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בס"ד. Health Reform in Israel - A Model to be Followed by Switzerland?. Shuli Brammli-Greenberg, PhD Myers-JDC Brookdale Institute and Haifa University Israel MSD-EXPERTEN-APERO 25 OKTOBER 2012. Acknowledgment

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Health Reform in Israel - A Model to be Followed by Switzerland?

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Health reform in israel a model to be followed by switzerland

בס"ד

Health Reform in Israel -A Model to be Followed by Switzerland?

Shuli Brammli-Greenberg, PhD

Myers-JDC Brookdale Institute and Haifa University

Israel

MSD-EXPERTEN-APERO

25 OKTOBER 2012


Health reform in israel a model to be followed by switzerland

Acknowledgment

I wish to thank Ruth Waitzberg, Dr. Ephraim Shapiro and Dr. Bruce Rosen from JDC-Myers Brookdale Institute for their valuable input

Reference

All data are 2010 data unless otherwise indicated; all Swiss data are OECD health data / Commonwealth data and all Israeli data are Israeli CBS/MOH / OECD data or findings from the ongoing NHI evaluation research at Brookdale institute

Brammli-Greenberg 2012; Health Reform in Israel


Outline

Outline

  • Introduction

  • Highlights of key differences between Israeli and Swiss Systems

  • Discussion of lessons to be learned

  • The following aspects of the Israeli health care system will be covered:

    • The National Health Insurance

    • Financing and expenditures

    • Organizational structure and care delivery

    • The pharmaceutical market

    • Inequalities

Brammli-Greenberg 2012; Health Reform in Israel


Introduction

Introduction

Key Features – ISRAEL

Key Features -SWITZERLAND

GDP (Bln $US PPPs): 361.9

GDP per capita ($US PPPs): 46,480

Total population: 7.8 million

Total fertility rates: 1.5

Youth population aged less than 15: 15%

Elderly population aged 65 and over: 17.5%

  • GDP (Bln $US PPPs): 218

  • GDP per capita ($US PPPs): 28,510

  • Total population: 7.8 million

  • Total fertility rates: 3.0

  • Youth population aged less than 15: 28%

  • Elderly population aged 65 and over: 10%

Brammli-Greenberg 2012; Health Reform in Israel


Selected health outcomes

Selected Health Outcomes

ISRAEL

SWITZERLAND

Life expectancy at birth: 80 men, 84.9 women

Life expectancy at 65: 19 men, 22.5 women

Infant mortality (per 1,000): 3.8

Low birth weight (per 1,000): 6.6

Daily smokers among adults: 20%

  • Life expectancy at birth: 79.7 men, 83.6 women

  • Life expectancy at 65: 18.9 men, 21.1 women

  • Infant mortality (per 1,000): 3.7

  • Low birth weight (per 1,000): 8.1

  • Daily smokers among adults: 23%

Brammli-Greenberg 2012; Health Reform in Israel


Other israeli and swiss health systems similarities

Other Israeli and Swiss Health Systems Similarities

  • Both have a Health Insurance Law mandating universal health coverage for all; with a basic benefits package

  • Both have access to the latest technology

  • Both have relatively short waiting times for appointments and procedures

Brammli-Greenberg 2012; Health Reform in Israel


Health expenditure he indicators

Health Expenditure (HE) Indicators

Brammli-Greenberg 2012; Health Reform in Israel


Health expenditures as a share of gdp 1995 2010

Health Expenditures as a Share of GDP 1995-2010

Brammli-Greenberg 2012; Health Reform in Israel


Health expenditure he indicators1

Health Expenditure (HE) Indicators

Brammli-Greenberg 2012; Health Reform in Israel


Health expenditure he indicators2

Health Expenditure (HE) Indicators

Both Israel and Switzerland have high rates of out-of-pocket spending on dental care and long-term care

Brammli-Greenberg 2012; Health Reform in Israel


The israeli health care system hcs

The Israeli Health Care System (HCS)


Oecd reviews of health care quality israel published 14 october 2012

OECD REVIEWS OF HEALTH CARE QUALITY: ISRAEL Published: 14 October 2012

  • "Israel has established one of the most enviable health care systems among OECD countries in the 15 years since it legislated mandatory health insurance. While most OECD countries have been grappling with rapidly rising health costs, Israel has contained growth in health care costs to less than half the average for OECD countries over the past decade".

