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Dr Mark Murphy We need to rethink how we fund the health service

Dublin-based GP Mark Murphy illustrates where the failings are in how we fund our healthcare system.

EVERY SOCIETY IN the world faces the spectre of exponential rises in healthcare spending. This will be exacerbated by Covid-19, our ageing population and calls to fund expensive medications, healthcare technology and social care. 

Almost one in every five dollars spent in the US relates to healthcare. Using Gross Domestic Income (GNI), Ireland has been accused of having amongst the most expensive healthcare systems in the world, with poor outcomes.

At the same time, our life expectancy has now plateaued (see Point 1 in the figure below). In some countries, life expectancy has reversed. And that is before we consider the health- and social impacts of Covid-19. 

LE V expenditure essay figure copy

To understand how governments can meet the challenges of maintaining life expectancy and funding a modern healthcare system, we must recognise what underpins their trends.

Life expectancy

The paradox of plateauing life expectancy coupled with societies spending more than ever of their available resources on healthcare should prompt us to ask why rising healthcare spending is having little effect on our mortality.

It should also prompt governments to ask, what healthcare-expenditure-related outcomes we should consider as important. What exactly are we spending our money on, and how we can improve our population’s health? 

It is not uncommon to hear a Minister for Health state triumphantly that ‘government has never spent as much on healthcare before’, closely followed by ‘this is reflected in our rising life expectancy’.

However, both statements are largely independent of each other. We have come to assume that the increase in our life expectancy as a species has been caused by the health system itself, through advances in healthcare technologies, facilitated through rising healthcare expenditure.

Medicine has many fine achievements to its name from the discovery of germ theory (1849), to antibiotics (penicillin in 1942), to steroids (1948) and childhood vaccinations (e.g. measles vaccine discovery in 1963 and roll out in Ireland in 1984).

Yet the hubris of Medicine is in thinking that a number of smaller serendipitous discoveries over the latter half of the last century can compare with the development of clean water supply, warm housing, secure working conditions and reductions in income inequality.

The social determinants of our health, which have little to do with the Department of Health, largely influences our life expectancy. The recent ESRI Report Mortality in Ireland and Europe, 1956–2014 alludes to this fact, stating that higher incomes, educational improvements and higher female employment participation are related to our recent improvements in cardiovascular morbidity.

The healthcare system has a role, but a smaller one. Life expectancy, as an outcome, is not a marker of success for our healthcare system, but rather how all government departments are faring. 

Interestingly, austerity policies arising after the 2008 international economic collapse, are the most likely influencing factor with the drop in life expectancy experienced by some nations. It will be telling to see what the effect of policies, as a response to the Covid-19 pandemic, will have on life expectancy. 

Ireland is not a big healthcare spender

Nevertheless, patients require healthcare and will present to GPs and hospitals with a myriad of symptoms and concerns, which should be met with accessible, high-quality, compassionate care. In 2020 €18.3 billion was allocated to health, representing almost 23% of Irish government expenditure. We, like all countries, are struggling with healthcare inflation.

Yet a misperception is increasingly aired by commentators, inferring that our healthcare spend is the highest in the world. The insinuation is that we are not getting value from public expenditure, that we should not spend more public money and that private healthcare expenditure may be preferable to meet the demands of healthcare.

We absolutely need to demand better accountability in the organisation, governance and delivery of public healthcare, but this narrative is dangerous, will not match our country’s demand for healthcare and will ultimately cost us more.

There are four key factors we should consider when we look at healthcare expenditure in the figure above:

  • Historic underspend: Brian Turner, the UCC health economist, has argued that our healthcare system has been historically underfunded and we are living with the memory of this dis-investment. The under-funding and lack of capital investment in the 1980s and 1990s profoundly impacted the ability of our services to cope with the arrival of modern medicine after the millennium (see Point 2 in the above figure).

  • Austerity: Ireland was alone in the EU, in having successive retractions in public healthcare spending in 2012, 2013 and 2014 (see Point 3). This austerity was profoundly damaging to the development of public healthcare services, which we have not recovered from today. Ireland’s hospital bed capacity (total hospital beds per 1,000 inhabitants) was significantly reduced under Professor Brendan Drumm’s tenure as CEO of the HSE from 5.1/ 1,000 in 2008 to 2.8/ 1,000 in 2009. The Financial Emergency Measures in the Public Interest from 2009 to 2015 subsequently impacted the ability of the community sector to cope. It should be no surprise to realise why we are having difficulty in healthcare capacity now.

  • We are not the highest spenders: Whilst the average OECD expenditure on healthcare is $4,222 per capita when we look at similar countries, we find that Ireland’s expenditure is probably average (see Point 4). 

  • Breakdown of expenditure: Healthcare expenditure can be through; i) government/ compulsory insurance schemes; ii) private insurance schemes, and iii) out of pocket expenses. In the past ten years, Ireland has seen a massive expansion of private secondary care services (reflected in Point 5 in the attached figure), with an over-reliance on out-of-pocket charges for primary care. Light-regulation of private fee-per-item care usually does not address healthcare inequalities, can promote over-use and will ultimately be more expensive. Those who argue that Ireland has an excessive expenditure on healthcare, often underplay the relative role of the private sector in contributing to this cost and how the complex interplay between the public and private systems contributes to our current situation.


Faced with soaring healthcare costs and plateauing life expectancy, we need to ask how effective much of modern medicine is? 

The great paradox of modern healthcare is that at the same time that many patients cannot access healthcare, other people are receiving care that they do not need, which is both harmful and expensive.

Our failures to match healthcare demand with an evidence-based supply of care is driven by a failure of regulation from the Department of Health and other regulatory bodies. It relates to the medical advertising we hear on our radios, the fragmentation of services as a result of what insurance companies reimburse and the increasing corporatisation of the entire healthcare landscape.

The problem of over medicalisation must be addressed, as we tackle rising healthcare costs.

How to address healthcare challenges?

Our healthcare system is characterised by inequalities and challenges. Access to services is amongst the worst in the world. Our most vulnerable and elderly citizens are exposed to degrading and inhumane conditions, lying in public-view on trolleys on hospital corridors after admission.

Many patients wait for years to see a hospital consultant. Most of the population pay out-of-pocket costs for the dignity of just accessing healthcare. The impact of Covid-19 will worsen many of these challenges but these ‘problems’ are not intractable. 

The additional €4 billion provided for health in Budget 2021 is welcome and will support our acute hospital and critical care bed capacity.

But more money will be needed and we must be brave and counter the false assumptions that we spend too much on public healthcare. A national conversation is also needed on the over-reach of Medicine and how dis-regulated demand-led care can be expensive and harmful. 

We have to confront the truth about the social determinants of our health, especially the impact of our housing crisis on our nation’s health. Ensuring an equal social, cultural and economic recovery in the aftermath of Covid-19 is needed if we are to maintain our life expectancy.

We can be ambitious and address the challenges of access in our healthcare system, but we must ask hard questions about how we finance our complex public-private system.

Our values as a society must denounce the phenomena of our relatives waiting on trolleys when they are admitted in Emergency Departments and that most of the population have to pay the full cost of healthcare at the point of contact.

Sláintecare is the vehicle that can rebalance our overall expenditure towards public healthcare, with paralleled improvements in the governance and organisation of care. As a legacy to Covid-19, we need our government to fast-track its progress.

Mark Murphy PhD MICGP works as a GP in South Inner City Dublin. You can find him on Twitter @drmarkmurphy.

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