Ireland: #5 in the 2020 World Index of Healthcare Innovation

Introduction

Ireland ranks fifth in the World Index of Healthcare Innovation with an overall score of 54.48, slightly below the fourth-ranked United States (overall score 54.96). Ireland’s somewhat private health insurance system gets high marks on Quality (#4, 67.07) and Fiscal Sustainability (#7, 68.39), fueled by the island’s robust economic growth.

While Ireland performed well across the board, its relative weak points were in Choice (#13, 41.77), thanks to its limited private insurance options; and Science & Technology (#13, 40.71).

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

Ireland stands out in the Index at #4 for 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. One place that could use additional investment: infrastructure (#26). The country’s hospital bed occupancy is under strain from overcrowding that could undo the quality gains achieved since the Great Recession.

Choice

Ireland’s #13 ranking on Choice is driven largely by affordable options for both public and private health insurance (#2). In contrast, Ireland’s public insurance system denies patient choice of specialists, leading to a #17 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. And while Ireland’s primary care and specialty doctors have largely transitioned to digital health records, hospitals have yet to adopt them in any meaningful way, resulting in a #22 ranking for health digitization.

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 6.8% of GDP to 4.5% over the last 10 years — a one-third reduction in spending.