  • "While low levels of health spending are likely to reflect successive years of tight control over spending, Israel has also made the most of tight budgetary circumstances to build a health care system with high-quality primary health care. “

Brammli-Greenberg 2012; Health Reform in Israel


Values underlying the israeli hcs

Values Underlying the Israeli HCS

  • Strong consensus that government has an important role to play

    • primarily through financing and regulation

  • The system should be fair, accessible and working in the public interest

  • A greater reliance on market mechanisms over time

Brammli-Greenberg 2012; Health Reform in Israel


The national health insurance law

The National Health Insurance Law

  • National Health Insurance (NHI) Law (1995) mandates universal health insurance for all residents

  • Uniform basic benefits package

  • Principles of "managed competition“

Brammli-Greenberg 2012; Health Reform in Israel


The israeli managed competition model

The Israeli Managed Competition Model

  • It includes cost containment measures and close regulation of the health plans by the government

    • In recent years, it is monitoring and publishing quality indicators to facilitate choice and transfers.

  • It allows supplemental insurance to be marketed by the health plans

  • There is no price competition (to prevent "cream-skimming“)

Brammli-Greenberg 2012; Health Reform in Israel


Last july in switzerland 75 voted against managed care reform

Last July in Switzerland - 75% voted against managed care reform

Brammli-Greenberg 2012; Health Reform in Israel


The nhi law 2

The NHI Law (2)

  • Four competing nonprofit health plans (HPs) provide services at their own facilities or through contracted providers

  • Guaranteed freedom of choice of HP

  • Allocation of monies to HPs based on capitation

Brammli-Greenberg 2012; Health Reform in Israel


Health plan market shares

Total Population

Age 65 and Older

Health Plan Market Shares

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

The Swiss can choose between plans from nearly 80different insurance companies; the top 10 insurer conglomeratesaccount for 80% of enrolment

Brammli-Greenberg 2012; Health Reform in Israel


The nhi benefits package

The NHI Benefits Package

  • The NHI benefits package includes hospitalization, physician services, pharmaceuticals and many other types of HC services

  • It is considered a broad benefits package by international standards

  • HPs are required to provide these services under conditions of reasonable accessibility and availability

    • But the law does not define reasonability

Brammli-Greenberg 2012; Health Reform in Israel


The nhi benefits package 2

The NHI Benefits Package (2)

  • Only small co-payments are required (~ 30 NIS for specialist visit; 10%-15% for pharmaceuticals)

  • Quarterly ceiling for family co-payments (ranging from 120-300 NIS, exemptions and discounts for chronically ill and elderly)

  • Long-term care and dental care for adults are not included in the benefits package

  • Mental health was included only this year

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

In Switzerland, health funds are required to offer a minimum annual deductible of CHF300, though enrollees may opt for a higher deductible and a lower premium. Enrollees pay 10% coinsurance for all servicesSince July 2010 LTC is included in the Swiss basic insurance with 20% co-payment

Brammli-Greenberg 2012; Health Reform in Israel


The israeli health care system financing and expenditures

The Israeli Health Care System Financing and Expenditures


The public system financing 1

The Public System Financing (1)

  • The National Health Insurance (NHI) is financed primarily by a health tax and general tax revenues

  • Each year there is an automatic adjustment for changes in healthcare prices

  • The law mandates annual adjustments to reflect demographic growth, aging and technological advances

  • However, the global level of funding for the NHI is determined only after negotiations between the Ministries of Health and Finance

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

The Ministry of Finance (MOF) has multiple, powerful points of influence over Israeli health care (the NHI budget is one major point); In Israel the MOF has generally been more influential than the MOH in health care financing

Brammli-Greenberg 2012; Health Reform in Israel


The public system financing 2

The Public System Financing (2)

  • The NHI budget is allocated among the four HPsmainly (85%) by capitation payments (Risk Adjustment)

  • The risk adjustment formula reflects the number of members in each plan, their age-gender mix and place of residence (no morbidity adjusters).

