Economic & Social Research Institute: 'Projections of Expenditure for Primary, Community and Long-Term Care in Ireland'

DUBLIN, Ireland, July 28 -- The Economic and Social Research Institute issued the following report (No. 126) entitled "Projections of Expenditure for Primary, Community and Long-Term Care in Ireland, 2019-2035, Based on the Hippocrates Model".

The report was written by research officers Brendan Walsh, Conor Keegan and Aoife Brick, senior research officers Sheelah Connolly and Maev-Ann Wren, associate research professors Adele Bergin and Sean Lyons, research affiliate Samantha Smith and Leonie Hill.

* * *

Here are excerpts:

FOREWORD

This report was prepared by researchers at the Economic and Social Research Institute (ESRI) for the ESRI Research Programme in Healthcare Reform, which is funded by the Department of Health. The report analyses expenditure on primary, community and long-term care services and projects expenditure for these services for the years from 2019 to 2035. Published as an ESRI Research Series Report, it is the third report applying the Hippocrates Model of healthcare demand and expenditure developed at the ESRI.

The ESRI Research Programme in Healthcare Reform was agreed between the ESRI and the Department of Health in July 2014. The broad objectives of the programme are to apply economic analysis to explore issues in relation to health services, health expenditure and population health, in order to inform the development of health policy and the Government's healthcare reform agenda. The programme is overseen by a Steering Group comprising nominees of the ESRI and the

Department of Health, which agrees its annual work programme. The Steering Group agreed in 2015 that this programme would include the development of a projection model of healthcare demand and expenditure. Work on developing the model, known as the Hippocrates Model, began in that year. The objectives of the development and application of the Hippocrates Model are to inform health and social service planning in Ireland; assist financial planning for the healthcare system; provide information relevant to planning for capacity, services and staffing; identify future demand pressures, and set out a framework in which to analyse the effects of potential system changes and reforms.

The ESRI is responsible for the quality of this research, which has undergone national and international peer review prior to publication. This report was prepared by Dr Brendan Walsh, Dr Conor Keegan, Dr Aoife Brick, Dr Sheelah Connolly, Dr Adele Bergin, Dr Maev-Ann Wren, Dr Sean Lyons, Ms Leonie Hill and Dr Samantha Smith, and reflects their expertise and views. The views expressed in this report are not necessarily those of other ESRI researchers, the Minister for Health, Department of Health or organisations represented on the Steering Group.

* * *

TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS ... V

FOREWORD ... VII

EXECUTIVE SUMMARY ... VIII

CHAPTER 1 INTRODUCTION ... 1

1.1 Introduction ... 1

1.2 Objectives ... 2

1.3 Overview of the non-acute system ... 2

1.4 Non-acute services included in report ... 7

1.5 System changes during the Covid-19 pandemic ... 10

1.6 Model scope and modelling approach ... 12

1.7 Considering the non-acute data landscape ... 13

1.8 Structure of the report ... 14

CHAPTER 2 BACKGROUND ... 15

2.1 Introduction ... 15

2.2 Drivers of healthcare expenditure ... 15

2.3 Previous evidence on health and social care expenditure in Ireland ... 17

2.4 Top-down and bottom-up costing ... 22

CHAPTER 3 PROJECTION SCENARIOS AND MODELLING ... 28

3.1 Introduction ... 28

3.2 Macroeconomic scenarios ... 28

3.3 Demographic scenarios ... 30

3.4 Hippocrates model ... 31

3.5 Expenditure projection scenarios ... 36

3.6 Summary ... 39

CHAPTER 4 FINDINGS: GENERAL PRACTICE EXPENDITURES ... 40

4.1 Introduction ... 40

4.2 General practice in Ireland ... 40

4.3 Data and methods ... 41

4.4 Findings - baseline analysis ... 49

4.5 Findings - expenditure projections ... 52

4.6 Summary ... 55

CHAPTER 5 FINDINGS: PUBLIC HEALTH NURSING AND COMMUNITY THERAPY SERVICES EXPENDITURES ... 58

5.1 Introduction ... 58

5.2 Data and methods ... 59

5.3 Findings - age distribution ... 64

5.4 Findings - baseline expenditure ... 65

5.5 Findings - expenditure projections ... 66

5.6 Summary ... 71

CHAPTER 6 FINDINGS: COMMUNITY PHARMACEUTICAL EXPENDITURES ... 72

6.1 Introduction ... 72

6.2 Community pharmaceuticals in Ireland ... 72

6.3 Data and methods ... 75

6.4 Findings - baseline analysis ... 79

6.5 Findings - expenditure projections ... 83

6.6 Summary ... 89

CHAPTER 7 FINDINGS: LONG-TERM RESIDENTIAL CARE EXPENDITURES ...

