Health Care Sector Uncertainty In Israel

With the introduction at New Year of Israel's National Health Insurance Law, there is an unprecedented degree of uncertainty at all levels and sectors in health care, reports the Marketletter's Jerusalem correspondent. Although many elements of the reform have not been settled, the government felt obliged to push ahead without delay, mainly because of the serious financial state of the General Sick Fund. The reform will ensure that a greater share of revenues go to the GSF at the expense of the fast-expanding smaller funds.

In talks with the Histadrut and employers over a new economic package, the government has proposed that employees forego some cost-of-living indexation in return for a cut in the health tax from 4.8% of salary to 3.4%. overall, the general feeling is that people will pay more for less health care, and various sectors are beginning to realize that the NHIL will have an unpleasant impact on them.

The Association of Hospital Directors and the Israeli Medical Association oppose the Ministry of Health's decision to change the modus operandi of hospitals. The MoH's plan, to change the prices of medical procedures to reduce income, is based on a clause in the GSF recovery plan which says growth in the "profit" of government-owned hospitals from the provision of services to GSF members will be restricted to a 2% per annum real increase during 1995-96. Health Minister Ephraim Sneh has also said that in 1995 he plans to allow hospitals to introduce private medical services to ensure additional income.