Publication of Report of Expert Group on Resource Allocation in the Health Sector

9 July 2010

Publication of Report of Expert Group on Resource Allocation and Financing in the Health Sector

"Providing a System in Which Money Follows the Patient's Best Health Care” Professor Frances Ruane, Chairperson of the Expert Group on Resource Allocation and Financing in the Health Sector, today published and presented the Report of the Group to Minister for Health and Children, Mary Harney, T.D. The independent Expert Group was established by Minister Harney in April 2009. Its members included economists, hospital and primary care doctors, public and private sector CEOs and health management specialists. The Group believes in evidence-based policy and worked with researchers from the ESRI to collect and analyse a wealth of data on the current structure and functioning of Irish health care and international best practice. This evidence is presented in a separate publication entitled: Resource Allocation, Financing and Sustainability in Health Care.  The Group's task was to report on how current levels of resourcing in health could be better allocated to deliver the objectives of health policy. These include:

• More effective prevention of illness and early intervention
• An emphasis on care in the community rather than in hospital
• The integration of care across different parts of the health sector
• Equity in access to care
• Transparent and fairer distribution of resources across the country
• Cost effectiveness and efficiency in the delivery of care

The Group found evidence that some current methods of resource allocation undermine these policy objectives; for example:

• Disease prevention is often cheaper than cure but there is no incentive for this in the current health system.
• Stated HSE policy promotes the transfer of care from expensive hospitals to primary and community settings yet incentives for hospital doctors, GPs and patients often lean towards institutional rather than community care.
• Cost effective management of chronic disease requires integrated care across the whole health sector but there is no governance or funding mechanisms to meet this demand.
• The high levels of "pay-as-you-go" financing ignore ability to pay and give those who can afford it faster access to care.
• Safe and cost effective hospital care is a key policy objective but the current resource allocation systems reward neither.

What is required, in the Group's view, is a structure of resource allocation which explicitly and transparently supports stated policy objectives. This structure should promote individualised care solutions by encouraging appropriate behaviours and making resources follow the user/patient rather than paying for services irrespective of their quality and effectiveness. Specifically, the Group makes 34 recommendations for change and provides an implementation schedule. These recommendations include:

• By end 2011, the DoHC and HSE should establish a common framework for health and social care expenditure, based on the best available evidence, that sets out current and future health needs.
• The DoHC and HSE should agree priorities for a 5-year planning cycle to provide a stable foundation for development.
• The immediate development of a resource allocation model to underpin the 5-year plan that systematically distributes financial resources by predictors of health need such as age and social deprivation across the country.
• Purchaser and provider functions should be separated and reimbursement to providers of care should be based on national reference prices and be subject to the attainment of national quality standards.
• Public and private providers should be contracted in an identical fashion using prospective budgets. This will mainstream the NTPF whose functions should be integrated into the HSE.
• The immediate commencement of a project that would specify in detail a framework for graduated GP and drug payments which would take account of individual income and health-care need. This would replace the present unregulated approach. The following framework is proposed as an illustration of this:

• • • The Standard Card: capped GP and prescription drug fees for all who register with a GP
    • Standard Plus Card: reduced capped fees and cheaper prescription drug fees for those with chronic illness and incomes between 40-50% of the average
    • Enhanced Primary Card: further reductions in fees and the cost of prescription drugs for those with chronic illness and incomes between 30-40% of the average
    • Comprehensive Card: No fees or prescription costs for those with incomes under 30% of the average. This is identical to the current medical card.

Prof. Ruane commented: “We are very pleased to deliver this report to the Minister, as a contribution to the ongoing development of the Irish health system. Our aim in this Report is to assist in advancing our health system to a level where our limited resources are clearly targeted to achieve the best possible health for the population as a whole, and the best outcomes for all patients, irrespective of their means.”