Reform of the health care service system in Israel 1995-2000

In January, 1995, a national health insurance law was enacted which allowed for the registration of every resident with one of the four public health funds. These funds provide medical services directly to their insured members, or purchase them from public or private hospitals or other health service providers. A basket of medical services was defined which guaranteed readily available comprehensive health care throughout the country. As part of the reform, a number of personal participation charges were established: a nominal fee for medications, and a service charge for a limited number of medical services (visits to specialist doctors, periodic fee for mother and child clinics, participation in the cost of chronic nursing hospitalization). In spite of the Government's commitment to finance the basket of services, the budget is not sufficient to cover costs, and there is an inherent shortfall deliberately introduced into the system by the Ministry of Finance. Since the introduction of the Law the sources for financing the basket of services have been eroded by 16%. Complementary health insurance programs are being developed by the health funds as well as by private insurance companies. The national expenditure on health is some 8.4% of GDP, with an average annual expenditure of $1,384 per person. 72% of health expenditures are public and 28% private. Life expectancy is continually rising, and stood at 75.9 years for men and 80.1 years for women in 1999. Infant mortality is decreasing: in 1996 the rate was 6.3 per 1,000 live births. There is an ever increasing use of new technologies, even though at the same time there seems to be somewhat of a decrease in customer satisfaction. The achievements of the reform are considerable, but there is need for improvement in the areas of budgeting, return of the employer parallel tax, and in other areas if these achievements are not to be undone.