2009 Press Releases

Reducing health care expenditure or increasing the pain?
14.08.2009

Recommendations from the An Bord Snip report include reducing health expenditure in the form of increasing the drugs payment scheme (DPS) co-payment by 25% and the introduction of a €5 co-payment for general medical services (GMS) patients have come under strong criticism recently.

The introduction of co-payments or user charges in health care is not a new phenomenon. User charges and co-payments have been part of health care reforms world wide for the last decade. Such endeavours can serve two purposes, even simultaneously. One purpose is to reduce moral hazard amongst health care users, and the second is increase revenue. Using co-payments to increase revenue, provides an opportunity for the Government to increased funding levels available to the health care system without increasing taxes or reallocating resources. This is particularly suitable for a public health care system such as Irelands’.

The second rationale is that such co-payments may reduce the wasteful use of health care resources incurred by unnecessary prescriptions and/or over prescribing. This relates to the concept of moral hazard which can be used to explain a situation of excess use owing to changes in behaviour.

The DPS and GMS schemes provide lower cost and free prescriptions respectively to those who meet the eligibility criteria. Thus for GMS patients for example, who can visit the GP for free, they will get a prescription from the GP which the pharmacist will dispense. Fundamentally this appears a fair and equitable system, after all eligibility for the GMS system is means tested, and is designed to provide access to health care for persons who without undue hardship could not arrange general practitioner medical and surgical services for themselves and their dependents.

Read the full article at http://www.ucc.ie/en/economics

Picture shows Aileen Murphy, Economics Department, UCC

RMcD



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