Israeli NHIL Cash Flow Deficit

Israel's Health Minister, Ephraim Sneh, has asked the Treasury for interim financing of NIS782 million ($264.8 million) until the collection of revenues is sorted out. This is not a problem arising from the National health Insurance Law itself, he stressed, but from collection problems at the National Health Insurance Institute, which have manifested themselves as a cash flow deficit which will be corrected by year-end.

However, after only a few months of the NHIL's existence, some commentators, including those in the government, note that the system is in deficit by about NIS1.3 million ($440.3 million). And another minister warned recently that national expenditure on health care will jump within two years from under 8% of Gross Domestic Product to 10%.

Part of the problem reflects the long-term trend of reduced government financing of the system. Israel now has the highest private funding, at 28%, by commercial bodies and from out-of-pocket expenses of all Organization for Economic Cooperation and Development countries, except the USA. The system is also still reeling from the effects of generous pay rises in the public sector, particularly to doctors in the hospital sector and in spite of the huge oversupply of doctors. This is the main reason for the rise of 70% since 1992 in per capita expenditure of the sick funds.