Ministry report on health funds misses alleged corruption

State comptroller had released a lengthy report accusing Meuhedet of wrongdoing; Health Ministry found no problems.

By JUDY SIEGEL-ITZKOVICH
A Health Ministry financial report on the four health funds for 2009, released for publication on Sunday, fails to uncover any wrongdoing by Kupat Holim Meuhedet, even though the state comptroller last week issued a 286- page report full of allegations against the third-largest public health insurer.
The report was prepared by the ministry’s branch for supervision of the health funds and the private accounting company Hillman and Partners. It notes that “for the fifth year in a row,” Meuhedet had a balanced budget.
The comptroller said in his report that Meuhedet made significant profits by paying freelance contractors to induce tens of thousands of haredim to switch from other health funds to Meuhedet by giving them gifts; haredim are regarded as “desirable” members because they are young, have large families and are largely unaware of expensive treatments to which they are entitled.
The health funds are compensated for their expenditures with per-capita distribution of health taxes by the National Insurance Institute, thus having more members whose medical care is relatively cheap is important.
The comptroller’s report also accused senior Meuhedet administrators of establishing contacts with supplier companies owned by their relatives; allowing its chief pharmacist to run his private pharmacy with health fund staffers; and sending staffers and themselves on luxury vacations abroad.
Last week, the director of the ministry division, lawyer Dr. Yoel Lipschitz, said he was hired to be a “guard dog” but not to detect criminal acts by health fund administrators.
Maccabi Health Services (the second-largest fund), Kupat Holim Leumit (the smallest) and Meuhedet all finished 2009 without a deficit; Meuhedet ended up with a surplus of NIS 400,000, but Clalit Health Services had a deficit of NIS 165 million (less than half its 2008 deficit). Clalit has failed to balance its books since 2004.
Capitation rules will next year increase the income of health funds such as Clalit that have more elderly members and reduce the income of those with fewer elderly such as Meuhedet and Maccabi.
The health funds spent an average of 43 percent of their NIS 31 billion income last year on hospitalization, 25% on paying salaries and 17.7% on purchasing medications.
Health fund members paid NIS 1.728b. on copayments for their medications.
In 2009, Clalit membership declined from 53.3% of the population to 52.9%; Maccabi increased from 24.1% to 24.4%; Meuhedet from 13.2% to 13.4%; and Leumit declined from 9.4% to 9.3%. But Clalit gets more in health taxes because it has more members with serious diseases that are expensive to treat.
Clalit and Maccabi spent a bit less on each member in 2009 compared to 2008, while Meuhedet and Leumit spent a bit more. All the health funds spent about NIS 4,100 on each member.