Ireland: #2 in the 2022 World Index of Healthcare Innovation
With a robust economy and private insurance market, Ireland provides a fiscally sustainable health system committed to quality and choice
By Gregg Girvan and Avik Roy
Introduction
Ireland ranks 2nd in the 2022 World Index of Healthcare Innovation, up from 4th in 2021 and 5th in 2020. Ireland’s overall score of 60.04 was only bested by Switzerland (overall score: 66.56). Ireland’s semi-private health insurance system gets high marks on Quality (4th, 66.14), Choice (5th, 62.59), and Fiscal Sustainability (3rd, 69.23), fueled by the island’s robust economic growth.
While Ireland performed well across the board, it has room to improve in Science & Technology (11th, 42.22).
Background
Ireland established near-universal healthcare in 1953, when the government set up free hospital and specialist outpatient care for nearly 85 percent of the population. A private nonprofit, the Voluntary Health Insurance Board (VHIB), became the de facto monopoly insurer. That monopoly ended in 1994, after the European Union forced Ireland to liberalize its insurance market.
Today, the Irish Health Service Executive (HSE) supports a single-payer health care system, free at the point of service, for low-income Irish residents whose incomes are below €10,000 or so for those under 70 years of age, and below €28,600 for individuals over 70.
The 68 percent of Irish residents whose incomes are above these thresholds must buy a private “medical card” for major hospital and medical services. Hence, 47 percent of the Irish population has private health insurance, with VHIB taking 48.5 percent market share, and two other private insurers — Laya and IrishLife Health — taking nearly all of the rest. Competition among private insurers is relatively low, but it has increased in recent years.
Drug prices are regulated in Ireland, by benchmarking prices to those of the United Kingdom, Denmark, France, Germany, and the Netherlands. However, due to Ireland’s highly favorable corporate tax code, in which innovative companies pay a corporate income tax rate of 6.25 percent on intellectual property, many U.S. pharmaceutical companies — including Johnson & Johnson, Pfizer, Merck, Amgen, AbbVie, Gilead, and Bristol-Myers Squibb — have significant operations in Ireland.
Quality
Ireland stands out on Quality (4th). 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 4th 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 5th ranking on Choice is driven mainly by the affordability of health coverage (2nd) and access to new treatments (5th). In contrast, 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. These limitations on choice contributed to ranking 11th on the freedom to choose healthcare services.
Science & Technology
At 11th, Ireland’s performance in Science & Technology is good. On the one hand, its research is often cited favorably in comparison to similar countries, and its medical research and development funding is higher than most neighboring European countries possess. On the other hand, Ireland also ranks 26th for health digitization. Combined with a relatively low rate of information and communications technology adoption among the populace, Ireland’s hospitals have yet to adopt digital health records in any meaningful way—though primary care and specialty doctors have largely digitized.
Fiscal Sustainability
Ireland ranks 3rd on Fiscal Sustainability. Ireland’s fiscal balance sheet has dramatically improved since the Great Recession. The country’s 2020 debt-to-GDP ratio was a respectable 59 percent, and Ireland benefits from a large, youthful workforce to support an aging population. Through a combination of austerity measures and demand for private insurance, Ireland leads all countries in the Index on limiting the growth in public health spending, reducing it from 6.8 percent of GDP to 4.7 percent over the last 10 years — a reduction of 31 percent.
