‘State lacks strategic goals for nation’s health’

Eighteen years after the National Health Insurance Law went into effect, the government lacks direction the comptroller clearly implies.

By JUDY SIEGEL-ITZKOVICH
State Comptroller Shapira hands Edelstein report 370 (photo credit: Courtesy of Knesset)
State Comptroller Shapira hands Edelstein report 370
(photo credit: Courtesy of Knesset)
The State Comptroller’s 70 well-written and powerful pages on the Health Ministry do not uncover problems that had never before been raised by numerous public committees and experts’ and journalists’ reports. But when read in one sitting, they make it clear that the Health and Finance Ministries – and the government as a whole – have in the last two decades lacked any unified strategy for the health system over the next two. Eighteen years after the National Health Insurance Law went into effect, the government lacks direction and single-minded goals for the health of the nation, the comptroller clearly implies.
The growing privatization of medical services at the expense of public medicine; the Health Ministry’s serious conflict of interest of owning and running state hospitals and supervising healthcare nationwide; private healthcare in public hospitals; its handing over of huge sums to private interests to build and run a public hospital with private medical care in Ashdod; and the shortage of adequate numbers of doctors and nurses are major systemic issues in this report. The chapter is unusual in that it goes deeply into broad issues instead of just highlighting individual “fires” in the health system that have to be extinguished and infrastructure rehabilitated.
“The government is carrying out contradictory policies rather than one coherent one,” stated Prof. Dov Chernichovsky, a veteran health economist who at the Taub Center for Social Policy Studies in Jerusalem in phoned-in comments from South America for The Jerusalem Post. Since the 1990s’ major examination of the health system by retired justice Shoshana Netanyahu and other national commission members, “great changes have occurred in demographics, economics, social matters, immigration, medical technology, life expectancy and public expectations. But the government hasn’t done anything for long-term planning and assessment.” Chernichovsky disclosed that in such a vacuum, his non-profit center has brought together a team of experts in the field that over the next four months will voluntarily prepare recommendations on where to go in the future. Working under his chairmanship, the other members include veteran health systems expert Prof. Mordechai Shani, medical administrator Dr. Meir Oren, former Bank of Israel deputy governor Prof. Zvi Eckstein and Dr. Rachel Kaye of Maccabi Healthcare Services.
“The State Comptroller presents a bleak picture of the privatization of the Israeli healthcare system,” commented Prof. Gabi Bin-Nun, a senior health economist at Ben-Gurion University of the Negev who previously worked for decades as a Health Ministry deputy director-general and health economist. “The report sharpens the implications of this development on the nature of equity and solidarity [with the poor and disadvantaged] of the health system, but the chapter’s main contribution is to present the negative effects of the expansion of the supply of private services on the system’s efficacy.” This means the drain of medical manpower to private workplaces, pressures for price increases, incentives for excess activity, choice of easier cases in private medical institutions, unfair competition opposite government hospitals not permitted to offer private care and their resulting decline in surgical activities, Bin-Nun told The Post.
“An additional interesting finding clear from the report is that the state is largely responsible for these developments by making decisions in the last decade. The state refuses to build more public hospital beds, but at the same time it allowed health funds to run private hospitals. It closed its eyes to – and thus encouraged – the development of supplementary health insurance, since their income replaced the costs of the four public health funds in the basic basket of health services. The state eroded the funding of the health funds from public finance, ignoring the High Court of Justice ruling on the matter, and forces the insurers to find other sources of funding via supplementary health insurance policies.” Bin-Nun added that since 2000, anyone who wants to take advantage of their supplementary health policies – held by 73 percent of the population – must go to private medical institutions, thus creating an economist interest in the health funds to send patients there. The public/private hospital now being built in Ashdod by Assuta Medical Centers – with most paid for by the Treasury – “is an example of the shortsightedness of the state that, on the one hand opposes private health services in the public hospitals and on the other hand allows the Ashdod hospital to provide them as a quarter of its activities.” The health system is at a point “that requires bold and integrative new thinking,” Bin-Nun concluded. “The steps proposed by the Treasury in the Arrangements Bill would do nothing to change the direction in which the system is heading.