7.1 Introduction ... 91

7.2 Role of long-term residential care in health systems ... 91

7.3 Data and methods ... 92

7.4 Findings - baseline analysis ... 97

7.5 Findings - expenditure projections ... 98

7.6 Summary ... 101

CHAPTER 8 FINDINGS: HOME SUPPORT EXPENDITURES ... 103

8.1 Introduction ... 103

8.2 Role of home support in health systems ... 103

8.3 Data and methods ... 104

8.4 Findings - baseline analysis ... 108

8.5 Findings - expenditure projections ... 110

8.6 Summary ... 113

CHAPTER 9 SUMMARY AND DISCUSSION ... 115

9.1 Introduction ... 115

9.2 Summary and discussion of findings on baseline and projected acute expenditure by service ... 116

9.3 Sensitivity analysis ... 122

9.4 Limitations ... 125

9.5 Policy implications ... 126

9.6 Conclusions and reflections ... 128

9.7 Future research ... 130

REFERENCES ... 132

APPENDIX A LOCAL HEALTH OFFICES AND COMMUNITY HEALTH ORGANISATIONS ... 140

APPENDIX B MEDICAL CARD AND PRIVATE HEALTH INSURANCE COVERAGE ... 141

APPENDIX C WAITING LIST MANAGEMENT: COMMUNITY THERAPY SERVICES ... 142

APPENDIX D COMMUNITY PHARMACEUTICALS ... 146

* * *

EXECUTIVE SUMMARY

INTRODUCTION

This report develops baseline estimates of expenditure in 2019 for ('non-acute') primary, community and long-term care services in Ireland, and projects expenditures for these services to 2035. It provides expenditure projections across different pressure scenarios that incorporate varying assumptions about the drivers of health and social care expenditure.

The broad objectives of this report are to:

* provide comprehensive estimates of current expenditure on primary, community, and long-term care services in Ireland in 2019;

* examine the relative impact of demographic and non-demographic factors on projected expenditure;

METHODS

The analysis is undertaken using the Hippocrates Model, a macro-simulation model created by the ESRI. The model is developed from a demand and cost base in 2019 to project expenditures for individual services. Demand is projected through developing and applying assumptions in relation to population change, healthy ageing, and other potential demand drivers. Population projections are provided by the ESRI's demographic model (COSMO) based on assumptions in relation to fertility, mortality and net migration. Demographic assumptions have been updated to reflect the effects of the Covid-19 pandemic to date. Projected activity is then multiplied by projected unit costs in each future period to project expenditure. The unit cost of delivering a unit of service in 2019 is estimated and disaggregated into pay and non-pay components. Projections of government-sector earnings and general inflation inform projected trajectories in pay and nonpay costs. The report does not forecast expenditure but provides projections of expenditure requirements based on clear assumptions on how key drivers of demand and cost will evolve over time.

Projected expenditures for each service out to 2035 are based on scenarios tailored to that service's characteristics. Low-pressure, central and high-pressure scenarios vary assumptions related to population change, healthy ageing, cost drivers, and models of care change for each service.

The report examines most key primary, community and long-term care services in Ireland. Specifically, the services included in the report are:

* general practice

* general practitioners (GP) and practice nurses (PN);

* public health nursing (PHN) and selected primary care community therapy services;

* community pharmaceuticals;

* long-term residential care (LTRC); and

* home support.

SUMMARY OF BASELINE EXPENDITURE

General practice: we estimate that public and private general practice expenditure was Euros1,010m in 2019. Expenditure on Medical Card and GP visit card (GPVC) holders accounted for Euros556m. Most of the general practice expenditure, Euros876m (87%), was spent on care delivered by a GP.

Public health nursing and primary care community therapy services: we estimate that expenditure on publicly funded PHN was Euros269m in 2019. Estimated expenditure on publicly funded community-based occupational therapy, physiotherapy, and speech and language therapy provided through HSE Primary Care services was Euros51m, Euros54m and Euros50m respectively.

Community pharmaceuticals: we estimate that expenditure on all publicly funded community pharmaceutical schemes was Euros2,265m in 2019. Items dispensed to individuals on the General Medical Service (GMS) scheme accounted for Euros951m (42%), with items dispensed to individuals via the High Tech (HT) scheme accounting for Euros850m (39%).

