Public Health is Suffering from Neglect

Towards the National Budget Proposal for Fiscal 2013: The First of Three Adva Center Reports on Budgetary Goals and Trends

An Adva Center analysis shows that between 1997 and 2011, revenues from the health tax grew by 76 percent and revenues from the health funds by 77 percent. In contrast, the Ministry of Health budget line that finances the difference between the “cost of the basket of services” provided by the health funds in the framework of the National Health Insurance Law (“hashlamat hasal”) and health tax/ health fund revenues financing those services, grew by much less – 28%. These figures are among those included in a new Adva Center report, ” Public Health is Suffering from Neglect,” by Barbara Swirski.

Budget lines that grew even less over the past 15 years were the Ministry of Health regular budget of expenditures (not including “hashlamat hasal”), which grew by 24%, and the Ministry of Health investment budget, which suffered a 15% decrease. These figures provide part of the explanation for the shortage of beds in general hospitals (the beds are financed by the Ministry of Health investment budget) and for the long waiting list for community mental health services (community mental health clinics are financed by the Ministry of Health regular budget).

It is Israeli households that make up the shortfall.  In 1997, households paid out, on average, 3.8 percent of their monthly expenditures for health (in addition to the health tax). In 2010, this outlay increased to 5 percent. This is higher than the average outlay on health in OECD countries: 3.2 percent.

The main increase in household expenditures on health went to pay for medical insurance policies: “supplemental insurance” marketed by the health funds and commercial insurance marketed by insurance firms. In 1997, the Knesset opened the door to such expenditures, when it determined, in the Budget Arrangements Law, that the health funds could balance their budgets by selling insurance policies for non-vital health services that would supplement the basic basket of services provided under the National Health Insurance Law. Two years later, in 1999, 45.9 percent of health fund members had already purchased such policies. In 2012, this coverage was about 80%, and some 39 percent of health fund members had two extra health insurance policies: one from their health fund and another from an insurance company.

health budget table 1 english

Thus, between 1997 and 2010, the average outlay of households for supplemental insurance policies marketed by the health funds grew nearly six-fold, from NIS 23.50 to NIS 135.3 (in 2010 prices). At the same time, the average outlay of households for commercial medical insurance policies marketed by insurance companies grew more than four-fold, from NIS 17.6 to NIS 77.4 (2010 prices).

The graph below demonstrates how households filled in the budgetary gap.

health budget table 2 english

How can the above trend be changed? According to the Adva Center report, what needs to be done is to put a stop to the process of privatization in the public health system (privatization here refers to the decrease in public funding and the increase in private funding), by taking the following steps:

·         Passing a law mandating a (small) fixed annual increase in the cost of the basket of services provided by the health funds under the National Health Insurance Law;

·         Putting a stop to the marketing of supplemental health insurance policies (by the health funds) and of commercial insurance policies (by insurance companies) for health services considered vital or very important to Israeli health consumers, and making sure that all such services are part of the basket of services available to all, thanks to a small increase in the health tax;

·         Integrating mental health services, nursing care services and dental health services for children and senior citizens into the basket of services provided by the health funds to one and all.

For the Full Report in Hebrew Click Here