ADDRESSING MARKET SEGMENTATION AND INCENTIVES FOR RISK SELECTION: HOW WELL DOES RISK EQUALISATION IN THE IRISH PRIVATE HEALTH INSURANCE MARKET WORK? ESRI Research Bulletin 2017/05

Community rating restricts health insurers from varying premiums based on insurees’ risk profiles. It is a key feature of many health insurance markets. While designed to promote equity, this regulation incentivises insurers to focus on attracting low-risk (profitable) consumers while avoiding high-risk (unprofitable) consumers. This phenomenon is known as “risk selection”. Risk selection has a number of negative consequences, such as market segmentation and poor quality service to high-risk individuals (e.g. the old and sick). It also causes inefficiency where investment focusses on attracting low-risk individuals (e.g. the young and healthy) rather than improving price and quality. The best strategy for reducing risk selection incentives is good risk equalisation. Commonly, this involves providing risk-adjusted premium subsidies to insurers based on insurees’ risk profiles. These subsidies are generally administered through a risk equalisation scheme. Our study investigated the performance of Ireland’s scheme. Despite the liberalisation of the Irish health insurance market in the mid-1990s, bona-fide risk equalisation payments only commenced in 2013. The current risk equalisation system allocates risk-adjusted subsidies to insurers based on the age, sex, level of cover, and hospital utilisation, of insurees

Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys. ESRI Research Bulletin 2018/7

An insight into the competitive nature of health insurance markets can be gained from understanding what influences a consumer’s decision to switch from one health insurer to another. A health insurance consumer’s decision to switch insurer will be influenced by the relative benefits and costs to switching. Benefits to switching mainly relate to cost-savings and better quality of insurance plans. Costs to switching come in many forms and can include the time and effort involved in switching insurer (transaction costs) and the time spent identifying and interpreting alternative insurer plans (search costs). Health insurance consumers may also be subject to behavioural biases such as loyalty to their insurer or a preference for the status-quo (known as ‘psychological costs’) which may impede switching. High switching costs can weaken market competitiveness and inequalities can arise if certain groups of consumers are more likely to experience these costs. This analysis examines consumer-reported benefits and costs to switching health insurer in the Irish private health insurance market

Addressing market segmentation and incentives for risk selection: how well does risk equalisation in the Irish private health insurance market work?

This study assesses the efficacy of Ireland’s recently introduced risk equalisation scheme in its voluntary health insurance market. Robust risk equalisation is especially important in an Irish context given acute risk segmentation and incentives for risk selection that have evolved within the market. Using uniquely acquired VHI data (N=1,235,922) this analysis assesses the predictive efficacy of both current and alternative risk equalisation specifications. Results suggest that the low predictive power of the current risk equalisation design (R2 = 6.8 per cent) is not appropriately correcting for anti-competitive incentives and asymmetries in the market. Improvements to the current design could be achieved through the introduction of diagnosis-based risk adjusters

Spatial Variation in General Medical Services Income in Dublin General Practitioners

The general medical services (GMS) scheme provides care free at the point of use for the 30% most economically deprived section of the population and the elderly. Almost all people of over-70-year olds are eligible for the GMS scheme potentially directing resources away from those most in need. The aim of this study is to analyse the relationship between practice GMS income and deprivation amongst Dublin-based general practitioners (GPs). The practice GMS income in Dublin was analysed in relation to practice characteristics including the number of GPs, catchment area population, proportion of over-70-year olds in the catchment area, catchment deprivation, number of GMS GPs within 2 km, and average GMS practice income within 2 km. Practice GMS income was highest in deprived areas but is also a valuable source of income in the least deprived areas. The capitation rate for over-70-year olds provides an incentive for GPs to locate in affluent areas and potentially directs resources away from those in greater need

Prescriber variation in potentially inappropriate prescribing in older populations in Ireland.

