Knesset Committee compromises on health funding formula

The formula stipulates a ceiling for the health funds’ purchase of hospital services.

RambamHospital_210513_A (photo credit: Rambam Hospital)
(photo credit: Rambam Hospital)
The Knesset Finance Committee approved the capitation formula in which the health funds and public hospitals settle their financial compensation for patient care.
The formula, approved Thursday, is responsible for making possible the financial sustainability of medical institutions and is meant to balance the needs of the four public health funds with those of the hospitals.
Capitation reduces incentives for medical centers to keep patients hospitalized unnecessarily, as well as the power of the insurers over policy-holders who need hospital care. It also forces the medical centers to bring their prices down.
Finance Committee chairman MK Nissan Slomiansky (Bayit Yehudi) said all sides were heard. “Our aim was to reach the most balanced formula so that no side would be the loser,” he said.
The Treasury’s deputy budget director Moshe Bar Siman-Tov said: “We didn’t want to hurt anyone. The health and finance ministers still have the option of making changes in a certain health fund or hospital in a specific city... although this power is limited to parameters such as the number of beds the hospital has.”
The formula stipulates a ceiling for the health funds’ purchase of hospital services.
First, the amount of financial activity by a health fund in the hospital is checked, based on its full cost; then, the actual amount of the health fund’s payment to hospitals is calculated.
In 2013, health funds will pay full price for 95 percent of the services they purchased in 2012. For services purchased in 2013 constituting 95-102% of those purchased in 2012, the health fund will receive a 30% discount in payments to the hospital. Between 102% and 113%, there will be a 33% discount. The maximum a health fund will pay is 65%.
If the health fund does not purchase a minimum of services (95% of the actual purchase of services in 2012), it will have to pay a fine to the hospital to enable it to reach the 2012 rate. The figures will be calculated taking the number of each health fund’s members into consideration, the two ministers said.