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Chapter 5
The impact of the crisis on the health
system and health in Ireland
Anne Nolan, Sarah Barry, Sara Burke and Stephen Thomas
Introduction
The collapse of Ireland's overexposed banking and construction sectors
at the onset of the global financial crisis precipitated a sovereign debt crisis
that required a Financial Support Programme from the Troika. In parallel to
sharply rising unemployment and declining household incomes, the terms
of the country's international loan agreement required deep cuts to public
sector spending, including the health sector, and incentivized reforms aimed at
achieving greater efficiency and cost savings.
Public expenditure on health has fallen by about 9% since its historical peak in
2008, requiring several efficiencies to be achieved through lowering unit costs,
particularly in pharmaceuticals and human resources, increasing productivity,
laying the ground for a hospital payment system where “money follows the
patient” and reallocating services across levels of care. To a large extent, the
economic crisis helped to highlight the need for health system reform, and
nowhere is this better exemplified than by the government's commitment
to radically expand population coverage through a staged introduction of
universal health insurance, starting with population-wide entitlement to free
primary care services by 2015. A primary challenge will be to implement the
major health financing reform associated with a new universal insurance system
within the context of continued budgetary constraints. In addition, while there
may be potential to develop longer-term real efficiency gains, most of the main
cost-cutting measures already have been employed and care must be taken
not to erode the health system's operational capacity, quality of services or
access to care.