BACKGROUND: Health care policy-makers look for prescribing indicators at the population level to evaluate the performance of prescribers, improve quality and control drug costs. The aim of this research was to; (i) estimate the level of variation in potentially inappropriate prescribing (PIP) across prescribers in the national Irish older population using the STOPP criteria; (ii) estimate how reliably the criteria could distinguish between prescribers in terms of their proportion of PIP and; (iii) examine how PIP varies between prescribers and by patient and prescriber characteristics in a multilevel regression model. METHODS: 1,938 general practitioners (GPs) with 338,375 registered patients\u27 ≥70 years were extracted from the Health Service Executive Primary Care Reimbursement Service (HSE-PCRS) pharmacy claims database. HSE-PCRS prescriptions are WHO ATC coded. Demographic data for claimants\u27 and prescribers\u27 are available. Thirty STOPP indicators were applied to prescription claims in 2007. Multilevel logistic regression examined how PIP varied between prescribers and by individual patient and prescriber level variables. RESULTS: The unadjusted variation in PIP between prescribers was considerable (median 35%, IQR 30-40%). The STOPP criteria were reliable measures of PIP (average \u3e0.8 reliability). The multilevel regression models found that only the patient level variable, number of different repeat drug classes was strongly associated with PIP (\u3e2 drugs v none; adjusted OR, 4.0; 95% CI 3.7, 4.3). After adjustment for patient level variables the proportion of PIP varied fourfold (0.5 to 2 times the expected proportion) between prescribers but the majority of this variation was not significant. CONCLUSION: PIP is of concern for all prescribers. Interventions aimed at enhancing appropriateness of prescribing should target patients taking multiple medications

Proton pump inhibitors: potential cost reductions by applying prescribing guidelines.

BACKGROUND: There are concerns that proton pump inhibitors (PPI) are being over prescribed in both primary and secondary care. This study aims to establish potential cost savings in a community drug scheme for a one year period according to published clinical and cost-effective guidelines for PPI prescribing. METHODS: Retrospective population-based cohort study in the Republic of Ireland using the Health Services Executive (HSE) Primary Care Reimbursement Services (PCRS) pharmacy claims database. The HSE-PCRS scheme is means tested and provides free health care including medications to approximately 30% of the Irish population. Prescription items are WHO ATC coded and details of every drug dispensed and claimants\u27 demographic data are available. Potential cost savings (net ingredient cost) were estimated according to UK NICE clinical guidelines for all HSE-PCRS claimants on PPI therapy for ≥3 consecutive months starting in 2007 with a one year follow up (n=167,747). Five scenarios were evaluated; (i) change to PPI initiation (cheapest brand); and after 3 months (ii) therapeutic switching (cheaper brand/generic equivalent); (iii) dose reduction (maintenance therapy); (iv) therapeutic switching and dose reduction and (v) therapeutic substitution (H2 antagonist). RESULTS: Total net ingredient cost was €88,153,174 for claimants on PPI therapy during 2007. The estimated costing savings for each of the five scenarios in a one year period were: (i) €36,943,348 (42% reduction); (ii) €29,568,475 (34%); (iii) €21,289,322 (24%); (iv) €40,505,013 (46%); (v) €34,991,569 (40%). CONCLUSION: There are opportunities for substantial cost savings in relation to PPI prescribing if implementation of clinical guidelines in terms of generic substitution and step-down therapy is implemented on a national basis

General practitioner workforce planning: assessment of four policy directions

<p>Abstract</p> <p>Background</p> <p>Estimating the supply of GPs into the future is important in forecasting shortages. The lengthy training process for medicine means that adjusting supply to meet demand in a timely fashion is problematic. This study uses Ireland as a case study to determine the future demand and supply of GPs and to assess the potential impact of several possible interventions to address future shortages.</p> <p>Methods</p> <p>Demand was estimated by applying GP visit rates by age and sex to national population projections. Supply was modelled using a range of parameters derived from two national surveys of GPs. A stochastic modelling approach was adopted to determine the probable future supply of GPs. Four policy interventions were tested: increasing vocational training places; recruiting GPs from abroad; incentivising later retirement; increasing nurse substitution to enable practice nurses to deliver more services.</p> <p>Results</p> <p>Relative to most other European countries, Ireland has few GPs per capita. Ireland has an ageing population and demand is estimated to increase by 19% by 2021. Without intervention, the supply of GPs will be 5.7% less than required in 2021. Increasing training places will enable supply to meet demand but only after 2019. Recruiting GPs from overseas will enable supply to meet demand continuously if the number recruited is approximately 0.8 per cent of the current workforce per annum. Later retirement has only a short-term impact. Nurse substitution can enable supply to meet demand but only if large numbers of practice nurses are recruited and allowed to deliver a wide range of GP services.</p> <p>Conclusions</p> <p>A significant shortfall in GP supply is predicted for Ireland unless recruitment is increased. The shortfall will have numerous knock-on effects including price increases, longer waiting lists and an increased burden on hospitals. Increasing training places will not provide an adequate response to future shortages. Foreign recruitment has ethical considerations but may provide a rapid and effective response. Increased nurse substitution appears to offer the best long-term prospects of addressing GP shortages and presents the opportunity to reshape general practice to meet the demands of the future.</p