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Prepared by:

Iyad Ibrahim Shaqura

Supervised by:

Dr. Radwan Baroud

School of Public Health 2013-2014

Israeli Health care System

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Introduction

Organizational Structure

Health care Financing and Expenditure

Physical and Human Resources

Provision of care

Health care Reforms

Summary

Highlights:

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Geography and socio-demography

Economic context

Political context

Health status

1. Introduction

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The State of Israel was established in 1948; it is a

democratic state with a parliamentary, multi-party

system. It is a small country at the eastern end of the

Mediterranean Sea.

At the end of 2007, it had an estimated population of

7.2 million, of whom 76% were Jewish and 17%

were Muslim Arabs, with other minority groups

including Christians (3%) and Druze (2%)

(Central Bureau of Statistics, 2008a).

Population density is among the highest in the

Western world.

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Israel is a relatively young society; 28% of the

population are under 15 years old and only 10%

are over 64 years. Its total fertility rate (2.88 per

woman) is higher than most developed

countries.

Immigration has played a critical role in the

demographics of Israel. The period 1990–2000

saw the arrival of almost 1 million new

immigrants, the vast majority of whom arrived

from Former Soviet Union (FSU) countries.

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Throughout the country’s history, armed conflict with

neighboring Arab countries and large-scale immigration have

resulted in heavy burdens on the Israeli economy,

creating the need for loans and extensive foreign

support.

Despite these challenges, Israel is a developed, industrialized

country with a substantial high-tech sector, a growing service

sector and a small, technologically advanced agricultural

sector. The 2005 GDP per capita income (with purchasing

power parity (PPP)) was US$ PPP 26 054, similar to that of

New Zealand, Spain and Italy.

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In 2006, life expectancy at birth was 78.5

years for males and 82.2 for females (CBS,

2007).

Life expectancy for Israeli males is among the

highest for OECD countries and that for

women is in the lower range.

The infant mortality rate in 2006 was 3.9

per 1000 live births (CBS, 2007); it has

declined by 38% over the previous 10 years.

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Overview of the health care system

Historical background

Organizational overview

Decentralization and centralization

Patient empowerment

2. Organizational structure

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Israel has an NHI system that provides for

universal coverage. Every citizen or permanent

resident of Israel is free to choose from among four

competing, nonprofit-making health plans (Clalit

53%, Maccabi 24%, Meuhedet 13% & Leumit

10%).

The health plans must provide their members with

access to a benefits package that is specified within

the NHI Law (Gross 2003).

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The system is financed primarily through

taxation linked to income (through a

combination of earmarked taxes and

general revenue).

The Government distributes the NHI funds

among the health plans according to a

capitation formula which takes into

account the number of members within

each plan and their age mix.

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The Ministry of Health has overall responsibility

for the health of the population and the effective

functioning of the health care system.

In recent years, the Ministry has developed strong

capabilities in the areas of : health technology

assessment (HTA), the prioritization of new

technologies, health plan regulation, quality

monitoring for community-based care, and strategic

planning to set goals for population health,

along with strategies for achieving them.

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In addition to its regulatory, planning and

policy-making roles, the Ministry of Health

also owns and operates about half of the

nation’s acute care hospital beds.

The largest health plan operates another

third of the beds, and the remainder are

operated by means of a mix of non-profit-

making and profit-making organizations.

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The Ministry of Finance has multiple points of significant

influence over Israeli health care, which it uses to try to

contain health care spending, improve the services

and increase the efficiency of the system.

The largest health plan, Clalit, has a market share of 53%. It

provides community-based services, primarily via salaried

physicians working in clinics that it owns and operates.

The next largest plan, Maccabi, has a market share of 24%

and provides care primarily through a network of

independent physicians (IPs).

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Although the Ministry of Health’s Public Health

Division operates through regional and district

offices, which have some leeway in responding to

local conditions, the ultimate source of

authority is the national office.

The regional and district offices serve primarily:

to implement the policies and strategies

developed at the national level, both in the

public health field and in terms of the regulation

of long-term and psychiatric care.

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Overview

Health expenditure

Population coverage and basis for

entitlement

Revenue collection/sources of funds

Pooling of funds

Purchasing and purchaser–provider relations

Payment mechanisms

3. Health care financing and expenditure

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Health care accounts for approximately 8% of GDP.

Hospitals and public clinics each account for

approximately 40% of national health expenditure, and

dental care accounts for a further 10%.

There is universal coverage of the population via an NHI

system, providing access to a broad benefits package

including physician services, hospitalization,

medication and so on.

Long-term care services and psychiatric services are

currently not included within the NHI but some public

funds are available for partial coverage of these services

through other mechanisms.

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The NHI system is financed primarily from public

sources – a mixed system of payroll tax and

general tax revenue.

These public funds are distributed among the health

plans according to a capitation formula that, as

mentioned earlier, primarily reflects: 1- the number

of members in each plan and 2- their age mix.

Cost sharing for: pharmaceuticals, physician visits

and certain diagnostic tests also plays a role in

financing the NHI system.

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Services outside the NHI system are financed via

voluntary health insurance (VHI) and direct out-

of-pocket payments for private sector services.

There are two forms of VHI available in Israel:

supplementary VHI, offered by the health plans;

and commercial VHI, offered by commercial

insurance companies.

In recent years, the share of public financing has

declined to 64% of total health system financing,

while the share of private financing, especially

VHI and co-payments, has increased to 36%.

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Hospital revenue derives primarily from the

sale of services, with approximately 80%

coming from the sale of services to health

plans.

