Impact of Great Recession on Population Health and Healthcare in Ireland
The great recession is considered the sharpest decline in economic activity in the late 2000s. The economy of Ireland entered an unadorned recession in 2008. After that, the economy faced an economic depression in 2009. It was stated in 2007, that it was one of the most adverse economic downturns since the 1930s (Christiano et al., 2015). According to the financial crisis inquiry commission report of 2011, the great recession was preventable. The economic downturn was dramatic and the country’s GDP was falling each year, record fall of 10 per cent in the overall economy. The great recession is unique due to its universal impact and multifaceted interactions with social and financial systems. It directly impacted the lives of the people by reducing household incomes and increasing the unemployment rate worldwide. Ireland’s government also accepted a rescue package from the EU, IMF and European central bank, which also put large pressure on the economy of Ireland (Christiano et al., 2015). Effects of recession have hit every sector of the economy (Torf et al., 2021). It has increased the stress level in individuals resulting in poor health. This ultimately leads to changes in the structure of the household and decline can be observed in the educational attainment and academic achievement of children. It also increases the unemployment rate with lower incomes and wages. In Europe, crises worsened by the pressures of budgetary and strictness programmes that directly affected the public’s spending power on health care and social welfare. Public expenditure on health decreased by almost 9% and this was the peak that was observed in the year 2008. That requires numerous efficiencies, which is to be achieved by lowering cost units, mainly in human resources and pharmaceuticals, increasing productivity (Torf et al., 2021). It also lays down the hospital payment system where patients are followed by money and reallocation of services across all levels of care. On a large scale, economic crises highlighted that health systems need reform, which is better demonstrated than by the government assurance for expanding the population radically by coverage and introduction of globally health insurance, and by 2015, free primary care services for all. This essay will shed light on effects of economic crises on population health and health care. Also, Ireland IMF loan agreement is also discussed for recovering from crises, and health policy responses of the government. Also, alternatives policies for overcoming crises will be discussed.
The international monetary fund approved €22.5 billion in loans for Ireland, and this rescue package was given to restore the health sector to the country’s overall economy (Torf et al., 2021). The fiscal package for reducing public debt and deficit was €85 billion. The European Union plays a big role in approving loans from the IMF, and the European central bank is an important component of this program. The main goal behind providing a financial package for Ireland was to improve the country’s financial stability and confidence after facing a great recession (Mazeikaite et al., 2019). The government of Ireland is the first country in Europe to implement fiscal policy in the wake of the international economic crisis. The Irish government’s national recovery plan aims at saving €15 billion. This amount was 9 % of the GDP throughout 2011-14, €6 billion in 2011 alone (Stadhouders et al., 2016). By reducing public expenditure, two-thirds of the savings will be achieved. Public sector sizes are reduced, and social welfare benefits will be cut. This is designed for protecting the most susceptible groups in society. For increasing revenue, the tax base is expanded, and tax rates are increased (Mazeikaite et al., 2019). This makes income tax more advanced, and tax reforms will increase the number of taxpayers. On 1957, 8 august Ireland joined the World Bank, and they continued to be a member. Since that time, the World Bank loaded most of the money for Ireland to put towards projects, infrastructure, education and power. And Ireland easily pays all these loans without any issue. In 2007, Ireland was hit by the global financial crisis, and this recession was more severe than the great depression of the 1930s (Mazeikaite et al., 2019).
IMF Loan Agreement and Health Policy Responses
Ireland has a small open economy, and due to crises, Ireland is particularly affected and exposed by economic crises. Inadequate government and cheap credit error in the financial sector led to the expansion of unsustainable property (Keegan et al., 2013). The global economic crisis hit in 2008, which contributed to the breakdown of internal banking and the breakdown of the construction sector. In this response debt of the private bank is converted into sovereign debt, which comes under the bank guarantee scheme that was introduced in 2008 September. Unemployment increased in the country at the time of crises. In 2007, it was 5%, and at the end of 2012, it was 14%. The risk of poverty has arisen, and inflammation in health prices is constantly increasing of its overall prices, giving a weighty reliance on OOP payments in the Ireland health system. This system increases the household burden. In 2008, public health expenditure faced substantial cuts, with a budget of around €15.4 billion, and in 2013, it was just € 13.3 in 2013 (Keegan et al., 2013). These health expenditure reductions are achieved by cutting staff pay and staff members. Public health expenditure occurs against the framework of commitments of existing political powers that have to improve the community and primary care and improve the quality of public hospital care. Higher increasing prices are the continuous source of economic and financial pressures in the Irish health system (Powell-Jackson & Hanson, 2012). During 2005 to 2011, Ireland’s health care costs increased by more than 20%, although the total price increased by almost 10% approximately (Schneider & Devitt, 2018). Health inflation occurs due to increases in hospital charges, dental fees, outpatient fees, and doctor’s fees. That imposes a large burden on the lower-income population. In 2011, PHI premium also increased by 22% and 16 % in 2012 (Héroux et al., 2015). This increase is due to the government’s recent moves for public hospitals to ensure the whole economic cost of private activities. In Ireland, health is approx. 14% on prescription pharmaceuticals (Schneider & Devitt, 2018). After 2000, public expenditure on pharma very rapidly increased. Some other drivers that increase the expenditure of the public are unmet needs (Including some identified in Ireland are, including mental health services, chronic diseases, and children services), expectations are raised (this increases the demand for the unmet need to be met) and change in technologies (technological change is still under debate that is technologies is a cost driver for health).