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

Switzerland’s risk adjustment (RA) scheme that was similar to the Israeli scheme (based on age, sex, and canton) was improved as of January 2012 so that inpatient stay of 4 days or longer in the previous year was included. (Reform passed in December 2007/ effective since January 2012)

Brammli-Greenberg 2012; Health Reform in Israel


The public system financing 3

The Public System Financing (3)

  • A small portion of the NHI funds is distributed among the HPs on the basis of the number of insured with each of five different rare, but expensive, health conditions.

  • Another portion of the funds is distributed based on the extent to which the HPs meet fiscal responsibility and efficiency targets set by the MOH.

Brammli-Greenberg 2012; Health Reform in Israel


National expenditure on health care by financing sector 2000 2010

National Expenditure on Health Care, by Financing Sector 2000-2010 (%)

The National Health Expenditure 2010 was

61.2 billion NIS (~US$ 15.3 billion)

Brammli-Greenberg 2012; Health Reform in Israel


Private financing

Private Financing

  • Consumers pay for services through voluntary health insurance or direct out-of-pocket payments:

    • Not covered in the NHI package (i.e. alternative medicine, dental care etc.)

    • Partially covered (i.e IVF treatments, Para-medicine etc.)

  • Patients also pay for services in the private system (i.e. private hospital)

  • Patients pay privately if they want increased choice of providers, faster access to care or more advanced facilities

Brammli-Greenberg 2012; Health Reform in Israel


The voluntary health insurance vhi market

The Voluntary Health Insurance (VHI) Market

  • Two types:

    • Supplementary VHI offered by the HPs to all of their members;

    • Commercial VHI, offered by commercial insurance companies to individuals or groups.

  • Since 1995 the number of VHI owners grew rapidly

  • In 2010 VHI accounted for 13% of national HE

Brammli-Greenberg 2012; Health Reform in Israel


The voluntary health insurance supplementary insurance

The Voluntary Health Insurance Supplementary insurance

  • Most of the adults (81%) have at least one supplementary insurance plan

  • All HPs offer two layers of supplemental insurance packages

  • The premiums are relatively low

    • determined solely by age

    • no medical underwriting or medical exclusions

  • No HP member can be denied coverage

  • This product perceived by the population as part of the public system

Brammli-Greenberg 2012; Health Reform in Israel


The voluntary health insurance commercial insurance

The Voluntary Health Insurance Commercial insurance

  • 40% of adults have commercial VHI (Almost all also have a supplementary insurance plan)

  • Commercial VHI is provided by for-profit insurance companies

  • It can cover any medical service

    • excluding co-payments in the public system

  • Individuals must apply for coverage (medical underwriting and exclusions are allowed)

  • Premiums adjusted based on risk and relatively high

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

There are many possible reasons why so many people have VHI; Main reason is the desire to have wide coverage as much as possible and the possibility to choose the provider.

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

Many purchase supplementary insurance for enhanced benefits or broader coverage ; However, the size of the market has been reduced since 1995

Brammli-Greenberg 2012; Health Reform in Israel


Israel s health insurance market

Israel’s Health Insurance Market

The Structure of

Israel’s Health Insurance Market

National health insurance:

Uniform benefits package provided by four nonprofit healthplans

Supplemental insurance (SI): Uniform extended benefits package marketed by the healthplans

Commercial insurance:Benefits package tailored to individual needs; marketed by for-profit insurance companies

Commercial

Insurance

Including LTCI

Supplemental

Insurance

National

Health

Policy

National

Insurance

(uniform basket)

