A Finance Ministry proposal to abolish the compulsory 'medications basket' from 2008 onwards has met with severe criticism from the health sector.

The basket is an extensive list of medications which all of Israel's Health Maintenance Organizations are obligated to provide, subject to various degrees of subsidization by the national health insurance service.

The list of medications is determined by a specialized committee and re-assessed annually. It is then given to the HMOs under laws pertaining to the Budget and Economic Arrangements.

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According to the treasury's proposal, medications budgets would be transferred directly to HMOs, placing decisions on allocation of the funds in their hands. HMOs would receive budgets proportional to their size.

Health Minister Yaakov Ben-Yizri called the proposal "frivolous" on Thursday, adding that it would never happen.

The Finance Ministry has also proposed several variations on the new plan in order to cut costs, including reorganizing the committee responsible for adding and removing medications from the basket annually.

Representatives of HMOs, the public and the Israel Medical Association may be banned from serving on the committee, leaving only health and finance ministry professionals.

The committee has been inactive since 2006, having used its 2007 budget one year ahead of time. Official appointments were never renewed and Prime Minister Ehud Olmert advised the Health and Finance ministries that he wished to replace them.

Over 500 new medications and technologies await the scrutiny of the committee when it reconvenes, in order to decide whether they will be subsidized and provided as part of the basket.

Committee members, mainly from the IMA, have demanded more government funding in recent years, saying medical decisions could not be made on such low a budget.

The treasury's refusal to increase the basket's budget, and its proposal to abolish it altogether have met with a harsh response.

"It is an insane, illogical proposal that would mean different HMOs offer different medications baskets," declared attorney Yoel Lipschitz, the Health Ministry's deputy director-general of HMOs.

He said the reform was based on trivial disgreements between the treasury and basket committee members.

Health Minister Yaakov Ben-Yizri said "It is unthinkable that the Finance Ministry seriously means to allow HMOs to choose which drugs will be included in the basket and which won't," he declared. "The Health Ministry and the relevant organizations will determine the composition of the basket and that's that."