The OECD has recently been conducting a project intended to identify the differences in hospital prices among its member countries, in an effort to better explain the gaps in health expenditure in the different countries.
The OECD collected the prices for 32 medical procedures from most of the member states, and evaluated the relative price levels of the different countries. The initial results show that the price levels in Israeli hospitals are 17% lower than the OECD average. The attached diagram shows Israel’s relative positioning relative to the organization’s member states.
This study enables the creation of an index of Purchasing Power Parity, adjusted to the health system costs. Whereas the hospital costs in Israel are lower than the average in OECD countries, the index of Purchasing Power Parity, which evaluates the general price levels in Israel, is above average among OECD member states.
The OECD checked the impact of the price levels within the health systems on the health expenditure in terms of Purchasing Power Parity. Investigation of the data concerning Israel indicates that in spite of the relatively low pricing levels, the per capita national health expenditure is substantially lower than in most other member states.
In his response to the findings, Prof. Roni Gamzu, Director General of the Ministry of Health, stated that “the price levels in Israeli hospitals are testimony to the efficiency of in the health system. This is an indication of the strength of the public health system in Israel, which succeeds, through relatively low expenditure, in being among the OECD’s leading countries in terms of the state of its public health. I do not believe we will be able to make further progress in optimizing our price levels. Emphasis should now shift toward the DRG system of reimbursements, where in Israel this system is relatively underutilized compared with the west. I believe that by continuing our transition toward the DRG we will continue to improve the efficiency of the health system in Israel.”