Background Notes

Introduction

This release is the first official publication by CSO of health care expenditure estimates for Ireland according to the international standard of the System of Health Accounts, 2011.  The release provides for the first time a detailed profile of Irish current health expenditure according to the classifications of the functions of health care (ICHA-HC), health care provision (ICHA-HP), and financing schemes (ICHA-HF).  This level of detail is available only for reference year 2013. Data will be available at this level of detail annually in the future. 

Estimates for earlier years which were reported only as high level aggregates have been revised as a result of the work undertaken to produce this more detailed profile of health expenditure – see section Revision of Previous Estimates (2000 to 2012)

International comparisons for this data can be found in the Eurostat data explorer http://ec.europa.eu/eurostat/data/database under the theme:

Population and Social Conditions\Health\Health Care\Health Care Expenditure and in the OECD statistical database at http://stats.oecd.org/index.aspx?DataSetCode=SHA.

Overview of the System of Health Accounts

What is the System of Health Accounts?
The System of Health Accounts (SHA) was devised by the Organisation for Economic Co-operation and Development (OECD) and has been adopted for joint reporting of health care expenditure by the OECD, Eurostat and the World Health Organisation.  It is an extension of the core National Accounts and consists of a family of interrelated tables for reporting expenditure on health and its financing. 

The SHA contains common concepts, definitions, classifications and accounting rules to enable comparability over time and across countries.  It provides a basis for uniform reporting by countries with a wide range of different models of organising their national health systems.  The SHA also draws a commonly defined boundary around what is health care and distinguishes it from related social care services.  This is particularly important for international comparisons given the diversity in health and social care services provision and their funding across Europe and the rest of the world.

The provision of health care and its funding is a complex, multi-dimensional process.  The set of core tables in the SHA addresses three basic questions:

1.  Where does the money to finance the health system come from? (financing schemes);
2.  Who does the money go to? (provider of health care services and goods);
3.  What kind of (functionally defined) services are performed and what type of goods are purchased?

Consequently, the SHA is organised around a tri-axial system for the recording of health expenditure, by means of the International Classification for Health Accounts (ICHA), defining;

• health care financing schemes (ICHA-HF);
• health care by service provider industries (ICHA-HP);
• health care by function (ICHA-HC);

Summary details of the categories in each classification are given in the section International Classification of Health Accounts and linked documents.  A detailed description of the classifications and their application is set out in the manual on the System of Health Accounts which is available at http://www.who.int/nha/sha_revision/en/.

Revision of Previous Estimates (2000 to 2012)
A key feature of the SHA methodology is defining the boundary of health care services and distinguishing it from health-related services and social care services.  In the course of the SHA implementation project, the boundary of health care services in Ireland was revised to include services which previously had been defined as social care services and thus excluded from estimates of health care expenditure.

Prior to the introduction of the SHA, Ireland reported data on health care expenditure to international organisations at a high level only.  These estimates have now been revised in light of the outputs of the SHA project and a revised times series of health care expenditure for 2000 to 2012 is available.    The revisions predominantly affect public expenditure on health and relate to the expansion of the health care boundary to include a greater proportion of long-term care services, in particular services for older people and people with a disability. The data sources and methodology prior to 2013 are different to the current method under the SHA and result in a break in series in 2013.

National application of the SHA standard
A detailed review of data sources to allow coding to the SHA classifications has been undertaken over the past two years, and much progress has been made.  However this work is ongoing and revisions, especially to the more detailed profile of the data are to be expected.  In particular some revisions to the functional categorisation of HSE expenditure are now expected due to an on-going review of data coding.

Specific known data issues at this point include:
All HSE hospital expenditure funded by HSE Mental Health Services has been allocated to HP.1.2 Mental Health Hospitals.  This is not in accordance with the SHA standard which requires that where the services are provided by a General Hospital (HP.1.1), the expenditure should be recorded under this provider as specialist care.  This will be reviewed in future iterations of the data.

Expenditure included under the SHA reporting standard should relate to Final Consumption Expenditure (FCE) only.  The expenditure included in this publication includes some items that should not be included in FCE e.g. interest payments.  This deviation is not material.

Coverage
Non-Profit Providers: There is on-going work to improve the coverage of data on expenditure on health care.  In particular, further development work on Non-Profit providers of health care and their non-government funding is on-going.  The funding of health care services from Non-Profit Institutions Serving Households Financing Schemes (HF.2.2) is under represented in the current data and will be revised in future data reporting.

Residents and Non-Residents:  Health expenditure should relate only to residents of the Republic of Ireland.  Most data sources do not capture information on residence and thus expenditure on non-residents may be included in the data (export of health care services).  Expenditure by residents in other countries is also difficult to capture, particularly out-of-pocket expenditure.  Some expenditure funded by the HSE and private health insurers has been captured.  There is likely to be an underestimate of import of health care services in the Irish SHA data. 

