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Ireland
Anne Nolan and Steve Thomas
Economic trends
• Ireland's economy contracted in 2008 and 2009 and has not returned
to pre-crisis levels. In 2010, a government bailout of the banking sector
increased the budget deficit to over 30% of GDP.
• Concern over the health of the Irish economy also caused 10-year bond
rates and, therefore, the cost of borrowing to increase substantially by 2011.
• The unemployment rate has risen each year of the crisis and while it was
previously below the European average, by 2011 unemployment was in
the highest quintile.
• Government spending has decreased since 2009 as a share of GDP, as has
its health spending priority, both of which are near the European average.
• While public per capita spending on health had grown consistently prior
to the crisis, the level of public spending per capita decreased in 2009 and
2010; however, public expenditure continues to make up the majority of
total health spending. Per capita OOP expenditure decreased markedly by
14.4% in 2009. Non-OOP private expenditure per capita has continued
to grow every year since 2004 (Ireland: Figs 1 and 2).
Policy responses
Changes to public funding for the health system
• The health budget increased by 1% in 2009 but experienced a substantial
cut of €1.8 billion in the following three years.
• In 2012, there were budget efficiency savings in mental health, childcare
and disability services (€50 million). Additional money was allocated for
specific projects (mental health in 2011 and 2012 and primary care in
2012) but much of it was, in fact, used to provide normal services.
• The health levy, a surrogate income tax, was doubled to 4% on all
earnings up to €75 036 per year and raised to 5% on earnings over this
amount and the threshold for payment was reduced (2009); the health
levy was abolished and replaced by the Universal Social Charge (2011);
the lower exemption threshold for the Universal Social Charge was raised
from €4004 to €10 036 (2012).