|For-profit Sick Fund|
|Implemented in this survey?|
Under proposed Ministry of Finance legislation (2004), a for-profit organization would be allowed to operate a new health plan under the terms of the National Health Insurance Law, but with reduced funding, in order to increase competition in the health plan market. When the Labour Party joined the coalition (January 2005), this legislation became contingent on re-approval by the new cabinet members. Given the current composition of the coalition, it is unlikely to be approved.
|Medienpräsenz||sehr gering||sehr hoch|
Innovation: The proposed policy is innovative, since to date, the health plans in Israel have been not-for-profit organizations; this was anchored in the NHI Law.
Controversy: The proposed policy has been presented only recently, and not very vocally; there has not been much public debate about it, but as noticed above, the Labor party opposed the policy and stopped the legislative process. The Ministry of Finance still supports the policy, while the private insurance company that apparently initiated the idea is now less enthusiastic to promote it.
If the legislation will pass at a future time it will impact the status quo, but the extent is as yet unclear, since it is too early to foresee how the system would react. The impact on the status quo will depend on several parameters, such as rate of transfer to the new health plan and how it would operate (cream skimming, etc.). It is yet unclear whether the new health plan would in fact induce more competition and, consequently, change the other health plans' strategies and behavior.
Visibility: Low. The media hasn't exposed the idea or the controversy around it.
Transferability: Apparently high, to other systems with not-for-profit health plans.
|Implemented in this survey?|
Labor Party: The Labor Party recently entered the policy arena regarding this issue, and actively opposed the policy. It is rumoured that the Labour Party made joining the
coalition (January 2005), conditional upon removal of the proposal from the 2005 Budget Reconciliation Bill. It demanded that the policy be discussed by the cabinet and re-approved, in effect
stopping the legislative process and postponing its consideration indefinitely. The 2005 budget and Budget Reconciliation Bill are expected to be approved by the Knesset by the end of March; if not,
the government may fall. If a new, for-profit health plan were to be is approved, it would only be included in next year's budget bill. The current cabinet, (without the
liberal Shinui Party and with the Labor and religious parties), which has a socially-oriented platform, is likely to reject the proposal.
It is not clear which of the actors had lobbied to include this issue in coalition negotiations to make this proposal a necessary part of coalition negotiations. However, the main reason for forestalling this legislation appears to be the Labor Party's concern that the formation of an additional health plan would lead to latent cream skimming, and thereby endanger equity. In addition, the Labor Party is still ideologically identified with Clalit Health Services, and may also have delayed legislation to support the interests of Clalit: If a new health plan were to succeed in cream skimming, it could make a profit at the expense of the other health plans.
Ministry of Finance: This ministry initiated the proposal and still supports it, believing it will give all of the health plans an incentive to operate more efficiently,, and thus reduce overall expenditures. Therefore they do not support the postponement of the legislation process. However, once the issue became political, the ministry could no longer do anything to promote it.
Ministry of Health: Private communication reveals that some of the officials in this ministry still support the proposal (believing in the advantages of privatisation and increased competition). However, most ministry professionals still oppose it, because it might compromise the equity of the system: If the new health plan were to offer services in affluent urban areas only, for example (thereby instituting a subtle form of cream-skimming), it might in time politically or otherwise create pressure to change the health plans' terms of operation, freeing itself to become "the health plan of the rich". Concern also remains about the technical ability to regulate a for-profit health plan. The Ministry of Health therefore welcomes the delay, and hopes the new cabinet will reject this proposal.
Health plans: The health plans have yet to express public support or opposition to the idea. However, a survey recently conducted by the Myers-JDC-Brookdale Institute revealed that 75% of the top directors in the health care system opposed the idea of a new health plan. . This corroborates private communication with health plan and Ministry of Health officials, who expressed concern that a new health plan could easily select members (cream skim) by providing services in chosen areas, and/or by offering additional benefits that would attract mainly young and healthy members, who more readily transfer among health plans. If the new health plan indeed succeeded in cream skimming, it would make a profit while the other health plans would encounter financial difficulties. Although the health plans are still keeping a low profile, they, too, apparently welcome the removal of this proposal from the Budget Reconciliation Bill.
