Israel Health Profile 2012

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. The health plans must provide their members with access to a benefi ts package that is specifi ed within the NHI Law (Gross 2003). The system is fi nanced 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.
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. 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-profi t-making and profi tmaking organizations.
The Ministry of Finance has multiple points of signifi cant infl uence over Israeli health care, which it uses to try to contain health care spending, improve the services and increase the effi ciency 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).

Health care financing
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 benefi ts 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. The NHI system is fi nanced 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 refl ects the number of members in each plan and their age mix. Cost sharing for pharmaceuticals, physician visits and certain diagnostic tests also plays a role in fi nancing the NHI system.
Services outside the NHI system are fi nanced 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 fi nancing has declined to 64% of total health system fi nancing, while the share of private fi nancing, especially VHI and co-payments, has increased to 36%.
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. Salaries constitute the primary component of compensation for most hospital 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 signifi cant role in the compensation of many community-based specialists.

Physical and human resources
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). 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. 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.
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 expanding academic frameworks for the training of nurses, encouraging more young people to enrol in nursing programmes, and developing programmes for professionals in other fi elds to retrain as nurses.
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 licences and approximately half of the RNs have received advanced specialist training.

Provision of care
Critical components of the Israeli health system include a sophisticated public health effort run by the Ministry of Health, high-level primary care services provided by the health plans throughout the country, and 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. 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.
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.
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 (particularly for the indigent) and support for a system of Ministry of Health community mental health clinics. Dental care is fi nanced predominantly from private sources, although some publicly funded services are available for people with low incomes. Utilization of complementary and alternative health care is increasing, both within the publicly funded health care system and alongside it. 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 universal health care coverage, a relatively young population, good access to high-level primary care services throughout the country, and the development of a national health care system that is predominantly publicly fi nanced and government regulated, combined with the existence of competition among providers.
Important challenges remain. These include the lack of public insurance through the NHI system for dental care, long-term care and mental health care; a growing reliance on private fi nancing sources; and disparities among population subgroups. In addition, the unique health needs of the economically disadvantaged, Ethiopian immigrants and Israel’s Arab minority population pose a continuing challenge to the health care system.

Israel's high standards of health services, top-quality medical resources and research, modern hospital facilities and an impressive ratio of physicians and specialists to population are reflected in the country's low infant mortality rate (5.4 per 1,000 live births) and long life expectancy (80.9 years for women, 76.7 for men). Health care for all, from infancy to old age, is ensured by law and the national expenditure on health compares favorably with that of other developed countries.