Irish Medical Organisation

IMO AGM Debate

Saturday 14th - 4.15pm

Motion for Debate - This house believes that the market model of healthcare is not the best option for Ireland.

Motion Proposed by Dr Mary Gary – IMO GP Committee
Motion Opposed by Dr Brian Turner – Economist UCC

 A Summary of the Debate:
Proposing the motion, Dr Mary Gray discussed the many contradictions of the market model as a platform for the provision of healthcare. As Woolhandler and Himmelstein (BMJ, 2007) state, the market model “brings healthcare into the realm of commerce where commodities or homogenous goods are bought and sold for a profit” and therefore provider profit is directly proportional to the level of sales.

In the US it is estimated that unnecessary care, fraud, inefficiencies and avoidable care costs account for between a quarter and a third of total US healthcare spending. (Reynolds BMJ, 2011).
The market concept of consumers has many contradictions: The difficulty of perceiving healthcare as a commodity is that patient’s needs and preferences differ; there is also the agent-principal issue where because consumers are generally the ill minority they depend on the provider for information about what services the consumer needs; markets by their very nature favour the wealthy and thus increase health inequalities; and in both insurance and service provision real choice is often restricted. All of these concepts conflict with the consumer’s right to healthcare services.

The market concept of providers also has numerous contradictions: The fee-for-service model provides an incentive to treat rather than minimise treatment and prevent disease; fees that do not adequately reflect costs can also lead to cherry-picking or service avoidance; The market also conflicts with a doctor’s professional responsibility to act in the best interest of their patients and to be aware that healthcare is a limited resource and competition stimulates rivalry yet healthcare requires co-operation between providers.

EU Articles and case law establish the following objectives for healthcare: 1) universal coverage; 2) solidarity and 3) high quality of care. Leading opinions believe that these objectives should not be put under pressure by competition law.

Opposing the motion, Dr Brian Turner discussed how markets can work in healthcare. It is widely held that a free market is not appropriate for healthcare provision or purchasing, because incentives will lead to market failures. Instead, it is suggested that markets for healthcare can work if they are regulated or managed.

If we look at the Irish healthcare system, we can see many examples of markets at work, for example the markets for general practitioner services, physiotherapists, pharmacies and private health insurance, to name but a few. Some of these markets work well, while some are beset by market failures.

An example of a market that works well is that of general practice. GPs are usually self-employed or working in a practice, in essence competing (albeit in a regulated environment) against other GPs or practices for patients. Yet general practice is one area in which we do not see any differentiation in the treatment of public and private patients.

A market that does not work quite as well is that for private health insurance. This market is currently suffering from problems of risk selection and market segmentation. These market failures mean that consumers are not getting the full benefits of competition. In order for these issues to be addressed, and for the full benefits of competition to accrue to consumers, this market needs more regulation, in particular, risk equalisation and a standardised plan or suite of plans.

The market mechanism equates supply and demand of goods and services. In this respect, such matching is not taking always taking place in the Irish healthcare system at present. One example of that is the restriction on the supply of medical practitioners. There have been a number of calls to increase this supply, which is artificially restricted. A market mechanism would inherently equate supply with demand. This would also apply to the increases in hospital provision that are recognised as being needed and the centralisation of services into centres of excellence and downgrading of others might gain more acceptance if hospitals decide themselves to become niche players.

The Dutch system, on which [Minister] James Reilly has modelled some of his reform proposals, has consistently been ranked in the top two systems from 2005 to 2009 in this Index. The Dutch reforms are a prime example of what is known as managed competition in healthcare. This involves consumers acting as informed decision-makers, insurers selectively contracting with healthcare providers, and providers competing with each other on the basis of price, quality and service.

Managed competition can bring benefits, but it is a difficult thing to achieve so great care should be taken to ensure that it is done correctly, even if that means taking a slower and stepwise approach to the implementation of a market model in the Irish healthcare system.
Following the question and answer session the audience voted unanimously in favour of the motion.

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