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The Day After Project Overview of the Healthcare System – Civil Services and Government Policy

עודכן: 14 באוג׳

Yoni Ben Bassat 

 

Supervision: Amit Ben-Tzur 

Hebrew editing: Daphna Lev 

English translation: Dr. Carly Golodets 

Design: Adi Ramot 

December 2023 


The project was written in response to the revealed weaknesses of the government and public services during the October 7 War. 

 

 

Israel’s healthcare system has made impressive achievements in preventing death and improving life expectancy, but studies attribute these achievements to previous investments (Chernichovsky, 2018). Today, the public system suffers from three main problems: a. a budget shortfall estimated at 20–40 billion ILS per year; b. severe shortages of labor, including doctors and nurses; c. an excessively high private expenditure burden. All of these endanger the ability of this system to maintain high performance in the coming years. 

 

For the healthcare system to maintain its achievements in the future, the following steps should be taken: 

  1. Increase the proportion of public expenditure on healthcare through a fundamental change in the cost update mechanism for the healthcare services basket, to ensure funding sources for the basket and reduce the incentives that motivate the public to use private health services. 

  2. Increase the number of doctors and nurses per thousand residents and close the concomitant disparity between the center and the periphery. 

  3. Increase public expenditure on healthcare and create a clear distinction between the services provided through the national basket and the services provided by private agencies. 

 


How Are These Long-term Disparities Expressed? 

  1. Jews live longer than Arabs 


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  1. Residents in the center of the country live longer than those in the periphery


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  2. The infant mortality rate of non-Jews is approximately 177% higher than the infant mortality rate of Jews 


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  3. The waiting time for medical services is significantly longer in the periphery than in the center 


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  4. Some of the Israeli population is forced to forgo a medical service due to the required payment 


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The Three Main Problems 

National healthcare basket budget deficit: approximately 20–40 billion ILS are lacking 

The implementation of the National Health Insurance Law in 1995 led to significant cumulative attrition of the healthcare services basket budget. Our analysis, based on an assessment of the difference in civil expenditure between Israel and the OECD average, indicates that the required supplement for the healthcare system is approximately 27 billion ILS. 


 

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A detailed analysis by the Taub Center noted that in 2020 the cost of the healthcare services basket was approximately 56.7 billion ILS. If the basket had grown in accordance with the index updates recommended by professional committees and experts in the healthcare system, this cost would have been approximately 76–96 billion ILS per year in 2020 (Levi, Ben Nun and Davidovitch, 2022). In other words, an additional 20–40 billion ILS. 



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What needs to be done?  

Increase the proportion of public expenditure on healthcare through: 

  1. A fundamental change in the cost update mechanism for the healthcare services basket, at both the principle (updating method) and quantitative (size of the coefficients) levels. 

  1. Legally fix the demographic and technological coefficients to ensure funding sources for the basket. 

  1. Reduce the incentive motivating the public to use private healthcare services, including private insurance. 

Healthcare labor shortages 

The healthcare labor shortage is one of the main challenges facing the healthcare system in the coming years (Ash et al, 2023). In order for Israel to reach the 2021 OECD average, approximately 3,000 more doctors (Figure 8) and 34,000 more nurses (Figure 9) are needed. Similarly, in the health and nursing sectors, the proportion of older professionals is relatively high; thus, in the coming years the challenge of filling the ranks will be even greater (Levi and Davidovitch, 2022), particularly in light of the expected decrease in the number of doctors by 2035 (Ash et al, 2023). 



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Moreover, there is a significant disparity in the geographic distribution of doctors and nurses in Israel (Levi and Davidovitch, 2022). To ensure that the northern and southern districts reach the OECD average, an additional 900 doctors and approximately 5700 nurses are needed for these districts. 



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What needs to be done? 

  1. Gradually increase the number of doctors and nurses per thousand patients in the multi-year plan to close the disparity with the OECD. 

  1. Gradually close the disparity in the number of doctors and nurses per thousand patients between the geographic center and the periphery in the multi-year plan. 

The individual healthcare expenditure burden in Israel is exceptionally high 

In 2022, public healthcare expenditure contributed 69% to total national healthcare expenditure, while the OECD average was 79%. In other words, the amount that Israel’s citizens personally spend on healthcare services is significantly higher than what their colleagues in OECD countries spend. If Israel’s expenditure breakdown in 2022 had been similar to that of the OECD, the total national healthcare expenditure would not have changed (would have neither increased nor decreased), public expenditure would have increased by approximately 13 billion ILS and private expenditure would have decreased (by the same amount). This disparity indicates that Israel’s healthcare system is highly privatized. 



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What needs to be done? 

  1. Gradually increase public healthcare expenditure to reduce the inequality stemming from the high proportion of private expenditure in comparison to the OECD. 

  1. Create a clear separation between services provided through the national basket and services provided by private agencies (Ash et al, 2023). 


References 

  • Ash, N, Ridnik, R, Mizrachi, H, Heiman, N, Prizet, S, Barmeli Greenberg, S, Marzen, G, Michal, S, Ben-Tzur, A, Nihaya, S, Niv Yagoda, A, Chaim, A, and Rivlin, R (2023) The committee for empowering healthcare services and regulation of the public and private healthcare system. Ministry of Health. [Hebrew] 

  • Chernichovsky, D (2018). Healthcare in Israel – an overview. In: A Weiss (Ed.), State of the Nation Report: Society, Economy and Policy (pp. 203-217). Taub Center for Social Policy Study in Israel. 

 



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