| The Health Care System in Israel:
An Historical Perspective
The Ministry of Health is responsible for the development of health policy, operation of the nation’s public health services and management of the governmental health care budget. The government also owns and operates many of the nation’s larger hospitals. It licenses the medical and paramedical professions and initiates and oversees implementation of all health-related legislation passed by the Knesset. Medical services are provided through four health insurance companies, known as sick funds: Kupat Holim Clalit, Kupat Holim Maccabi, Kupat Holim Meuhedet and Kupat Holim Leumit. Kupat Holim Clalit (General Sick Fund), the largest organization and the first health insurance institution, was founded in 1911 by a small group of agricultural workers and taken over by the Histadrut (General Federation of Labor) in 1920.
Since the establishment of the State of Israel in 1948, the issue of health care has never left the public agenda. The public debate on reform of the health system has focused on enactment of a national health insurance law. Reform was spurred by recommendations of the Natanyahu Commission (1990). Its recommendations served as a catalyst for the passage of the National Health Insurance Law which came into effect on January 1, 1995.
The present review traces some of the milestones in health care services, in order to better understand the roots of both the achievements and the problems of the system, and to define future prospects.
Health Care Services in the Early Years of the State
On May 14, 1948, the State of Israel was established. Government ministries were organized; a Ministry of Health replaced the Mandatory Department of Health; and regional health bureaus and an epidemiological service were formed. The state extended its responsibility for health services, by taking over existing hospital facilities inherited from the Mandatory authorities; by building and operating hospitals; and by establishing mother-and-child health care services. At the same time, an IDF Medical Corps was formed to serve the Israel Defense Forces. Kupat Holim Clalit also enlarged its hospitals and expanded its network of clinics, in the wake of an October 1948 government decision to share in the cost of hospital beds, which increased Kupat Holim Clalit’s budget by 20%.
At the end of 1948, only 53% of the Jewish population were insured, with the majority – some 80% – insured by Kupat Holim Clalit, the remainder by several smaller sick funds. During the following two years, the population of the state of Israel doubled to 1.2 million people due to the mass immigration of Holocaust survivors from Europe and Jewish refugees from Arab countries. Within a decade, the population reached 2.1 million. The percentage of those insured increased dramatically during those years, to an estimated 90%. Both the Ministry of Health and Kupat Holim Clalit expanded their medical facilities to cope with the increasing demand for health services.
In 1953 all military hospital facilities were transferred to the Ministry of Health to enhance financial and management efficiency, and the ministry become the major provider of hospitalization services. Kupat Holim Clalit also took steps to expand its services – building more hospitals and community clinics. Smaller sick funds tried to follow Kupat Holim Clalit’s example and compete, by opening more clinics. In order to finance their growth, the sick funds demanded an increase in government financing.
The Health Care System
Israel has today a population of nearly six million people – 81% Jews and 19% non-Jews, mostly Arabs. The majority of the population is urban and Israel is rated among middle-income countries. Some 8.7% of Israel’s GNP is allocated to health (1995), similar to levels among Western European countries. Average life expectancy is relatively high: 79.5 years for females and 75.5 years for males.
Forty-seven general hospitals presently operate in the country, with a total of some 13,000 general beds. Forty-five percent of the beds in general hospitals are in hospitals operated by the government and municipal government; 30% are in hospitals run by Kupat Holim Clalit; 6% in two hospitals belonging to the Hadassah Medical Organization; and the rest (19%) are in hospitals run by non-profit organizations and religious organizations (such as the Christian churches in Nazareth). The health system also includes some 14,000 beds for chronic care patients (including geriatrics) and some 7000 for psychiatric patients. The ratio of all hospital beds to population is 5.95 per thousand.
The health system has over 2000 community-oriented primary care clinics throughout the country, operated by the sick funds, the Ministry of Health or the municipalities. There are some 26,000 physicians in Israel, most of whom are salaried employees of hospitals and sick funds. The ratio of physicians to 1000 persons is 4.6, one of the highest levels in the world. One of the factors contributing to the high number of physicians is the recent mass immigration from the Soviet Union.