Brammli-Greenberg 2012; Health Reform in Israel


The israeli health care system organizational structure and care delivery

The Israeli Health Care System Organizational Structure and Care Delivery


The israeli health plans

The Israeli Health Plans

  • All HPs are well established (at least since the 1930s)

  • All are nationwide in scope

  • All have sophisticated information technology (IT) systems

    • With all primary care physicians working with electronic health records

  • They vary in their historical origins and ideological orientations

    • While Clalit (the largest) has a more socialist orientation Maccabi(the second largest) has a liberal, free-market orientation

Brammli-Greenberg 2012; Health Reform in Israel


The health plans organizational objectives

The Health Plans’ Organizational Objectives

The HPs manage care with regard to three key organizational objectives:

  • Cost containment

  • Quality improvement

  • Equity promotion

Brammli-Greenberg 2012; Health Reform in Israel


The health plans structure of supply

The Health Plans Structure of Supply

  • Over the past years HPs have proactively encouraged health professionals to work in teams

    • Clalit established clinics in which salaried health professionals and others (i.e clerical staff) work together

    • Macabbi encouraged independent doctors to work together and with other professionals

  • The average primary care clinic in Israel is staffed by the equivalent of 3.4 general practitioners, 2.6 nurses, 1.5 practice assistants and most have a practice manager

  • The HPs set global budgets for regional managers and they interface with the clinics' managers

Brammli-Greenberg 2012; Health Reform in Israel


The health plans structure of supply 2

The Health Plans Structure of Supply (2)

  • Promoting primary care large clinics provides the HPs a platform to

    • Implementing system for monitoring utilization and expenditures

    • Providing doctors with additional resources

    • Especially, more resources to support the chronically ill patients

    • Easy and efficient way to provide the individual physician with the information, skills needed and IT infrastructure to contain costs and promote quality of care

Brammli-Greenberg 2012; Health Reform in Israel


Cost containment of the health plans

Cost Containment of the Health Plans

  • HP efforts to control costs include:

    • Review of hospital care utilization

    • The development of community-based alternatives to hospital care

    • Discounted bulk purchasing from hospitals and pharmaceutical manufactures

    • Prior authorization requirements in the case of very high cost medications, treatments and diagnostic tests

Brammli-Greenberg 2012; Health Reform in Israel


Quality improvement the national quality monitoring project

Quality ImprovementThe National Quality Monitoring Project

  • In 2000 all four plans started to work together on a common framework for defining and measuring various quality indicators

  • The projects were financed by the government but implemented by an academic team

  • The implementing team with HP staff are continuously improving and expanding the quality indicators

  • The quality performance results are publicized every year

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

In addition to its regulatory, planning and policy-making roles, the MOH has a key role in two markets: the hospital market and the workforce market.

Brammli-Greenberg 2012; Health Reform in Israel


Selected medical resources and output indicators

Selected Medical Resources and Output Indicators

ISRAEL

SWITZERLAND

Practicing physicians (per 1,000 population): 3.8

Practicing nurses (per 1,000 population): 16.0

Rate of hospital beds (per 1,000 population): 5.0

Average length of stay (acute care): 7.5

Acute care occupancy rate: 87.5

CT scanners (per million population; 2009): 32.8

  • Practicing physicians (per 1,000 population): 3.5

  • Practicing nurses (per 1,000 population): 4.8

  • Rate of hospital beds (per 1,000 population): 3.3

  • Average length of stay (acute care): 4.0

  • Acute care occupancy rate: 98.8

  • CT scanners (per million population; 2009): 9.4

Brammli-Greenberg 2012; Health Reform in Israel


Hospitals

Hospitals

Hadassah Medical Organization, EinKerem Jerusalem

Brammli-Greenberg 2012; Health Reform in Israel


In israel there are 376 hospitalization institutions

In Israel, there are 376 Hospitalization Institutions

The MOH owns and operates about half of the Israel's acute care inpatient beds.

Clalit health plan owns and operates another third of the beds.

