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Jewish Journal

Israel Has Rx for U.S. Health Care

by Mordechai Shani

August 19, 2004 | 8:00 pm

Israel and the United States each have successes and failures in their respective health care systems, but the younger of the modern nations, rooted in its tradition of helping the needy, has much to teach its American ally. When it comes to some of the most important issues facing the American health care system today -- universal health care, administrative costs and establishing a national health basket of services -- America can look to Israel.

Until 1995, health insurance in Israel was voluntary, although 99 percent of the Jewish population and 97 percent of the Arab population were covered by four HMOs, the first of which was established at the end of 1911. This was a system wherein the insured members paid the HMO, and the employer made a compulsory payment to the National Insurance Institute.

Today in Israel, everyone is covered by health insurance. In 1994, the Israeli parliament passed a groundbreaking health insurance bill that made every Israeli resident automatically insured, no matter their age, financial status or religion. In the United States today, more than 43 million people, including 12 million children, are uninsured.

Israel's universal health care is characterized by its "national health care basket," which defines the range of services to which every resident is equally entitled. Residents can petition a labor court if they believe an HMO has ignored their rights to a medical service.

Universal access to Israel's national health care basket means that there is no underinsurance in Israel, which happens when there are gaps in coverage. In the United States, more than 100 million citizens are underinsured -- including 40 million with Medicare, 50 million with Medicaid and at least 10 million who are employed in large companies that have self-insurance.

The main health care delivery system for all Israelis is through primary and secondary clinics. These clinics, which are present throughout the country, provide easy and efficient access to care.

The clinics that belong to the HMOs enable quick access to primary medical care and also easy referral to specialists without waiting lists. There is continuity of care, while there is now a tremendous effort to computerize all the medical data.

Ninety-five percent of general care hospitals in Israel are public. There is no wait for diagnostic examinations such as MRI and CT or for procedures such as open-heart surgery. Payment for hospitalization is the responsibility of the HMO, and there is no deductible or co-insurance payment required of the patient.

There is a $3 co-payment for each prescription on the approved drug list covering acute and chronic diseases.

High unemployment and the Israeli economic recession make it difficult for about 10 percent of the population to pay even this, even though there is a $50 biannual co-payment cap.

Caring for the elderly is a core social policy and an integral part of health care in Israel. While in the United States geriatric care is handled by Medicare, in Israel it is part of the health basket and is the responsibility of the HMOs.

Only hospitalization in nursing homes is the responsibility of the Ministry of Health for those who cannot afford to pay for private insurance or from their own means. Geriatric care, being an integral part of health care in Israel, is of high quality.

I do hope that one of the Israeli government's priorities in an improved economic situation will be to reflect the nation's social values by exempting the poorest 5-10 percent of the population from drug co-payments.

Israel's health indicators for longevity and infant mortality are better than those of the United States. This aspect is not unique to Israel, but many Western countries are better in the various indicators of health than the United States. Yet while Israel spends 8.8 percent of its Gross National Product on caring for the elderly, the United States spends 15 percent of its GNP.

In international comparisons of health care systems, Israel ranks among the top 20 in the world. But, even with its favorable standing, Israel faces many challenges, such as the financial limitations of introducing new technologies and prescription drugs to the health basket and the high taxes Israelis pay. Also of concern are high out-of-pocket expenses for cost sharing and for health care services that are covered only by complementary insurance.

Israel's health care system, while based on the core value of access for all, is still evolving. The establishment of a "health parliament," a private initiative endorsed by the government, enabled input from ordinary Israelis to help set priorities for the future, including the challenges of limited resources and the growing gap between rich and poor.

Obviously, Israel and the United States differ vastly in size, making full comparisons limited. But with the exception of four large states, Israel is similar in size to most U.S. states. The American health system can be improved only if states take responsibility for health care, or, in the case of the four largest states, if there is regional responsibility within the state.

In 2003, the United States spent at least 30 percent of its national health expenditures on administration, while Israel spent less than 10 percent. The United States could have saved at least $280 billion of the $400 billion spent in administrative expenditures in 2003 to cover the uninsured and to close the gap of the underinsured, strengthening the democratic principles it holds dear.

Professor Mordechai Shani is the director general of Sheba Medical Center at Tel Hashomer, Israel's largest hospital. He served twice as director general of the Ministry of Health, including 1994, when the Insurance Bill and the Patients Bill of Rights were passed by the Knesset.

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