The Ministry of Health operates a successful community health service: a nation-wide public network of 850 mother-and-child-care centers, which offers low-cost easily-accessible services. About 460 centers are run directly by the Ministry of Health; others are operated by municipalities or the sick funds, with the financial support of the Ministry of Health. The services provided include health education programs, regular checkups to monitor child development and a comprehensive immunization program (newborn to 5 years). Ninety-five percent of all babies and children are immunized – a proportion higher than that in western Europe. The inoculation system has changed over the years, with the changing incidence of diseases; some diseases, such as diphtheria and polio, have completely disappeared. The nation’s comprehensive immunization program is a major factor contributing to the low infant mortality rate – approximately 6.3 per 1000 live births.
Israel has four medical schools, each affiliated with a major university. They are the Hebrew University Medical School associated with the Hadassah Medical Organization; the Tel Aviv University Medical School; the Technion Medical School in Haifa and the Ben-Gurion University Medical School in Be’er Sheva. The Ben-Gurion Medical School, affiliated with Kupat Holim Clalit, runs a special program in community-oriented medical education with an emphasis on specialization for family physicians. In addition to medical schools, there are two schools of dentistry, one of pharmacology and some 20 nursing schools, four of which also grant academic degrees, in the country. Courses for physiotherapists, occupational therapists and nutritionists, as well as for x-ray and laboratory technicians, are available at a number of institutions.
Sophisticated technology has become an integral part of modern diagnostic procedures in Israel. Close cooperation between medical research institutions and industry has led to significant progress in the development of special medical equipment. Among others, Israel’s CAT labs and advanced microcomputer-supported devices, essential for accurate diagnosis and effective treatment in critical situations, are exported worldwide. Israel has pioneered the development and use of laser surgical instruments, as well as a variety of electronic medical equipment, including computerized monitoring systems and other life-saving and pain-relieving devices.
National Health Insurance
Even though health insurance was not mandatory in Israel until 1995, 96% of the population were insured before the National Health Insurance Law came into effect. Two factors have played a major role in the maintenance of a high level of coverage among the population: Membership dues were graduated by income and based on family status, and availability of services was founded on need, not ability to pay. Moreover, the government passed a health insurance bill in 1973 requiring every employer to pay a health tax designed to finance a portion of his/her employees’ health insurance premiums; employers’ participation constitutes approximately 30% of total national expenditures for health. From a sociological point of view, the employers’ health tax, together with the sick funds’ graduated payment scheme, endowed most Israelis with a sense of quality, equity and security in heath matters.
Still, the health insurance system suffered from a series of severe problems – mostly budgetary – that heavily influenced and weakened its ability to function as a national health care system, leading to protracted conflicts and frequent crises in the past decade and a half. The continual improvement of medical procedures, which are consequently more expensive, has accelerated these budgetary problems.
On January 1, 1995, the National Health Insurance Law went into effect. The law sets forth the state’s responsibility to provide health services for all residents of the country (not including tourists.) The law stipulates that a standardized basket of medical services, including hospitalization, will continue to be supplied by the sick funds. Sources for funding of health costs include progressive health insurance premiums paid by each resident, employers’ health tax payments, National Insurance Institute funds, funds from the Ministry of Health budget and consumer participation payments. The insurance premiums are collected by the National Insurance Institute.
The law provides that:
Every resident must register as a member with one of the four sick funds.
The sick funds may not bar applicants on any grounds, including age and state of health.
Equal status is accorded to all four sick funds.
Health care services covered by the law include:
- Medical diagnosis and treatment
- Preventive medicine and health education
- Hospitalization (general, maternity, psychiatric and chronic)
- Surgery and transplants. If medical treatment is not available in Israel, treatment abroad will be covered.
- Preventive dental care for children
- First aid and transportation to a hospital or clinic
- Medical services at the workplace
- Medical treatment for drug abuse and alcoholism
- Medical equipment and appliances
- Obstetrics and fertility treatment
- Treatment of injuries caused by violence
- Medication, in accordance with an order issued by the Ministry of Health
- Treatment of chronic diseases
- Paramedical services (physical therapy, occupational therapy, etc.)
Despite the law’s budgetary problems, it is clear that it has accomplished what it set out to do: provide a basket of basic health services to all residents of the country.
Toward the Future
As certain infectious diseases are eradicated, and infant mortality drops, new diseases emerge. The most publicized, of course, is AIDS. Israel has recently seen a drop in the incidence of AIDS, from 0.96 per 100,000 in 1990 to 0.47 per 100,000 in 1996, largely due to education.