Health Care/Social Care Boundary: The project to implement the SHA reporting standard in Ireland reviewed the boundary of health care and social care with the HSE Service Providers.  This resulted in a number of services and the associated expenditure, previously categorised as social care, being reclassified to health care.  Given that health care and social care are often delivered in the same package of services, it has been hard to separate the two types of services and thus the predominant activity (generally health care) has been used to classify the activity and associated expenditure.  This has resulted in the amount of health care being somewhat over-stated in some areas.

International Classification of Health Accounts

This section provides some detail on each classification.  Details of the current application of the standard in Ireland are available at http://www.cso.ie/en/surveysandmethodology/nationalaccounts/.  The SHA manual provides a full description of the classifications and their categories.  The manual is available at http://www.who.int/health-accounts/methodology/sha2011.pdf.

ICHA – HF:  Health Care Financing Schemes
Health care financing schemes are structural components of health care financing systems.  They are the main types of financing arrangements through which people obtain health services.  These include:

• government schemes
• social health insurance
• compulsory private insurance
• compulsory medical saving accounts
• voluntary health insurance
• other financing arrangements in which participation is voluntary
• out-of pocket expenditure by households.

For information on mapping of Irish health care financing system to the ICHA-HF classification and data sources used, please see the methodological note Mapping of the Structure of Health Care Financing in Ireland to the Health Care Financing Schemes Classification (ICHA – HF) within the System of Health Accounts at http://www.cso.ie/en/surveysandmethodology/nationalaccounts/

ICHA – HP: Classification of Health Care Providers
The classification of health care providers (ICHA-HP) classifies all organisations that contribute to the provision of health care goods and services, by arranging country-specific provider units into common, internationally applicable categories. The “principal activity” undertaken is the basic criterion for classifying health care providers.  These include:

• Hospitals
• Residential long-term care facilities (e.g. for older people or for people with a disability)
• Ambulatory health care providers (e.g. GPs, dentists)
• Ancillary service providers (e.g. transport, emergency rescue, laboratory services)
• Retailers and other providers of medical goods (e.g. pharmacies)
• Providers of preventive care (e.g. organisation of public health programmes)
• Providers of health care administration and financing
• Other providers (e.g. households, other industries, rest of world)

For information on mapping of Irish health care providers to the ICHA-HP classification please see the methodological note Mapping of Health Care Providers in Ireland to the Provider Classification (ICHA – HP) within the System of Health Accounts at http://www.cso.ie/en/surveysandmethodology/nationalaccounts/.

ICHA – HC: Classification of Health Care Functions Explained
The functional classification under the SHA is the key classification for defining the boundary of health care. It groups health care services by purpose.  The first five categories relate to goods and services consumed by individuals.  These categories comprise

• Curative and rehabilitative care – where the principal intent is to:
  • relieve symptoms of illness or injury, to reduce the severity of an illness or injury, or to protect against exacerbation and/or complication of an illness and/or injury that could threaten life or normal functioning: and/or
  • to empower persons with health conditions who are experiencing or are likely to experience disability so that they can achieve and maintain optimal functioning, a decent quality of life and inclusion in the community and society.

• Long-term care (health) – which consists of a range of medical and personal care services with the primary goal of alleviating pain and suffering and reducing or managing the deterioration in health status in patients with a degree of long-term dependency.  The SHA distinguishes between long-term care with a “health” purpose and long-term care with a “social” purpose.  As these elements of long-term care are often delivered in a single package of care, it is very difficult to separate them – as has been noted above in the case of Ireland.
• Ancillary services such as laboratory services, imaging services, patient transport and emergency rescue.  Data is reported explicitly in this category only when the services are received independently of an overall episode of health care – the majority of these services are recorded as part of curative and rehabilitative or long-term care and are not separately identified.
• Medical goods dispensed to outpatients – by a health care establishment or by a retailer of medical goods.  Like ancillary services, those goods consumed as part of other functions are not identified separately.

Two other categories relate to the collective consumption of health care, namely:

• Prevention and public health services – such as information, education and counselling programmes, immunisation programmes, screening programmes and disease surveillance.
• Health administration and governance – includes the formulation and administration of government policy; the setting of standards; the regulation, licensing or supervision of producers.  These activities are mainly carried out by governments but may also be provided by private bodies such as health insurers and advocacy/representative groups.

For information on mapping of Irish health care services to the ICHA-HC classification and data sources used, please see the methodological note Mapping of Health Care Services in Ireland to the Functions Classification (ICHA – HC) within the System of Health Accounts at http://www.cso.ie/en/surveysandmethodology/nationalaccounts/.

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