Brammli-Greenberg 2012; Health Reform in Israel

46 acute care hospitals (~42,600 inpatient beds)

13 inpatient mental health hospitals

315 inpatient chronic care facilities (including nursing homes)

2rehabilitation institutes


Hospital financing

Hospital Financing

  • Hospital revenue derives primarily from the sale of services to the HPs (80%)

  • The HPs use a variety of reimbursement including

    • Per diem charges and lengths-of-stay

    • Per case payments (DRG)

  • The government sets a cap on hospitals' annual revenue from each HP

  • Each HP negotiates separately with each hospital for discounting arrangements for its insured individuals.

Brammli-Greenberg 2012; Health Reform in Israel


The discounting rate is increasing over time

The Discounting Rate is Increasing Over Time

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

Hospital indicators and the restrictive financial mechanisms raise the question whether the system is efficient or whether the quality of hospital care is compromised

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

In Switzerland, the involvement of the cantons and hospital indicators raise the question whether the healthcare system is inefficient or providing a good and adequate hospital care

Brammli-Greenberg 2012; Health Reform in Israel


Workforce

Workforce

Brammli-Greenberg 2012; Health Reform in Israel


Workforce immigration

WorkforceImmigration

  • Until recently, Israel relied heavily on immigration as a source of new physicians

    • The population of doctors close to doubled during the immigration wave from Former Soviet Union

    • To date, only 40% of all licensed physicians up to age 65 have studied in Israeli medical schools

    • With a decline in immigration, Israel is now making efforts to increase domestic medical graduates

Brammli-Greenberg 2012; Health Reform in Israel


Workforce physicians

WorkforcePhysicians

  • There are 3.5 physicians per 1,000 (from which 1.76 are specialists)

  • Although this rate is above the OECD rate, the MOH projection is that there will be a shortage in physicians in 2020

  • This shortage will be greater among primary care physicians, since young Israeli doctors are choosing to specialize and work in hospitals

Brammli-Greenberg 2012; Health Reform in Israel


Workforce practicing nurses

WorkforcePracticing Nurses

  • The rate of practicing nurses in Israel is very low

    • Only 4.8 per 1,000 population

    • Higher only than Korea (4.6) and Mexico (2.5)

  • Government has invested much effort to encourage the training of new nurses

    • Opening of the nursing school in Nazareth

    • In 2010 the qualified nurses reached a record of more than 2,000 new nurses having joined the market

  • Other efforts were made to strengthen primary care in Israel by encouraging the professionalization of the nursing workforce

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

Swiss work force:the proportion of primary care doctors in the country is small compared to other OECD countries. migrant health workers constitute an important proportion of the health workforce. Need to encourage medical and nursing schools to increase the number of health care professionals.

Brammli-Greenberg 2012; Health Reform in Israel


The pharmaceutical market

The Pharmaceutical Market

  • All new drugs undergo an evaluation process before being included in the NHI package

  • Most community-based prescribed medication use is provided under the NHI and financed primarily by the HPs and secondarily through co-payments

  • OTC medications, prescriptions by private physicians or medications not included in the NHI are paid out-of-pocket or by VHI

Brammli-Greenberg 2012; Health Reform in Israel


The pharmaceutical market 2

The Pharmaceutical Market (2)

  • Pharmaceutical expenditures accounted for 20% of total national health expenditure

  • Israel has a large, successful and growing pharmaceutical industry

  • The most notable company is Teva, the world's leading generics company

  • Generic drugs play a major role in the Israeli market

Brammli-Greenberg 2012; Health Reform in Israel


Generic drugs make up only about 10 of the drugs sold on the swiss market

Generic drugs make up only about 10% of the drugs sold on the Swiss market

Brammli-Greenberg 2012; Health Reform in Israel


The israeli health care system inequality

The Israeli Health Care System Inequality


Complex picture of health inequalities

Complex Picture of Health Inequalities

  • The main dimensions of inequalities – income level, ethnicity and geography – are significantly correlated