Currently, the reimbursement of public

hospitals in Israel takes the form of fee-for-

service payments, per diem fees and case

payments, and is subject to a revenue cap.

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Salaries constitute the primary component of

compensation for most hospitals and health plan

physicians, and salaried physicians were recently

granted a 25% wage increase by an arbitrator brought

in to resolve an impasse in collective bargaining

between the Israel Medical Association (IMA) and the

country’s major employers.

Capitation payments are an important form of

compensation for primary care physicians in some

of the health plans, and fee-for-service payments

play a significant role in the compensation of many

community-based specialists.

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Physical resources

Human resources

4. Physical and human resources

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In comparison with the OECD, Israel is

parsimonious when it comes to many of

the physical and workforce inputs to health

care.

For example, the Israeli supply of acute

care beds per 1000 population is just over

half of the OECD

average (2.1 and 3.9, respectively).

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While the supply of physicians is relatively abundant

(3.5 per 1000 and 3.1 per 1000 population, in

the OECD and Israel, respectively) at the time of

writing, the number of physicians in Israel is growing

much more slowly than in other countries, and a

physician shortage is being projected.

Until recently, the Israeli physician supply relied

heavily on physicians trained in other countries

– primarily immigrants from the FSU and eastern

Europe.

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However, as the massive immigration of the

early 1990s dramatically decreased the FSU’s

reservoir of potential Jewish immigrants

departing for Israel, that source is now

drying up.

To address the projected shortage, Israel is in

the process of expanding its four existing

medical schools and is considering

opening an additional medical school.

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Israel has far fewer nurses per 1000 population than

the OECD average (5.8 and 9.6, respectively) and

is facing a considerable – and growing – nursing

shortage (in part due to the drop-off in

immigration from the FSU).

Efforts to address this shortage include: 1-

expanding academic frameworks for the training of

nurses, 2-encouraging more young people to enroll in

nursing programmes, and 3- developing programmes

for professionals in other fields to retrain as nurses.

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Israeli nurses are increasingly well

trained.

In 2006, Registered Nurses (RNs)

constituted 74% of the total, up from 58%

in 1995.

RNs now account for almost 90% of new

licenses and approximately half of the RNs

have received advanced specialist training.

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Critical components of the Israeli health system

include: 1- a sophisticated public health effort run

by the Ministry of Health, 2- high-level primary

care services provided by the health plans

throughout the country, and 3- highly sophisticated

hospital care.

Israel also has a strong system of emergency care

delivery that was developed to address its needs both in

times of peace and in times of war or terrorism.

5. Provision of care

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Israelis have access to a secure, safe and

stable supply of pharmaceuticals at

reasonable prices, due in part to

governmental regulation and the roles

of hospitals and health plans as the

principal and bulk purchasers.

Israel also has an extensive and

successful pharmaceutical industry.

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لله الحمدالذي

شفانا وعافانا

ابتلى ا مم]كثيرا به

خلقه، منلنا وفّض]

كثير علىعباده من

تفّضيال

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The system of health and welfare services for the

elderly with disabilities in Israel has developed

enormously since the mid-1980s, particularly with

regard to home care and other community services.

The passage of the Community Long-term Care

Insurance Law in 1986 contributed greatly to

the development of these services.

In recent years, palliative care services are also

becoming increasingly available.

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Rehabilitation services are provided within the

framework of the NHI, but mental health care,

institutional long-term care and dental care are

not.

Other sources of public funding provide partial

coverage for long-term care and support for a system

of Ministry of Health community mental health clinics.

Utilization of complementary and alternative health

care is increasing, both within the publicly funded

health care system and alongside it.

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Primary care is highly accessible in

Israel.

In three of the four health plans, the

cost of primary care visits is fully covered

by NHI, and co-payments are limited to

specialist visits.

The Maccabi health plan charges a small

co-payment for primary care visits.

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The most significant reform in Israeli health

care since 1990 took place in 1995, when the

law on NHI came into effect.

Other important changes include: the

introduction of a law on patients’ rights, the

development of a system for prioritizing new

technologies, and the upgrading of the national

emergency response system.

6. Health care reforms

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Several reform efforts, such as the

initiative to transfer responsibility for

mental health care and well-baby care

from the Government to the health

plans, have not been successful at the

time of writing.

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The effort to change the legal status of the

government hospitals to independent non-profit

making trusts has also been unsuccessful, but the

government hospitals have gradually become

more independent in practice.

It should also be noted that, in addition to the

government-initiated major structural reforms, the

Israeli health system has benefited greatly from a

large number of mid-level evolutionary

changes.

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Many of these were initiated by the health

plans, hospitals, universities and other

nongovernmental actors.

In contrast to the government-initiated

reforms, which focused on: financing issues

and the issues surrounding who should

provide the services, these evolutionary

changes focused on how services would

be delivered.

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The Israeli health system provides a high

standard of care to the population as a whole,

which is particularly impressive in light of the

relatively moderate level of overall resources

allocated to health care.

Factors accounting for this strong performance

include:

1- universal health care coverage.

2- a relatively young population.

7. Summary

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3- good access to high-level primary

care services throughout the country.

4- the development of a national health

care system that is: a) predominantly

publicly financed and b) government

regulated, combined with the c)

existence of competition among

providers.

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Important challenges remain:

1- These include the lack of public insurance through

the NHI system for dental care.

2- long-term care and mental health care.

3- a growing reliance on private financing sources.

4- disparities among population subgroups.

In addition, 1- the unique health needs of the

economically disadvantaged, 2- Ethiopian immigrants

& 3- Israel’s Arab minority population pose a

continuing challenge to the health care system.

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معا وسويّــا

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