Israel's health system reform

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Abstract
Current reforms of the Israeli health system seek to improve its efficiency, quality and responsiveness. Access to a basic basket of health services will be guaranteed to all citizens under National Health Insurance. Competing sick funds will provide the basic package in exchange for a pre-paid capitation. Enrolment in and movement of individuals between sick funds will be unrestricted. Additional benefits can be financed through voluntary supplemental insurance. Sick funds will be required to structure themselves according to regions determined by the government Under this type of scheme several impacts on access and health status may be anticipated. While sick fund managements have an incentive to improve their services, they may also seek to engage in biased selection and lower costs through under-utilization, especially for high risk groups. Elimination of price competition, strict separation between basic and supplemental insurance, and regionalization of sick funds in accordance with the government mandate, may impose undue limitations on the flexibility of sick fund managements in realizing economies of scale and on responsiveness to patient needs. In this paper the role of management in dealing with these potential problems is examined as well as approaches for minimizing negative effects on health status.

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