¹The Economic and Social Research Institute, 4 Burlington Road, Dublin 4, Ireland. E-mail: brian.nolan@esri.ie

Abstract

In Ireland, the public health system has a symbiotic relationship with private health insurance not seen in other European countries. Everyone has entitlement to public hospital care from the state, but half the population now pay for private health insurance. The insured avail of "private" health care, much of it delivered in public hospitals, and the resulting two-tier system is problematic from both an efficiency and an equity perspective. This paper uses the Irish case to explore the dynamics of the interaction between public and private health care and their impact on the demand for health insurance and on equity. It brings out how a structure designed to take advantage of possible benefits for the public system of close interaction with private care can be both destabilizing for the public system and inequitable in terms of access and utilization.