Israel's Health Care Outpaces U.S.

Provides Universal Coverage and Better Outcomes, Experts Say

getty images/kurt hoffman

By Nathan Guttman and Nathan Jeffay

Published June 28, 2012, issue of July 06, 2012.

The heated debate over health care reform, reignited by the Supreme Court’s decision to uphold President Barack Obama’s plan, has drawn attention, once again, to the issue of government involvement in health care management and the effectiveness of a system based on universal coverage.

For Israel, this is a Rubicon crossed long ago. Despite the country’s mania for most things American, when it comes to health care, Israel chose a system based more on the European model. The government’s role is central as both funder and regulator. Yet, going by many indexes of health outcomes, the result in terms of quality of care is often better — and definitely cheaper than in the U.S. Under the Israeli system, the percentage of the country’s gross domestic product going to health care is less than half that of the United States. And coverage is universal.

kurt hoffman

Stephen Reingold has observed both systems from up close. He is a pediatrician who practiced medicine in New Jersey before moving to Israel in 2009, where he now sees patients in Modi’in.

“One of the first things I noticed in the emergency room was that we only got severe cases,” Reingold recalled of the time he spent at an Israeli children’s hospital. The reason, he later learned, was that “hey, people here have a doctor to go to” and therefore do not end up in the hospital for minor problems, even if they are poor.

Access to doctors on a regular basis is one of the advantages that the universal health care system offers in Israel. It is commonly referred to as a “socialist” health care system, as opposed to the “private” system in the United States, but as a 2010 study comparing the two approaches demonstrated, these descriptions do not reflect their true nature, since both Israel and the United States have a mix of private and public health care.

One example of this hybrid system is Laniado Hospital, in Netanya. It isn’t state-run — even though most Israeli hospitals are — but rather a fiercely independent not-for-profit institution with a strong identity and a proud history. But there is one major difference from the United States: Doctors never need to worry about bills.

“I have to accept every examination the doctors ask for, and I don’t have a say if the doctors recommend giving the patients a very expensive medicine — which is good,” medical director Avinoam Skolnik said.

Health care provision in Israel is made through not-for-profit health maintenance organizations. Six months after the Jewish state was established, in 1948, just 53% of the population had HMO insurance. Israel steadily increased its financial contribution to HMOs, making membership more affordable, and in 1973 it obliged employers to pay contributions toward employees’ policies.

But HMOs were still free to turn away people who they regarded as too high-risk, so in 1995, when 4% of the population was uninsured, the government made coverage universal by passing the National Health Insurance Law. It meant that everybody had the right — and obligation — to be covered by one of the country’s four not-for-profit HMOs. Residents of the country pay from income-related contributions collected through the tax system, which cover around 40% of HMOs’ costs. The state pays the remaining 60%.

People are allowed to choose which HMO to join and are allowed to change once a year, but the differences are mostly superficial: By law they are obliged to provide a standardized “basket” of services and medicines, from emergency to preventative. Except for some consultations and tests for which the patient makes a contribution to the cost — usually less than $10 — HMOs transfer funds to clinics, health centers and hospitals to cover all services. There are only a handful of completely private hospitals.

In America, by contrast, the burden of health care insurance costs falls entirely on individuals or their workplace, except for individuals covered by Medicare, Medicaid, the Children’s Health Insurance Program and veterans’ programs, all of which are government funded. The breadth and quality of coverage Americans get for their money is highly variable depending on the plan, compared with Israel’s government-mandated standardized packages.

Proponents of America’s system often tout the virtues of competition for keeping costs low and quality high. Yet the cost to Israelis for their health care is significantly lower than that in the United States.

Israel spends slightly less than 8% of its GDP to achieve universal health care coverage, compared with 17.4% of the GDP in America for a system that leaves more than 40 million residents — one out of every eight residents — uninsured.

Moreover, under many criteria, Israeli citizens appear to be getting better care for their lower expenditures. Israel has an infant mortality rate that is only 57% of that in the United States, and a life expectancy from birth of 82 years, compared with 78 years in the United States. Its mortality rate due to heart disease is only half that of America’s. Many other indicators having to do with specific diseases are similarly favorable or, at worst, roughly equal.

“I think that America can learn a lot from the Israeli system. The quality is high, and the outcomes are good,” said Orly Manor, dean of the Hadassah-Hebrew University Braun School of Public Health.

Studies and doctors do point out that Israel lacks the specialists and care centers for rare and complicated diseases. In many cases, this requires patients to travel abroad for treatment. The expenses for some, but not all, of these treatments will be covered by the HMOs.

Furthermore, Haifa University public health lecturer Itzhak Zaidise said, there is a widespread feeling that the medical infrastructure, as distinct from the care, is “lousy.” More beds and staff are needed urgently, he said. Zaidise believes that even after additional expenditures to address this, the Israeli system would still be far more cost-effective than that in the United States. With just an extra 1% of the GDP, the Israeli health system could “solve all the problems,” he said.

The Israeli system is also not immune to charges of inequality. The HMOs offer an extra tier of insurance for those who can pay, which typically costs about $50 a month for a family of four. It’s a premium purchased by all but 20% of the population, these being mostly the poorest.

People with supplementary insurance are allowed to select their doctor for certain consultations and have access to extra afternoon and evening clinics that others do not. They thereby tend to secure appointments more quickly, and some of the best-regarded doctors become so in demand by those with supplementary insurance that others find it hard to see them. Supplementary insurance also provides access to some medicines not included in the health basket.

“My concern is that we are moving towards a two-tier system that will determine access to health based on how much you can pay,” said Ono Academic College researcher Amir Paz-Fuchs, one of Israel’s leading scholars on inequality. Paz-Fuchs is the former head of the Center for the Rights of the Unemployed.

Ehud Kokia, director general of Hadassah Medical Organization, which runs some of Israel’s largest and most prestigious hospitals, also sees trouble ahead. “The system is underfunded, and the only way to fix it is by having the government add more money,” he said. Health care funding needs to fight for its place on the government agenda against other urgent needs such as security and defense, he said.

Stav Shaffir, one of the leaders of Israel’s social protest movement, said one of the protest movement’s demands in this summer’s demonstrations is that “we get our health care system back.” She stated that otherwise, they are “afraid that the Israeli system of health care will become the American system.”

Contact Nathan Jeffay at jeffay@forward.com or contact Nathan Guttman at guttman@forward.com



Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.