Impact of health expenditure on health outcomes in Ireland

    There have been major improvement in the health of the Irish population over the last 20 years, (e.g. McDaid, 2009 p228), with a rise in life expectancy overall of 5 years from 1990 to 2006. The rate of increase seems to have risen in about 1999, and while Irish life expectancy is still a little low by EU standards, there has been substantial improvement, especially for men. The health care system has many weaknesses, notably very poorly developed primary care, giving us, for example, strikingly low immunization rates (McDaid, 2009, p156). However public health care expenditure has risen substantially as the economy grew from 1995 onwards, form about €3 billion to about €15 billion in 2009. Overall health care expenditure has risen from 8.8% of GNP in 1995 to approximately 10.7% in 2007. What has been the impact of this substantial change, and how much of the improved health outcomes are attributable to the increased expenditure?

    The existing evidence strongly suggests that :-

    1. Mortality has fallen sharply over the last thirty years
    2. Healthcare expenditure has made a modest contribution to this, substantially less than one third of the total, and possibly only a few percentage points.
    3. Development of primary care, and the more effective delivery of prevention measures will likely lead to the greatest declines in mortality.

    The debate

    Two schools can be identified. The first arises from the work of Thomas McKeown (1976), and argues that the role of the health services in improving population measures of health is marginal, and that changes in wealth, in wealth distribution, and lifestyle are far more important. The second, exemplified by recent work from Mackenbach (1996), Bunker (2001) and Cutler (2006), argues that the contribution of medical care is substantial (e.g. half of the gain in life expectancy in the UK since 1990 (Bunker 2001)) and that it is cost effective ($19,900 per year of life gained in the US (Cutler 2006)1).

    The evidence

    This question raises a number of very difficult issues. The only empirical test would be to find a rich country that had not increased health care expenditure as its economy grew, and to compare this with its neighbours. There is no such country. There are a number of large scale analyses of country level data (e.g. Arah et al. 2005, Nixon and Ulmann 2006; Asiskovitch 2010, ) which provide the best available evidence.

    • Arah et al. (2005) analysed the same data to look at the relative impact of a range of public health variables on mortality. Their conclusion is that expenditure on public health has a major impact on both mortality rates and potential years of life lost. In contrast, proxy measures of expenditure on medical care (doctor visits per capita, and doctors per1,000 population) have a much smaller effect.
    • Nixon and Ulmann (2006) review the literature up to 2004, and report an analysis of their own which showed that changes in EU15 health expenditures from 1980 to 1995 had made a very modest contribution to improvements in life expectancy. This is consistent with most of the literature which they reviewed.
    • Asiskovitch used OECD data from 1990 to 2005, and analyses the impact of health care expenditure on life expectancy in men and women separately. She concludes that health care expenditure ha a very modest impact on changes in life expectancy at birth, less than 1 tenth of a year, but a substantially greater effect on life expectancy age 65 ( 0.9 years out of 2 for women, and 1.67 years out of 2.5 for men). Private funding of healthcare has much less impact than public funding.
    • The final evidence is a series of papers using Irish data from Kabir and colleagues. A detailed analysis of cardiovascular disease mortality data, and health service inputs suggested that, of the substantial decline in mortality from 1985 to 2005, one-third was attributable to health care, and two thirds to the modest reductions in risk factors attributed to public health interventions and lifestyle changes. Cardiovascular disease interventions are believed to be highly efficacious, more so than interventions for most other fatal diseases.


    • Arah OA, Westert GP, Delnoij Dm, Klazinga NS (2005) Health system outcomes and determinants amenable to public health in industrialized countries a pooled cross-sectional time-series analysis. BMC Public Health 5:81.
    • Asiskovitch S. (2010) Gender and health outcomes: the impact of healthcare systems and their financing on life expectancies of women and men. Soc Sci Med. 2010 70:886-95.
    • Bunker JP. (2001) The role of medical care in contributing to health improvements within societies. Int J Epidemiol. 30:1260-3.
    • Cutler DM, Rosen AB, Vijan S. (2006) The value of medical spending in the United States, 1960-2000. N Engl J Med. 355:920-7.
    • Kabir Z, Bennett K, Shelley E, Unal B, Critchley J, Feely J, Capewell S. (2007) Life-years-gained from population risk factor changes and modern cardiology treatments in Ireland. Eur J Public Health. 17:193-8.
    • Mackenbach JP (1996)The contribution of medical care to mortality decline – McKeown revisited. J Clin Epi 49:1207-1213.
    • McDaid D, Wiley M, Maresso A, Mossialos E (2009) Ireland – Health system review. Heath Systems in Transition 11:4. Copenhagen:WHO, European Observatory on Health Systems and Policies.
    • Macinko J, Starfield B, Shi L. (2003) The contribution of primary care systems to health outcomes within Organization for Economic Co-operation and Development (OECD) countries 1970-1998. Health Services Research 38:831-865.
    • McKeown T (1976) The modern rise of population, New York:Academic Press.
    • Nixon J, Ulmann P. (2006) The relationship between health care expenditure and health outcomes. Evidence and caveats for a causal link. Eur J Health Econ. 7:7-18.
This entry was posted in Health.

One comment on “Impact of health expenditure on health outcomes in Ireland

  1. birku says:

    it is interesting
    i like it specialy if it focuses on developing countries

Leave a Reply

Your email address will not be published. Required fields are marked *