Tuesday, July 06, 2010

sick to the teeth...

You may recall a blog post a few months back on dental services in Ireland. Essentially, I pointed out that a staggering 399,262 more treatments were provided by dentists to medical card patients in Ireland during 2009. That was a full 34% more treatments carried out than was projected by the HSE based on year-on-year trends since the scheme's inception in 1994. It is true that there were more medical card holders in 2009, but only 4% more. I strongly suggested that it is completely infeasible for this extra 4% of people to have induced 34% more demand in the system and that the alternative possibility -- a 30% decline in dental health in one year -- is equally ludicrous. The figures are strongly suggestive of the phenomena of supplier induced demand. The phenomena is well documented in the international health economics literature and often arises with "free" schemes essentially because 'the supplier of the service is also the demander' (..due to the inherent information asymmetry in the health care environment that requires a trust relationship between the health professional and their patient).

The HSE, faced with these 'inexplicable' increases and substantial narrowing of their overall budget during 2010, decided to cap the amount payable for the scheme to the pre-2009 level; the amount paid before the incredible 34% increase in dental services. The immediate response of the Irish Dental Assoc. was to claim that their members would now only be able to offer emergency services and oral examinations. I have heard no update on this position since.

So what is new??

In June, two dentists brought a case to the High Court to seek an injunction against the HSE implementing the spending cap. The claimed that the measures were a breach of contract, and would have "disastrous consequences" for them as dentists and "a dramatic effect on public health". The were successful, and won an injunction against the HSE preventing them from implementing the spending cap.

The CEO of the Irish Dental Assoc. welcomed the decision saying that he had "huge concerns for the dental health of the country". He described the HSE's move as "unsafe, unworkable, and unethical" and further went on to say that "it would hit the most vulnerable in our society hardest". The HSE subsequently appealed to the Supreme Court against the High Court injunction, but a 'stay' was placed on the High Court's injunction. So, from what I can decipher, a full hearing will now go ahead later this year (most likely early October)

The story looks like it will continue for some time. I can't help but wonder, however, if the case for supplier induced demand might be worth a hearing? I've heard nothing about it so far (apart from comments here) and I certainly think it is an issue worth considering in this case. At the very least, the Irish Dental Assoc. could be asked to explain the 34% increase in their services during 2009.


Kevin Denny said...

Good that someone is getting their teeth into this (sorry...). I wonder is it the case that dentists' incomes from private patients fell around the same time that their income from public patients rose so spectacularly? It would only be a coincidence of course.

Mark McG said...

Being cynical I suppose you’d expect nothing less from the IDA, it’s up to someone else to be objective. But playing devil’s advocate…

How sure are we this is a bad thing? There are deficiencies in plenty of areas in terms of provision of service by the HSE, so if this was as a result of clearing a backlog or waiting lists it could be a good thing.

On a related matter from the Irish Examiner today:
“Half of adults avoid GP due to cost of visit”

Peter Carney said...

Kevin: yes, this is referred to as the 'target income hypothesis' in the literature. If, in this case, dentists have multiple schemes that generate revenue and one is cut, you can expect the others to get more action, especially on third-party pays (the HSE/ the general public) schemes. It is interesting to note that the scheme that is currently in the Court's is the last one remaining. PRSI scheme has been almost completely abolished due to budget, and general demand, and insurance demand, are down. But this is the nature of the current economy we are living in.

Mark: In Ireland dentists are health professionals. They are bound by a code of ethics and regulated by a Dental Council. While I agree that more measures and checks could be in place, I would reiterate the inherent asymmetric information difficulties in the health care setting and suggest that dentists seek to maintain respect of their established profession by ensuring they can facilitate and honour their special role.

There is no evidence, or suggestion, of a backlog. In fact, the Irish Dent. Assoc. was in dispute with the HSE in 2009 on other matters relating to the PRSI scheme and some had removed all services to the HSE as I recall. Therefore, if anything, you would have expected service volumes to be down slightly, not up 34%, in 2009.

The issue of GPs is separate in many ways (they aren't paid a fee- per-service, for one) but it is still interesting that you mention this issue. You will be aware, from other posts, that we have much fewer physicians in Ireland than is average across the EU. This is a key factor in the pricing of these services and is an obvious place to start to remedy the situation. I have argued before against alternatives (e.g., the FG plan) that shy away from this mutable reality and seek to fix the problem by granting free GP care across the country. Anyway my main point here is, incidentally, that Ireland has the fewest dentists per capita in Europe.