treatments and interventions via a panel of fully independent experts, then decide if their usage should be recommended. In many cases I believe they even reduced the costs of new drugs to the NHS through collective bargaining.

    Sadly however they don’t fit in with marketisation, so had to be neutered. Bet you guys were proud of that one.

  • Michael Parsons 19th Dec '13 - 7:23pm

    Simon
    Yes marketisation and private health insurance don’t work. To meet clais and make a profit insurance requires a pool of unclaimed contributions, and sooffers decreasing benefits for increasing need (such as age or pre-existing illness). Thye logic is that a single universal State scheme opertated nationally will makie the best (not the perfect) provision.. Purchasing and supplying health care tomake aprofit out of illness and misfortune is morally repugnant at best, and concern for social good rejects it out of hand.

  • No party in the UK has the political capital necessary to make any changes in this area so this is a bit of a hypothetical debate. A shame as lives could be saved.

    You can have privately administered health care alongside state administered health care as in Slovakia (the insurance is the same whatever, based on income as UK taxes are now and there is some adjustment procedure to deal with a situation where one insurer has more rich people or more old people). The state is automatically the insurance payer for people who are pensioners, unemployed, students, children. The choice of doctors is usually the same (there are rare cases where a doctor has not signed with a particular insurer).

    The only way in which a private company can make money in that environment is by providing slightly more (eg the swimming subsidy, some elective injections which would be charged to state-insured patients), and doing it more efficiently (i.e. using computers for actual administration instead of as machines for creating more professional-looking pieces of paper). It is not clear to me why it is immoral for a company to make a profit from making healthcare more efficient but moral for an unneeded administrative worker to draw a salary from the same pool of money.

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