Long-term residential care: we estimate that expenditure on public and private LTRC was Euros1,957m in 2019. The Nursing Home Support Scheme (NHSS) accounted for Euros1,422m. Overall, the State contributed Euros1,322m (68%) of total LTRC expenditure.

Home support: we estimate that expenditure on public and private home support was Euros616m in 2019. The State contributed Euros456m (74%) of total home support expenditure.

* * *

TABLE ES.1 Estimated health and social care expenditure, 2019

[Link to table at bottom of document.]

* * *

SUMMARY OF PROJECTED EXPENDITURE

Expenditure is projected to increase across almost all services examined in this report. Figure ES.1 illustrates projected changes in nominal (growth is driven by changes in demand and cost) expenditures between 2019 and 2035 for each respective service's central scenario. The low- and high-pressure scenario results are presented in parentheses.

General practice: Expenditure on general practice is projected to be Euros1,735m (Euros1,614m-Euros2,045m) in 2035. This implies a 3.4 (2.9-4.5) per cent annual growth rate. Increases in pay contribute 52 per cent and increases in non-pay contribute 26 per cent expenditure growth. Population growth and ageing contribute only a small percentage of the projected expenditure increases.

Public health nursing and primary care community therapy services: Expenditure on PHN is projected to be Euros574m (Euros538m-Euros650m) in 2035. Expenditure on the selected community therapy services provided through HSE Primary Care services is projected to be Euros277m (Euros260m-Euros312m). Due to substantive data limitations for these services, we are unable to incorporate assumptions on healthy ageing, waiting-list management, or models of care change. This, in addition to the inability to generate comprehensive baseline utilisation profiles, overall may lead to an underestimate of future expenditure requirements for these services.

Community pharmaceuticals: Expenditure on the GMS, Drugs Payment (DP) and Long-Term Illness (LTI) schemes is projected to be Euros1,787m (Euros1,390m-Euros2,173m) in 2035. This implies a 1.7 (0.1-2.9) per cent average annual growth rate. In 2035, nominal expenditure on the HT scheme is projected to be Euros3,215m (Euros2,301m- Euros4,434m). This implies an 8.3 (6.1-10.5) per cent average annual growth rate. The increase in HT expenditure reflects a continuation of historic growth in demand for expensive, high-tech medicines.

Long-term residential care: Expenditure on LTRC is projected to be Euros4,391m (Euros3,819m-Euros5,661m) in 2035. This implies a 5.2 (4.3-6.9) per cent annual growth rate. Increases in costs account for 59-66 per cent of expenditure growth. Population ageing also contributes 29-46 per cent of expenditure growth. Substitution to home support may offset expenditure by 15 per cent.

Home support: Expenditure on home support is projected to be Euros1,941m (Euros1,217m-Euros2,979m) in 2035. This implies a 7.4 (4.4-10.4) per cent annual growth rate. Increases in costs are important drivers of home support expenditure increases. However, assumed increased demand as a result of the establishment of the home support scheme is the biggest driver of home support expenditure growth.

* * *

FIGURE ES.1 Projected nominal expenditure growth by health and social care service, 2019-2035

[Link to figure at bottom of document.]

* * *

POLICY IMPLICATIONS

The main finding of this report is that, due to a combination of a growing and ageing population and increasing costs of care delivery, expenditure on primary, community and long-term care will be required to increase substantially by 2035. The findings provide an evidence base for workforce and capacity planning and for the implementation of some Slaintecare proposals.

The scope of the analysis in this report has been hampered by the poor data available for many services. Policymakers should prioritise designing a health data infrastructure that caters for the requirements of both local and national-level service planners. It should allow for accurate day-to-day patient management and facilitate future demand and expenditure projections and workforce planning. Integrating an individual health identifier (IHI) and electronic health record (EHR) would allow for patients to be followed across services and time, to help understand their overall use of services and provide a picture of the complexity of the patients being treated.

Changes in the cost of delivering care, particularly pay-related costs, is the main driver of expenditure growth. In addition, population ageing, and additional modelled demand for HT medicines and the assumed introduction of the statutory home support scheme, are key drivers of expenditure growth. Identifying approaches to address the projected increases in the unit cost of care delivery should be an important consideration of policymakers.

The analysis in this report does not include model of care changes for many services. Follow-up research will examine the potential impact of introducing proposed Slaintecare reforms, specifically regarding changing models of care of specific patient groups, substitution of care across the acute hospital and nonhospital system, and the potential impact of the Covid-19 pandemic.

* * *

View figure, table and full report at https://www.esri.ie/system/files/publications/RS126_0.pdf