The existing incentives giving preference to private medicine over public medicine must be changed completely. At the same time, the flow of private medical insurance must be reduced and money for the basket of health services provided by the health funds must be increased.”
IN THE first section on private medical services, the comptroller notes that the ministry has very little data on what and how many services – mostly elective surgery – are provided by the 11 private hospitals around the country.”Thus the rate of activity of the private system cannot be compared with the public system,” he writes. Going to a private hospital for surgery enables patients to choose their own surgeon – usually doctors who work mornings in the public hospitals and moonlight in the afternoons and evenings). But the comptroller’s calculations produced facts – that there was a 22 percent rise in private hospital activity between 2005 and 2010 compared to only 14% growth in public hospitals during that period. The comptroller suggests that the time may have come to prohibit patients in private hospitals from being able to choose their surgeon or consultant.
Unlike most other OECD countries, the public health expenditures are static at only 7.5% of the GDP and out-of-pocket expenditures by the individual are growing, while elsewhere the trends are going in the opposite direction.
It wasn’t only the rise in the standard of living that increased the demand for surgery in private hospitals; it was also the government decision that supplementary health insurance money collected by the health funds can be spent only in private hospitals and not government or Clalit-owned ones. All the patients have to do is add a relatively small co-payment.This, in turn, has induced the public health insurers to encourage their members to undergo non-emergency operations in private hospitals so they would save money that would otherwise be spent in the public system. Clalit holds 40% of the shares of the private Herzliya Medical Center, while Maccabi Health Services owns 95% of Assuta Medical Centers. Kupat Holim Meuhedet owns Jerusalem’s Misgav Ladach, which is no longer an obstetrical/gynecological hospital but only performs minor surgery and performs all kinds of scans and tests.
The comptroller stated that only Kupat Holim Meuhedet, among the four health funds, has a supervisory mechanism to ensure that its members do not undergo unnecessary surgery in private hospitals at the hands of surgeons who are eager to get their business. While the comptroller says he doesn’t want to “stain” all surgeons with the charge that they perform superfluous surgery, but merely pointed to the problem that there is too little supervision.
The fact that there are so many more private hospitals than before and so much more surgical “business” in them than a few years ago have created a worrisome and even dangerous trend: Numerous department heads and other senior physicians in public hospitals have sought and received permission to reduce their workloads in the public sphere so they can work more profitably in private hospitals. But the comptroller disclosed that as the public hospitals teach medical students, the shortage of full-time senior clinical there placed the teaching and the medical students in jeopardy. With the amount of operations in public hospitals declining, the comptroller continued, public health resources are wasted.
Another conflict of interest is posed by the public/private dichotomy: Public hospital doctors may examine a patient, send him for tests and then tell him that if he wants him to do the surgery – and quickly – he could easily do it in the private hospital where he moonlights. The unfortunate patient who lacks supplementary health insurance from his health fund or coverage from a private health insurance company is deprived and has to wait. By examining records, the comptroller found many cases in which surgery in private hospitals swiftly followed the same patient’s visit to the same physician in a public hospital clinic.
The comptroller welcomed the change, which the Treasury insisted upon, that since the end of the long public doctors’ strike in the summer of 2011, all physicians in public hospitals have to punch a time clock (or use another digital method) when they arrive and leave. Thus, managers can know when they come and go for their public work or leave early to do private jobs.
Seven public-but-not-governmental or health-fund-owned hospitals – the capital’s two Hadassah University Medical Centers, Shaare Zedek Medical Center and Bikur Cholim (now absorbed by Shaare Zedek), Bnei Brak’s Ma’ayanei Hayeshua Hospital and Netanya’s Laniado – have for decades been permitted to offer Sharap (private medical service consultation, treatment and surgery). the fees are collected by the hospital administration and distributed among the physicians at a set rate. This arrangement keeps the hospital doctors on the campuses for many hours instead of sending them to private clinics in mid-afternoon, and the hospital’s facilities are not wasted. However, while Sharap has long been very popular among those who can afford to pay for it, the system has to be carefully supervised to prevent abuses – such as a surgeon promising a public patient that he can jump the queue and get quick care if he goes Sharap. The senior doctors must not be allowed to take on too many private patients or favor them at the expense of patients who can’t afford to pay.
