Irish Economy
Irish health spending among highest of developed world; Consultants best paid
By Michael Hennigan, Finfacts founder and editor
Jul 1, 2014 - 6:36 AM

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Health spending has started to rise again after stagnating or even falling in many of the 34 OECD countries (which includes all the world's developed economies) during the crisis. But the pace of growth remains well below pre-crisis rates, especially in Europe, according to OECD Health Statistics 2014. Irish spending is among the highest of the developed world and medics are among highest paid.

In Europe, health spending continued to fall in 2012 in Greece, Italy, Portugal and Spain, as well as in the Czech Republic and Hungary. In Greece, health spending in real terms was 25% lower in 2012 than in 2009, primarily driven by cuts in public spending. 

By contrast, outside Europe, Chile and Mexico saw strong growth in health spending in 2012, at 6.5% and 8.5% respectively, largely due to further efforts towards universal coverage and access to healthcare. Health spending in Korea has continued to grow at an annual rate of 6% since 2009, mainly driven by increases in private spending. 

In the United States, health spending grew by 2.1% in 2012, above the OECD average but similar to growth rates in 2010 and 2011.

Overall health spending accounted for 9.3% of GDP on average across OECD countries in 2012, little changed from 9.2% in 2011, but up from 8.6% before the crisis. 

Total Irish health spending accounted for 8.9% of GDP in 2012, slightly less than the OECD average of 9.3% but Ireland's rate as a ratio of GNP (gross national product which mainly excludes the profits of active foreign-owned affiliates in the economy) was 10.9% - - with the US at 16.9% of GDP, Netherlands 11.8%; France 11.6%; Switzerland 11.4%; Germany 11.3%; Austria 11.1%; Denmark 11% and Canada at 10.9%.

The UK and Norway were at the OECD average of 9.3%. Finland's ratio was 9.1%.

Monday's report says that while spending on hospital and outpatient care grew in many countries in 2012, almost two-thirds of OECD countries have experienced real falls in pharmaceutical spending since 2009. Reductions have been driven by price cuts, often through negotiations with manufacturers, and a growing share of the generic market. This share has increased due to patent expirations for a number of high-volume and high-cost brand name drugs, and policies to promote the use of cheaper generic drugs. 

The share of the generic market grew on average by 20% between 2008 and 2012 to reach 24% of the total pharmaceutical expenditure. The increase was particularly steep in Spain (+ 100%), France (+60%), Denmark (+44%) and the United Kingdom (+28%).

The market share of generics in Ireland nearly doubled since 2008, to reach 13% by 2012, although the OECD notes that this still remains below the generic share in most other OECD countries. This compares with Germany's 76% share and the UK's 75% share.

In 2012, life expectancy in Ireland stood at 81.0 years, almost one year above the OECD average (80.2).

The proportion of daily smokers in Ireland has decreased over the past decade, from 33% in 1998 to 29% in 2007 (latest year available), but this remains well above the OECD average (21% in 2012).

Alcohol consumption in Ireland is among the highest in OECD countries, with a consumption of 11.6 litres of alcohol per adult in 2012. Although alcohol consumption in Ireland has declined over the past decade, it still remains well above the OECD average (9.0 litres).

The public sector is the main source of health funding in nearly all OECD countries. In Ireland, 68% of health spending was funded by public sources in 2012, slightly less than the average of 72% in OECD countries.

Health expenditure per capita in 2012 was $3890 (purchasing power parity - - PPP- based).

The average pay of medical specialists/ consultants in 2013 was €177,000 compared with €91,000 in Germany in 2010 and €72,000 in Italy in 2013 while the Finnish level was €71,000 in 2012.

On a dollar PPP basis, Irish salaries with Luxembourg were at the highest in the world.

The Paris based Organisation for Economic Co-operation and Development is a think-tank for 34 mainly developed countries. OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Commission takes part in the work of the OECD.

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