  • This make determining underlying causes of the inequalities very difficult

  • Israel's periphery (both south and north) has higher rates of poverty and unemployment and have a higher concentration of Arab Israelis

Brammli-Greenberg 2012; Health Reform in Israel


Complex picture of health inequalities 2

Complex Picture of Health Inequalities (2)

  • Arabs constitute approximately 20% of the population of the state of Israel

  • They are entitled to all the benefits of citizenship in the country (including the NHI coverage)

  • Half of the population living in the north and 20% of those in the south are Arabs

  • Almost all Arabs (92%) live in low socio-economics level communities

Brammli-Greenberg 2012; Health Reform in Israel


Infant mortality rates

Infant mortality rates

Brammli-Greenberg 2012; Health Reform in Israel


Life expectancy at birth

Life Expectancy at Birth

Brammli-Greenberg 2012; Health Reform in Israel


Health reform in israel a model to be followed by switzerland

While differences between Jews and Arabs are likely to account for a significant share of inequality, disparities also exist within the Jewish population (according to socio-economics status and place of residence)

Brammli-Greenberg 2012; Health Reform in Israel


Inequalities the health plans

Inequalities: the Health Plans

  • Arabs and Jews report similar levels of satisfaction with their health plan overall

  • Arabs tend to be more satisfied with the HP nurses and specialist physicians

  • In recent years both Clalit and Macabbi developed a national-wide annual plan to enhance equity

  • Since 2010 the HPs publish annually their concrete steps to enhance equity and the results

Brammli-Greenberg 2012; Health Reform in Israel


Inequalities the moh

Inequalities:the MOH

  • In 2010 the MOH has chosen reducing inequalities as one of its major goals

  • The MOH addresses geographic factors:

    • Supplementary budget to the periphery hospitals that also received new MRI scanners

    • Financial incentives for physicians to work in the periphery

    • Financial incentives for health plans (via the capitation formula and compensation on specific programs)

    • New medical school and nursing training in the North

    • Directive to promote cultural responsiveness

Brammli-Greenberg 2012; Health Reform in Israel


Other moh actions in the last two years

Other MOH Actions in the last two years

  • Expansion of NHI to include mental health

  • Expansion of NHI to include dental care for children

  • Reductions in co-payments

  • The upcoming LTC reform, which will include LTC in the basic NHI benefits package

Brammli-Greenberg 2012; Health Reform in Israel


Its seems that few swiss have access and availability concerns or problems paying bills

Its seems that few Swiss have access and availability concerns or problems paying bills

Brammli-Greenberg 2012; Health Reform in Israel


Discussion policy issues

Discussion / Policy Issues


Key points israel

Key Points - Israel

  • Strong high-quality primary health care with a unique managed care model result in good health outcomes

  • HPs put emphasis on data (IT improvement monitoring and publishing quality indicators) to make the primary care even better

  • Tight budgetary circumstances with strong powerful MOF, make cost containment a primary goal

  • Limited choice make strong incentives for VHI

  • Shortage of nurses with 99% acute care occupancy rateput a heavy burden on the hospitalized patients' families

Brammli-Greenberg 2012; Health Reform in Israel


Key points switzerland

Key Points - Switzerland

  • Switzerland is known throughout Europe for its high-quality medical and paramedic services, and healthcare is always high on the political agenda

  • Offering consumers a large choice is an important value in the Swiss health care system

    • This makes managed care almost impossible to address

  • Switzerland is a wealthy country. This narrows the importance of cost-containment as a primary goal.

Brammli-Greenberg 2012; Health Reform in Israel


Key points switzerland1

Key Points - Switzerland

  • The system is highly decentralized and each of the cantons play several roles in the system

    • this makes it hard to implement policies and strategies developed at the national level

    • but decreases inequalities by periphery

  • Switzerland has a large nursing workforce. This helps to reduce the burden on informal caregivers.

Brammli-Greenberg 2012; Health Reform in Israel


Thank you

Thank You!


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