Durkan (1999) contradicts the White Paper statement that " patients availing of
private hospital services have always been seen as availing of an alternative service to the
public system."(p.12). He says that the sentence is simply wrong. "Patients who opted for
private treatment in public hospitals were not availing of an alternative treatment service-
they were availing of the same treatment service, but getting it earlier, and having a variable
accommodation service. This was and is a major feature of Private Health Insurance- it
provides resources for queue-jumping." (p.4). One policy in Britain offers the patient the
option of either private care or a cash payment of £250 per night spent in a public hospital
with the choice being made at the time of hospitalisation (Norwich Union, 1999).
O'Rourke states that in Ireland "the vast majority of private medical insurance claims
are not for major amounts"(p.2) and that private medical insurance funds only 8.1% of
healthcare expenditure in Ireland.
Government policies to restrict competition in the market for health insurance in
Ireland seem therefore to lack an economic rationale. The protected sector provides some
benefits which are private goods such as perceived greater comfort and peace of mind and
one benefit, the ability to jump the queues, which might be claimed to be a social cost rather
than a social benefit. It is also of note that while the protected private health insurance market
covers some 42% of the population it contributes only 8.1 per cent of the costs of healthcare
in Ireland.
The White Paper relies, inter alia, on an OECD assessment of the Irish mixture of
public and private healthcare in 1997 to support its policy stance. The OECD acknowledged
Ireland's "unique mixture of public and private care" as "having achieved a good provision of
healthcare at relatively low cost to the taxpayer." (WP, 14).
The OECD noted that a significant private health sector had developed alongside the
public sector; that a significant number of people stay in the private system thus relieving the
cost of hospital care to the public finances; that working in public hospitals remains attractive
to consultants; and that older people remain in the system because health insurance premiums
do not vary with age." However the OECD also noted "problems in managing the
complicated interface between the public and private provision of medical care." The
problems cited include defining the expected commitment of consultants to both sectors;
putting charges for the use of public hospitals on a more economic basis and the need to
avoid high risk groups being pushed into the public sector. (WP, 14).
Three years later the OECD report appears complacent about the provision of
healthcare at a relatively low cost to the taxpayer. Public health spending has increased by 52
per cent, comprising almost 30 per cent in 1998 and 1999 (WP, 27) and 17 per cent in 2000