Ireland: #4 in the 2021 World Index of Healthcare Innovation

Introduction

Ireland ranks fourth in the World Index of Healthcare Innovation with an overall score of 56.67, below third-ranked Germany (overall score 59.79). Ireland’s somewhat private health insurance system gets high marks on Quality (#7, 58.16) and Fiscal Sustainability (#4, 74.50), fueled by the island’s robust economic growth. In addition, Ireland ranks #8 on Choice (61.48).

While Ireland performed well across the board, it has room to improve in Science & Technology (#13, 32.52).

Background

Near-universal health care was established in Ireland in 1953, when the government set up free hospital and specialist outpatient care for nearly 85% of the population. A private nonprofit, the Voluntary Health Insurance Board, became the de facto monopoly insurer. That monopoly ended in 1994, after the European Union forced Ireland to liberalize its insurance market. Today, 51% of the Irish population has private health insurance, with VHIB taking 75 percent market share, and two other private insurers — QUINN-healthcare and Vivas — taking nearly all of the rest. Competition among private insurers is relatively low.

Drug prices are regulated in Ireland, by benchmarking Irish prices to those of the U.K., 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% 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

At #7, Ireland stands out on Quality. Ireland takes the top spot in measures of preventable disease, not only because it scores well treating a variety of chronic diseases, but also because its skyrocketing GDP growth is likely to fuel health and medical technology advancements for the foreseeable future. Other measures are mixed; while Ireland has kept COVID-19 fatality rates low compared to neighboring countries, its lockdowns have been among the most stringent in the Index, threatening economic recovery. Despite the strict protocols, the country’s hospital capacity, already under strain before the pandemic, was sorely tested at the beginning of 2021.

Choice

Ireland’s #8 ranking on Choice is driven largely by affordable options for both public and private health insurance (#4). 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 a #11 ranking on freedom to choose health care services.

Science & Technology

At #13, Ireland’s scoring on Science and Technology is mixed. Though its research is cited often in comparison to similar countries, it lacks the medical research and development funding that neighboring countries in Europe possess. Ireland also ranks #24 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 — notwithstanding primary care and specialty doctors have largely transitioned to them.

Fiscal Sustainability

Ireland ranks #7 overall on Fiscal Sustainability. Although the country ranks lower on national solvency (#20), its fiscal balance sheet has dramatically improved since the Great Recession. Through a combination of austerity measures and demand for private insurance, Ireland leads all countries in the Index on growth in public health spending, reducing it from 7.0% of GDP to 4.2% over the last 10 years — a reduction of 40%.