OECD survey finds Ireland spends less on health care but others disagree

Ireland spends less than any other country in Western Europe on health, according to the OECD Health Statistics 2014. But how are we to square this with the recent assertion of the European Commission that Ireland spends more than its neighbours on health?

The OECD also found that Irish health staff, and especially consultants, are well paid by international standards. So how are we to square this with the frequent declaration of hardship by staff representative bodies? Anyway, why would so many doctors and nurses be leaving Ireland to work abroad if the pay here was as good as the OECD claims?

The first question is more easily answered. The OECD measured Ireland’s spending as a proportion of gross domestic product (GDP), whereas the Commission calculated spending against gross national income (GNI).

The difference between the two figures is the repatriated profits of multinationals in Ireland. This adds up to 25 per cent to the value of Ireland’s national wealth, whereas in other countries the difference between the two values is fairly small.

Highest salaries

The OECD calculation is arguably more pertinent when it comes to assessing whether we spend enough on our health system, but a recent paper by the Public Policy think tank says we should adjust the figures for demographic factors.

It makes the point that Ireland had the sixth youngest population out of the 34 OECD member countries.

That means we should have to spend less on health, because costs are highest in the countries with the highest proportion of over-65s.

When this adjustment is made, Ireland emerges with the highest level of public health expenditure in the OECD and the third highest level of total (public and private) health expenditure, behind the US and Mexico.

This kind of analysis would meet with resistance at home, but it may explain the continuing insistence of Troika members that cuts can still be made to the Irish health budget, even after reductions of over €3 billion since 2008.

The OECD's findings on Irish health pay aroused predictable hackles, particularly in relation to figures which appear to show that Irish hospital consultants are among the highest paid in the world.

Irish specialists earned an average €171,000 last year, higher than in any other OECD country except New Zealand and Luxembourg, according to the study.

When the figures are corrected for local purchasing power, the pay of Irish specialists is the highest in the OECD apart from Luxembourg and almost twice as high as in the UK.

Not like-for-like

The figures relate to public salaries of consultants and do not include private income and extra allowances or on-call payments, or the state pension cost, according to the OECD. However, a further 10 per cent has been taken from salaries under the last round of emergency cuts since the OECD figures were compiled.

So why then is there an exodus of highly qualified staff? Are the figures wrong? Or are doctors leaving for reasons other than pay? The Irish Hospital Consultants Association has pointed to a number of flaws in the OECD research.

It says the report does not provide a like-for-like comparison and underestimates the salaries paid to consultants in other countries.

For example, the figures for the UK do not include the substantial increments and merit awards consultants there can earn; British doctors are also automatically paid overtime, unlike in Ireland.

It also claims earnings in other countries are under-estimated; for example, by the inclusion of trainees in the calculations for Germany and the UK.

But if the OECD’s figures really are distorted or inaccurate, as the IHCA claims, then why not raise these issues directly with its officials in Paris?

It’s in the interest of everyone, doctors and policymakers, that figures are reliable and comparable.

This approach has been taken by members of the Irish Medical Organisation who objected to the way the OECD previously calculated GP's earnings.

As a result, the statisticians stopped relying on the HSE for earnings calculations and turned instead to the Revenue Commissioners.

The result in the current survey is a dramatic fall in GP earnings from previous studies, though direct comparisons cannot be made.

No longer are Irish GPs ranked among the highest earners internationally, because their expenses are taken into account differently.

Average earnings of €119,000 annually are not to be sniffed at, but they fall a long way short of the stratospheric calculations that appeared in earlier OECD surveys.

In any case, the OECD figures for consultant earnings should give no cause for surprise, given they are an average across the profession.

Senior practitioners on older contracts enjoy much higher salaries than newcomers taking up new consultant posts, particularly after the 30 per cent cut in starter salaries was introduced in 2012.

The opportunities for private practice are much lower among more recent entrants to the profession.

Manpower crisis

There is undoubtedly a manpower crisis in medicine. Other English-speaking countries, notably, Australia, Canada, the US and the UK, offer better pay and conditions than the Irish

health service

.

Comparisons with Continental European countries, such as are captured by the OECD, are of limited use because of the language barrier and traditional migration patterns.

The recently published MacCraith reports show a complex matrix of issues at play, of which pay is undoubtedly one. Other factors include staffing, resources, poor management, a lack of clear career pathway, regulation and the closure of wards and theatres.

The Government and the HSE has signalled its willingness to reverse its stance on consultant pay, but this action alone will not stop the doctor "brain drain"..