Steve Thomas is Assistant Professor and Sara Burke is a PhD scholar at Trinity College, Dublin, Ireland. Email: steve.thomas@tcd.ie
I 7
COPING WITH
AUSTERITY IN THE IRISH HEALTH SYSTEM
By: Steve Thomas and Sara Burke
Summary: The Irish economy contracted by 10.8% from 2008 to 2010 and the standardised unemployment rate increased dramatically from 4.8% in 2007 to 14.2% by January 2012. In response, austerity measures in the health sector aimed to contain costs and to target resources more effectively. Some of the policies also had the effect of shifting costs from the public purse to private households.
Recruitment and salaries of health sector workers also have been targeted. The current government's plan to establish a universal health insurance system is a new direction for Ireland and one that will have gained appeal through the current economic hardship and the instability in the private insurance market.
Keywords: Economic Crisis, Cost Saving, Health System Reform, Ireland While the Irish economy boomed in
the Celtic Tiger years, public spending on health quadrupled between 1998 and 2008, rising from €3.6 billion to just over €16 billion.llfl This was a very large increase but it needs to be viewed in the context of the prior decades of under-spending. In 2005, approximately 80% of overall health system financing in Ireland came from general taxes.El Taxation revenues fell substantially in 2008 and 2009 as a result of the economic crisisll and the economy contracted significantly (by 3% in 2008 and 7.25% in 2009).ll The Economic and Social Research Institute (ESRI) noted that the Irish economy contracted by 10.8% from 2008 to 2010 in what is one of the steepest falls in economic growth in an industrialised country since the 1930s.EI At the same time, the standardised
unemployment rate increased dramatically from 4.8% in the last quarter of 2007 to 14.2% by January 2012.ll
Given this dire economic context, from 2009 to 2011 the Irish government made a number of key decisions which had major implications for the health system.
In some cases it is difficult to ascribe direct causality to the economic crisis for these decisions; however, periods of crisis can be a good window of opportunity to push through reforms that have lain in wait. Below we summarise the range of policy responses, grouped into three broad areas, which aimed to contain health sector costs and target resources more effectively.
Some of the policies also had the effect of shifting costs from the public purse to private households.
Eurohealth incorporating Euro Observer -Vol.18 I No.1 I 2012