Due to financial pressure, the Irish health care system is testing a medical card scheme made available as free public health to the low-income people in the area (Schneider & Devitt, 2018). With the people’s income decreasing and the rising unemployment rate, the total population of medical card owners is over 40%, up from approx. 30% in 2008 (Backhaus et al., 2022). Despite declining staff members and budgets, the public health system in Irish is still giving more care in many areas like the ageing population having chronic disease burden (for example, outpatient and inpatient is increased throughout the year since the crises began). Many weaknesses in financial and delivery structures problems are before crises, and they are still arising (Backhaus et al., 2022). Implications on health system performance and health are rates of deprivation and poverty have increased since the beginning of the crisis in Ireland. Poverty and illness are directly interrelated, and they will impact the population’s overall health. Crises directly affect the income of individuals (Héroux et al., 2015). This will increase poverty and leads to poorer health. Cork’s study stated that a relation between the impact of economic crises and suicide also helps analyse the impact of economic crises on mental and physical health and people’s health behaviour (Lau et al., 2021). Access to services, there is much evidence that shows the inequalities in health care and health since the crises, when Ireland entered in Troika bailout with regular IMF and European commission reporting, cost-saving and efficiency (Lau et al., 2021).
Alternative Policies for Overcoming Crises
Successive budgets were introduced in October 2008, and public expenditure was a response to the crises, including health. Stricker supervision and parameters are placed on health expenditure in the troika bailout course (Loughnane et al., 2019). Between 2008 and 2012, public health expenditure has fallen by approximately 9% in nominal values. And additional adjustments were needed in 2013-2014. It is observed that the public health system has required some significant adjustments and financial pressures face it in real-time (Loughnane et al., 2019). These conditions in the public health system have arisen due to demographic changes and the strong policies implemented in the system. Public and statuary lead to total proportion of health expenditure in Ireland is reduced regularly from a high to low which was 77% in 2004 and 67% in 2011, constantly increasing towards OOP individual expenditure (Loughnane et al., 2019). The data suggest a reduction in Ireland’s total health expenditure funding. It has fallen below the average for OECD countries, negatively affecting the tax-based health financial system. Health expenditure is continuously increasing, but it is continuously declining in households purchasing PHI. After 2000, the revenues of the government increased on indirect taxation (Loughnane et al., 2019). By 2011, a big portion of government revenue from indirect taxes decreased because the government had stabilized its finances. During former crises, public health funding was progressive. And many changes were made to the policy of direct taxation is the main source of progressiveness. Taxes on tobacco and alcohol and sin taxes play an important role in public revenue in Ireland. Group on obesity is a special action formed in 2011, and in 2013, the public health institute in Ireland issued their tax on sugar-sweetened drinks by health impact assessment proposed tax (Loughnane et al., 2019).
Changes that are covered at the time of crises are: – changes in purchasing, service planning and delivery. These can be achieved by improving productivity, shifting to more cost-effective activities at every level of care, and decreasing unit costs on health systems like pharmaceuticals and human resources (Mercille, 2019). In this way, system efficiency will be improved. Health care workers and policies of human resource payments play a key mechanism in cost-cutting. Reforming pharmaceutical sectors is the priority for giving a boost to the pharmacy services. Delivering a clinical care programme helps in improving the quality of care, and it also provides planned patient care. Hospital services by improving the payment of the hospitals at the time of crisis. And delivering integrated care services to everyone at the time of crisis (Mercille, 2019).
Economic and financial crises have suffered the Irish economy. The main domestic causes are the fragility in the banking sector, imbalanced taxation portfolio, pro-cyclical expenditure of government, and lax government regulation and oversight. In this response, 9% of public expenditure are fallen. In comparison with other sectors, public health expenditure is relatively protected in times of recession (Mercille, 2019). This is because of demographic trends, cost pressure, and increasing chronic disease prevalence. Much significant efficiency are made for the public health care system by emphasizing increasing productivity, lowering cost units, and reallocating services across care levels. While probable effectiveness is easy to cuts made, political obstacles for future cuts are real around pharmaceuticals and human resources (Mercille, 2019). The concern is related to affordability of accessing services while lowering healthcare expenditure by government and co-payments increases in insurance premium and variety of services. Subsequently, this increases the burden on households to pay for health care when their income has fallen. The people aged over 70 and poor, the medical card scheme helped all people while functioning well in crises. For overcoming recession, a proper planning is required, Ireland government has taken major steps to overcome from all those situations. They adjust and recover all lost economy and GDP starts moving towards new peak level.
References
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