Ireland: #2 in the 2024 World Index of Healthcare Innovation

Introduction

Ireland maintained its overall ranking of 2nd in the 2024 World Index of Healthcare Innovation, consistent with its ranking in 2022. With an overall score of 59.52, Ireland was surpassed only by Switzerland, which scored 66.19. Ireland’s semi-private health insurance system received strong evaluations, ranking 5th in Quality and 11th in Choice, and it led the rankings in Fiscal Sustainability, bolstered by the nation’s extraordinary economic growth.

Although Ireland demonstrated strong performance overall, it has potential for improvement in the Science & Technology category, where it is currently ranked 9th.

Background

Ireland’s healthcare system has its roots in 1953 when near-universal healthcare was established. Initially, the government provided free hospital and specialist outpatient care to approximately 85 percent of the population, with the Voluntary Health Insurance Board (VHIB) emerging as the de facto monopoly insurer. This monopoly persisted until 1994, when EU regulations necessitated the liberalization of Ireland’s insurance market.

Today, the Irish Health Service Executive (HSE) administers a single-payer system, offering services free at the point of care for low-income residents—those under 70 with incomes below €10,000, and seniors over 70 with incomes under €28,600. This accounts for roughly 32 percent of the population. The remaining 68 percent, whose incomes exceed these thresholds, must purchase a private “medical card” for major hospital and medical services.

Private health insurance is held by 47 percent of the population. The insurance market, though competitive, is dominated by three main providers: VHIB, which retains a 48.5 percent market share, Laya, and IrishLife Health, which together cover nearly all the remaining market. Recent years have seen a slight increase in competition among these insurers.

Price regulation for pharmaceuticals is a significant aspect of the system, with Ireland benchmarking its drug prices against those in the United Kingdom, Denmark, France, Germany, and the Netherlands. This strategy helps manage costs within the public healthcare framework.

Additionally, Ireland’s favorable corporate tax structure continues to attract pharmaceutical giants. Companies such as Johnson & Johnson, Pfizer, Merck, Amgen, AbbVie, Gilead, and Bristol-Myers Squibb benefit from a reduced corporate income tax rate of 6.25 percent on earnings from intellectual property, bolstering Ireland’s position as a critical hub for pharmaceutical innovation.

Ireland’s healthcare model is a dual system integrating public and private sectors. The public sector, managed by the HSE, is primarily funded through taxation and provides broad coverage, ensuring that basic healthcare services are available to all residents. In 2023, public healthcare spending reached approximately €22 billion, accounting for nearly 20 percent of total government expenditure.

In contrast, the private sector is driven by consumer premiums and provides supplementary coverage. It is especially popular for faster access to elective medical procedures and more comfortable hospital accommodations. As of last year, the total premium income for private health insurance climbed to €2.4 billion, reflecting a steady growth in enrollment and a diversification of insurance products offered.

Furthermore, the presence of major pharmaceutical companies has spurred significant employment and economic activity, with the sector providing over 30,000 jobs and contributing substantially to Ireland’s export earnings.

Dimension Performance

Quality

Ireland stands out on Quality (5th). Ireland takes the top spot in disease prevention, not only because it scores well by treating a variety of chronic diseases, but also because its robust economic growth improves health outcomes. In addition, Ireland ranks 1st in infrastructure, with high levels of physician and nurse staffing, as well as improved hospital occupancy rates post-pandemic. Other measures are mixed: while Ireland kept COVID-19 fatality rates low compared to neighboring countries, its lockdowns have only recently begun to relax, and they have been among the most stringent in the Index.

Choice

Ireland’s Choice ranking (11th) is driven mainly by the affordability of health coverage (7th) and freedom to choose healthcare services (9th). However, Ireland’s public insurance system denies patient choice of specialists while also shielding patients from exposure to out-of-pocket costs, limiting options for cost-conscious consumers. In addition, Ireland struggles with providing access to new treatments (29th), with low scores on both new drugs available and generic drug market share. 

Science & Technology

Ireland holds a commendable 9th place in Science and Technology. The country’s research is frequently cited favorably compared to its counterparts, and it allocates more funding to medical research and development than most neighboring European nations. However, Ireland finds itself at 22nd place in health digitization. Coupled with a relatively low adoption rate of information and communications technology among its citizens, Irish hospitals have not significantly implemented digital health records yet. In contrast, primary care and specialty doctors have largely transitioned to digital systems.

Fiscal Sustainability

Ireland tops the Fiscal Sustainability rankings. Since the Great Recession, Ireland’s fiscal health has seen substantial improvement. In 2022, the country’s debt-to-GDP ratio stood at a commendable 45.2 percent. Supported by a large, youthful workforce, Ireland is well-positioned to manage the financial demands of an aging population. The nation also has successfully led all countries in the Index in controlling the escalation of public health spending. Through effective austerity measures, corporate tax reform, and increased demand for private insurance, Ireland has managed to cut its public health expenditure from 6.8 percent of GDP to 3.5 percent over the past decade, achieving a near 50 percent reduction.