Healthcare: US can learn from Israel

US pays 18 percent of GDP; Israel: 8 percent.

By
July 11, 2010 02:55
Washington rally opposing healthcare reform

Healthcare 311. (photo credit: David Rogowski/MCT)

Israelis often feel a sense of inferiority when comparing their country with the big, rich and powerful US, from which our prime ministers yearn to get invitations to the Oval Office. Thus it is refreshing to hear that our health insurance system is more humane, comprehensive, equitable, accessible and efficient than America’s.

Still, while American health care experts say their country has a lot to learn from Israel’s 16-year-old system, their Israeli counterparts nevertheless insist there are things that we can learn from the US, which only recently has passed a health care reform bill but which will begin implementation next year.

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A recently survey by the nonprofit Commonwealth Fund compared the US system with those in Canada, Germany, Australia, Holland, the United Kingdom and New Zealand. All of these countries, like Israel (which was not included), have universal health insurance for all residents. Despite paying almost double (17.5 percent of its gross domestic product, compared to 8% in Israel) for medical care, the US ranks below the rest in access for its whole population. The survey found that half of all American adults suffering from chronic illness do without recommended tests, treatments or follow- up care. Americans are most likely to get the wrong dose of medication or the wrong medication than the others and to go unnecessarily to a hospital emergency department for something that their primary care physician or specialist in a community clinic could have done. Health spending per US resident has gone beyond $7,500 a year, compared to $3,000 in the UK and $3,350 in Australia.

Nevertheless, some 46 million US residents – or 15% of its population – have no health insurance; if they are desperately sick, the only alternative is to go to a hospital emergency room that can’t turn them away, but the queue can still be very long, and some people have died waiting.

Even before the reform, those 65 and older (and some younger ones with specific medical disabilities) can obtain federally provided Medicare coverage and many people on welfare under that age can get Medicaid. Medicare was pushed through Congress and signed into law 45 years ago by president Lyndon Johnson; Medicaid is a meanstested program for eligible individuals and families with low incomes that is jointly funded by the state and federal governments and is managed by the states.

Israel’s National Health Insurance Law was passed in 1994 and implemented on January 1, 1995 with relative ease. The vast majority of Israelis had been voluntary members of one of the four public health funds, some of which were tied to political parties and all of which determined their own baskets of services. But some would-be members were rejected for health, political, sociodemographic or other reasons. Upon implementation of the 1994 law, all legal residents (not only citizens) were entitled to join the insurer or their choice and get a universal basket of services (to which the health funds could voluntarily add to make them more competitive).

Jerusalem’s Myers-JDC-Brookdale Institute (headed by Prof. Jack Habib) and its Smokler Center for Health Policy Research (directed by Dr. Bruce Rosen) recently held a symposium on American Health Care Reform, with lectures by members of its American board of advisers and Israeli experts. It’s a shame that President Barack Obama – who pushed through his brand of reform – wasn’t on hand to listen.

IT BEGAN with an overview by Prof. Stuart Altman, an expert in national health policy at Brandeis University’s Heller School for Social Policy and Management. He noted that the 2,500-page new law offered coverage to a larger number of Americans but did not deal with health care costs. Having so many uninsured for so many years “has not been something to be proud of,” said Altman.

He noted that health insurance in the US (beyond Medicare and Medicaid) depends on whether you work and if your employer offers a decent private health insurance policy as part of the benefits. “The insurance companies have had a lot of flexibility and fairly few rules.

Some decided whom they would insure according to their health status and could decide to cover people only for certain medical conditions. But the new reform makes this illegal, and every American must have insurance.”

In Israel, Altman said, there is managed care with supervision of the health funds by the government (the Health and Finance ministries).

Around half of all American adults even today are opposed to Obama’s reform and would repeal it if they could, he declared. “It has been so hard to make changes because most Americans are very nervous about losing what they have,” especially the large mass of graying Baby Boomers through Medicare. The uninsured in America are most likely minorities and recent immigrants, “not your average person,” said Altman. “Many of them are not entitled to vote, while those who do vote and have coverage don’t want changes that would negatively affect them. They don’t want a major expansion of government activity. They regard it as the hated ‘socialized medicine.’ Americans rejected the simple payer system through government.”

The Obama bill gave coverage to uninsured adult children from 18 up to 26 whose parents have their own health insurance. Until now, insurance companies have usually dropped this age group from their parents’ coverage, especially if they don’t live at home, but the relatively high unemployment rate for recent high school and college graduates meant that many went without health insurance. Now, the parents’ employers – who will be entitled to tax benefits – will have to share the added costs with the parents.

Altman said that according to the best estimates, “Medicare spending will be cut by $500 billion over the next decade, while new spending for the newly insured will increase costs by $828 billion. We believe the reform will raise expenditures by $300 billion over 10 years, but that is only one percent of US health care spending.”

The US reform paid little attention to the delivery system of health care, he continued. “Now there is a free for service, so the more a doctor does, the more he gets paid. The value of their work is not assessed. Even if you keep your patient out of the hospital by making him healthy or healthier at home, you don’t get paid more for it,” he said.