Insurance companies: As previously reported, it was apparently one of the leading insurance companies that initiated the idea, believing that it would ultimately be able to persuade the Ministry of Finance to change the health plans' operating conditions (e.g., allow them to operate in selected cities only), such that a new for-profit health plan could become profitable. In the meantime, it became clear to private sector entrepreneurs that the Ministry of Finance has no intention of "bending the rules" regulating the activities of the health plans as delineated by the National Health Insurance Law. This made the initiative less economically viable; as a result, pressure on the legislation process was stopped.
The Israeli Medical Association: The IMA is opposed to the policy, and therefore also supports the delay in legislation. It has expressed concern about the future of public medicine, cream skimming, equity, quality of care, and an increase in health expenditures. Informally, the IMA has also expressed concern that health plan efforts to cut costs would result in layoffs of employees or reductions in their wages.
Patient organizations: These are opposed to the policy, and therefore support the delay in legislation. They feel the addition of a new health plan to the system would induce competition not over quality of services, but over reducing the costs of operation. Thus a for-profit health plan may offer lower quality of care (e.g., longer waiting times, less choice) and restrictions on access to medical care which, they believe, would be the only way it could be profitable. They have also expressed concern that a for-profit health plan would find latent ways to cream skim patients, thereby compromising equity.
The public: Advocacy groups have opposed the policy, and therefore support the delay in legislation. The Adva Institute, which advocates for equity, has vehemently opposed the proposal. It claims it is based on a neo-liberal ideology that undermines the principles of public medicine. Furthermore, given the known market failures in health care markets, privatization will only lead to increased costs and greater inequity (as in the US system). They also raised concern that a new, for-profit health plan would strive to select the young and healthy in order to make a profit, thereby negatively affecting the membership mix of the other health plans.
|Ministry of Health||sehr unterstützend||stark dagegen|
|Ministry of finance||sehr unterstützend||stark dagegen|
|Health Plans||sehr unterstützend||stark dagegen|
|Zvi||sehr unterstützend||stark dagegen|
|Adva||sehr unterstützend||stark dagegen|
|Privatwirtschaft, privater Sektor|
|Insurance companies||sehr unterstützend||stark dagegen|
|Israel medical association||sehr unterstützend||stark dagegen|
|Labor Party||sehr unterstützend||stark dagegen|
Labor Party: The Labor Party has actively opposed the policy, and stopped the legislative process. It made the proposal's removals from the 2005 Budget Reconciliation Bill a condition of its joining the coalition. It demanded that the idea be discussed by the cabinet and re-approved, and this in fact has delayed legislation indefinitely. The 2005 budget and Budget Reconciliation Bill were approved by the Knesset at the end of March, with out this item. Therefore, if the idea of a new, for-profit health plan were approved, it could only be included in next year's budget bill. The new cabinet (without the liberal Shinui Party and with the Labor and religious parties), with its social orientation, is likely to reject the proposal.
|Ministry of Health||sehr groß||kein|
|Ministry of finance||sehr groß||kein|
|Health Plans||sehr groß||kein|
|Privatwirtschaft, privater Sektor|
|Insurance companies||sehr groß||kein|
|Israel medical association||sehr groß||kein|
|Labor Party||sehr groß||kein|
The policy was not implemented. Legislation postponed indefinitely.
|Qualität||kaum Einfluss||starker Einfluss|
|Gerechtigkeit||System weniger gerecht||System gerechter|
|Kosteneffizienz||sehr gering||sehr hoch|
No change from previous report.
Personal communication officials in Ministry of Health and Ministry of Finance.
|For-profit Sick Fund|
Process Stages: Gesetzgebung
Authors: Revital Gross Alec Aviram Reviewer: Gabi Ben Nun