The comptroller says the ministry does not adequately supervised legal Sharap. The system, he continues, could easily lead to the best surgeons performing simple operations because he is paid for it – giving him less time for treating public patients – and not because he is the only surgeon capable of doing it.
With 73% of Israelis paying their health funds monthly premiums for supplementary health insurance coverage, the sale of additional health insurance by private companies means that many people are insured doubly for the same thing, the comptroller says. This artificially increased national health expenditure without any improvement in people’s health. Private companies even encourage their customers who need treatment to do so under their supplementary health insurance policies, the comptroller continues, so they can save money and increase profits.
MEDICAL TOURISM and whether treating foreigners in public and private hospitals comes at the expense of Israelis is another vital issue raised in the report. The shifting of dwindling numbers of medical personnel to the care of outsiders may also harm the Israeli public, but the ministry has not examined the problem and set down rules. The ministry replied that it is now doing so.
THE GROWING population in the city of Ashdod and its environs will in a number of years have a new hospital. But it is not a government hospital; construction is being largely funded – to the tune of nearly half a billion shekels – by the government, while Assuta Medical Centers will run it and be permitted to provide Sharap in up to a quarter of its medical services. Originally, the Health Ministry was completely opposed to the building of a hospital in Ashdod, as top officials urged instead that Clalit’s Kaplan Medical Center in Rehovot and the government’s Barzilai Medical Center in Ashkelon could be expanded to take better care of Ashdod-area residents.
But Russian-immigrant politicians in the Knesset, and then haredi MKs lobbied by the growing ultra-Orthodox population in Ashdod, put on tremendous pressure. Lawsuits were even filed. In the end, the government agreed to the establishment of a hospital there, and a public tender was issued. But there was only one bidder – Assuta – and it demanded and received major concessions from the Treasury. While the Finance Ministry has long opposed private medical services because they “increase health expenditures,” sometimes unnecessarily, at the same time it was giving Assuta almost carte blancheto make 25% of its activities private – even though the original law passed by the Knesset to establish the hospital did not include Sharap.
Kaplan and Barzilai, as well as some Health Ministry officials, fear that once the Assuta Hospital is opened, many of their own doctors and other medical personnel will run to Ashdod to work there and enjoy Sharap income. In its plans approving the Ashdod hospital, the Health Ministry did not study its possible harmful effects on the two nearby public hospitals, the comptroller states.
IN THE comptroller’s list of recommendations, he notes that some private medicine is good because it puts public medical institutions on their toes because of the competition. The private hospitals are usually more efficient, have more luxurious “hotel services,” treat patients with more respect, privacy and courtesy and enable patients to choose their own doctor (surgeon or consultant). But as they continue to expand and grow, the principle of equity for all Israeli residents as set down by the National Health Insurance Law of 1994 is compromised. With a serious shortage of high-quality doctors and nurses in many fields and the periphery of the country, the “escape” of many to better-paying jobs in private hospitals endangers patients. Efforts must be made, the comptroller urges, to make the public hospital system more competitive.
In addition, the drain of supplementary health insurance premiums solely to private hospitals should be reconsidered, he said. The ministry must start to supervise and collect more data from the private system, as from the Sharap system. The decision making regarding the Ashdod hospital was not preceded by rigorous and careful thinking. If the Treasury changed its mind about its policies, it should have prepared amendments to the law.
And finally, there is too much concentration of power and resources within the four public health funds, three of which (not Kupat Holim Leumit) own private hospitals. It’s also impossible and immoral (due to conflict of interest) for the Health Ministry to continue to supervise the healthcare system while owning and running a large chunk of it. The Health and Finance Ministries, the comptroller says, must get together to assess the National Health Insurance Law and the many new developments that have occurred in Israeli society since its passage in 1994 and consider changes that better suit the times.
Above all, public medicine must reign supreme so the health of the disadvantaged does not suffer. “There is justification for a public debate on all of these issues, even at the level of the government and the Knesset, and even to consider setting of a public committee that can study these recommendations in depth


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Joseph Shapira