This was / is a bigger nut to chew & digest than i originally expected, Having said that it is an issue which will have a direct impact on all of us at some point in our lives and therefore it is important that we appreciate where we have come from and how that has resulted in us currently having a very much less than satisfactory public healthcare system.
Voluntary Health Insurance (VHI) was set up in 1957 as a state owned, non-profit monopoly insurer, designed to cover acute hospital care for the 15% of top income earners who were excluded from the public system. The government encouraged participation and provided subsidy in the form of tax relief on premiums. In the late 1980s an austerity programme reduced public spending generally but resulted in very severe cutbacks in health care which had lasting consequences. Even though spending in health care increased very significantly from 2000 the system was still suffering from the lack of infrastructural investment in the 1980s and early 90s. As a result the ratio of beds and lower number of consultants in relation to the population in comparison with other OECD countries has persisted to the present day.
The long-standing government policy of facilitating and subsidising private health insurance was largely based on the belief that those using the private system would reduce pressure on the public system and furthermore since most of the private work was carried out in public hospitals there was the added advantage of the public system earning an income. However these perceived benefits are questionable; for every bed taken up by a private patient there is one less available for public patients which may in fact give rise to longer waiting times especially in periods of steady population growth and the resulting increased demands on the public healthcare system.
As we all know politicians making decisions on healthcare issues are subject to electoral pressures and lobbying. Those with expensive private healthcare plans are in all probability better positioned to have access to politicians and their handlers than are those in the community most in need of the services of the public healthcare system. Also where there is a high proportion of private healthcare insurers there may be a temptation for politicians to invest less in those areas in the public healthcare sector and possible votes lost as a consequence may not be significant.
The third and final part hopefully will bring us up to the present day situation.