Clalit Health Services, the country's largest health fund, is referring many fewer patients to government-owned general hospitals for inpatient and outpatient services, causing the medical centers to lose considerable income that has to be made up by the Treasury, according to a report issued Wednesday by the Health Ministry. The report was prepared under the supervision of the Ministry's outgoing accountant Eran Horn and covers the years 2000 to 2006. A professional team produced the report on the basis of financial data presented by government hospital accountants. The process is aimed at producing comparative data and noting trends in the government hospital system. Clalit purchases 56 percent of services from the state-owned hospitals, with the three other health funds (Maccabi Health Services, Kupat Holim Meuhedet and Kupat Holim Leumit) responsible for the other 44%. According to the report, over the past six years, there has been a steady decline in the number of referrals of Clalit members to state hospitals, with the health fund diagnosing and treating more patients in their own facilities (Clalit hospitals and community clinics) at usually cheaper rates. There has also been a significant and continuing increase in the amount of discounts that state hospitals have to give the health funds because they are bound by "capping" restrictions and global agreements. The discounts from all the state hospitals totaled NIS 552 million in 2006 compared to only NIS 440m. in 2005, or 10% of income in 2006 compared to 8.2% the previous year. As a result, the operating deficits of the government hospitals increased to a total of NIS 379 million in 2006, compared to NIS 198 million the previous year. Only Sheba Medical Center at Tel Hashomer and Sourasky Medical Center in Tel Aviv reported that they had no deficit. State subsidies to government hospitals totaled 3.5% of their income in 2006 compared to 0.4% in 2005, the report said. In addition, the report showed that expenses for medical negligence in the state hospitals is growing; the total figure reached NIS 135m., compared to only NIS 60m. in 2003.