By comparison, Israel’s hospital capitation system helps discourage overuse of hospitals, and managed care helps keep down unnecessary costs, but increasingly Israelis have to pay more out of pocket for services that used to be free.

Larry Lewin, another visitor from the US who in 1970 founded the Lewin Group, a leading US health care consulting firm, said: “Every time I come here, I see how much we can learn from you. This exchange is very valuable. We in the US won’t be able to do what you’ve accomplished with your four public health funds. There is a lot of antigovernment feeling in the US. Ironically, people say they want the government to keep its hands off Medicare – but Medicare is the government’s! The reform has aspirations, but it won’t do it all, especially in delivery systems and promotion of wellness. The US military is way ahead of the rest of the system in preventing disease.”

“Israelis are much more willing to sacrifice for their country than Americans,” noted Dr. Jonathan Javitt, CEO of Telcare, which uses technology to help the chronically ill to control their diseases. “I think the US will never have a defined health basket like that in Israel.

But it also won’t limit health services according to age, as in the UK. Somehow, costs have to be controlled, But not every American likes to be limited on the medications he can get from his insurance company or to be told where he can go for care.”

The Washington, D.C.-area physician said that Israel is also way ahead of the US in computerized health records and much behind America’s defensive medicine and malpractice lawsuits.

“We have juries” that decide if a patient who says he has been harmed is right, he said. “Patients can win a lot of money. The new law doesn’t deal with health care lawsuits. Trial lawyers are big donors to Obama’s Democratic Party, so the issue was not part of the agenda. You in Israel are lucky you have figured out how to do this right.”

“The US law was a lot of hype for very little change except expansion of those insured,’ said University of Michigan pediatrician Prof. Gary Freed. “More people get access, but this is a false god. More important is whether there is too much or too little utilization of services.

Children who are covered often get too little care.

About 20% don’t use the stuff they have insurance for.

The new law has no significant cost containment or mechanisms dealing with utilization. It will not reduce health spending below 17.5% of GDP but only slow growth. At the same time, if we reduce expenditures, a million Americans could lose their jobs.”

In 1950, the US had the same number of children as it does today, but then they constituted 30% of the population and now only 22%, said Freed. “This means the proportion of spending on children will be less. Medicaid is regarded as spending for children, but today, most of that money goes for adults – disabled and for seniors in nursing homes. So we will add 20 million more adults to Medicaid, but less money will go to the kids.”

BUT ISRAEL’S new Health Ministry director-general, Dr.

Ronni Gamzu, who came specially to attend the symposium, had some compliments for the US system, at least as a model for what not to do. “We can learn from it things to adopt and things not to adopt. It has to be regulated with strong managed care; it can’t be left to the private market, which is much less efficient. We can learn not to have overutilization of services. Today, Israel is beginning to have too much health insurance – not only the public system but also private insurance. The private sector should not be allowed to grow uncontrollably; it must be regulated more closely.”

The US system “is very innovative in costing and pricing,” said Gamzu. “By comparison, we do this in a very primitive way. And the US now has a budget for making change. We do not have this. Israel has a very good health system. The whole world envies us for our four health funds’ managed care. And the level of our medical staff” is very high.

Managerial skills in the US are excellent, said Prof.

David Chinitz of the Hebrew University-Hadassah Braun School of Public Health and Community Medicine, and lower in Israel. But these have improved since 1995, and the feeling of solidarity with the less privileged has not been hurt. Fortunately, politicians were largely uninvolved in our 1994 reform. The level of trust in government is much higher than in the US, he said.

One country cannot copy another’s health system, noted Dr. Rachelle Kaye, a long-time senior official of Israel’s second-largest health fund, Maccabi Health Care Services. “Reform must be consistent with a society’s culture and values.” The US will have a problem in controlling costs, as “what drives prices up there is not more visits to the primary physician but more hospitalization days. This wasn’t dealt with in the reform. And the US has not done a great job in setting up a system of nationwide electronic health records. The US could learn from us and from European systems if it were willing. More there has to be done from bottom up. More incentives are needed at the local level.”

“With all the money Americans spend on health care, the health of its citizens is not improving,” said Prof.

Gabi Bin-Nun, a Ben-Gurion University health economist and former Health Ministry chief economist who helped plan Israel’s national health insurance system.

“Infant mortality is relatively high and life expectancy low. America has to decide to cut its administrative costs, which today are a per-capita annual average of $699.

They need to computerize health records, reduce unnecessary defensive medicine and Medicaid payments to hospitals and insurers. All the prices are huge. Americans have to cut choice. Reimbursement systems should reward higher quality and lower costs. Central control of money flow is needed there.”

It’s unlikely the US system will turn in the direction of the Israeli system, even though it has proven very successful, concluded Brookdale’s Habib. “But lots of things are happening in both systems, and we can analyze and learn from them. Israel has constant experimentation and change in its system, and we can all learn together.”


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