Sunday, May 16, 2010

Economics 16/05/2010: IMF on fiscal stability IV

So continuing with the IMF Fiscal Outlook report data, building on the three previous posts: Part 1 (here), Part 2 (here) and Part 3 (here), take a look at another wonderfully ludicrous myth perpetrated by the Irish Left: the Myth of Underinvestment in Public Health in Ireland.

The Myth of Healthcare has two parts to it: Part 1: "Irish Government has under-invested in Irish public health." Part 2: "We need to ramp up Health spending to achieve better services".

The data above is taken from the paper that formed the background to the IMF report, titled “From Stimulus to Consolidation: Revenue and Expenditure Policies in Advanced and Emerging Economies”, Prepared by Fiscal Affairs Department, Approved by Carlo Cottarelli (30-Apr-10). My calculations cover GNP comparatives and ranked results, plus the change between 1990 and 2007. IMF reports changes between 1960 and 2007 and 1970 and 2007. I find these data problematic, because of a large number of gaps in the data for these years. In addition, I would have trouble comparing Ireland between 1960 and 1970 through 2007 to majority of the countries on the list, as arguably, Ireland was not a developed or advanced economy in the decades prior to 1990.

What the table above clearly shows is that:
  • In 2007 Irish Government spending on public healthcare was 8th highest in the group of advanced economies, measured as a share of our income.
  • Accounting for the size of the recession in Ireland and a lack of significant fall-off in public spending on health in Budgets 2009-2010, one can relatively safely assume that we at least retained this position in 2010.
  • In terms of increases in spending, we are clearly nowhere near the bottom of the league. We recorded 8th highest increase in spending in the last 17 years of all countries in terms of GDP.
  • We achieved second highest increase in spending as a share of national income in the sample of developed nations.
  • Our increase in health expenditure as a share of GDP was 21.4% above the average for the group of countries. It was 107% (more than double) above the average in relation to our GNP.
  • A large number of countries - marked in bold red - to my knowledge offer superior health services to their citizens compared to Ireland while spending less, sometimes vastly less, public resources on healthcare provision. This statement does not take into account that many of these countries have much older population than Ireland.
  • Have the FF/PD Governments been any worse (or better) than other Governments in financing health expenditure increases (or dumping good money after bad, if you want)? I don't know - the data above cannot tell me quality differentials or efficiency of spend. But what I can tell is that until 200 we were spending less than the group average on health. In 2007 we were spending above the average (based on GNP).
The problem, of course, is that we cannot perfectly measure the output we get for the money we spend on public health. Alas, somehow, I know that any foreigner living in this country runs for the airport the minute they get sick, desperately trying to avoid HSE's kingdom. French, Italians, Germans, Belgians, Spaniards, Czechs, Dutch - you name a country within the EU - all have been dreading the need to face our 'centres of excellence' where medical staff needs to be reminded to wash their hands and lines of sick patients stretch the length of the lines to the infamous Lenin's Tomb's in the hey days of the CPSU.

It looks like, according to hard data, this adverse reaction is not due to the lack of cash in the health system...

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