The struggle between the budget departments at the finance and health ministries has escalated over the Health Ministry's approval of the expanded services under the supplementary insurance plans sold by the Kupat Holim health maintenance organization (HMO). The treasury now plans to insert restrictions on the supplementary insurance into the Economic Arrangements Law in 2008. Such restrictions would effectively revoke the Health Ministry's exclusive authority to determine the terms of the supplementary insurance.

The wording of the treasury's proposed clauses in the Economic Arrangements Law has not been finalized, but will certainly include restrictions on the scope of these insurance plans, with the aim of reducing their activities. Among other things, the treasury is considering rescinding the Health Ministry's authority to set monthly premium rates for the supplementary insurance, in order to lower these rates. Reducing the premiums will make the insurance less worthwhile for the HMOs, which will in turn reduce the services they offer.

Alternatively, the treasury may try to lower demand for HMO supplementary health services by increasing patient participation in the costs. Patient participation in these costs is currently very low, such that the public views the services offered under the supplementary insurance as essentially free.

Another option being considered is a proposal to restrict the salaries of doctors who work at the private hospitals built by the HMOs specifically to serve supplementary insurance policy holders. Their salaries may well be subjected to restrictions, similar to those on the salaries of doctors employed by the health corporations of the public hospitals and who perform "private" operations in later afternoon hours. Such salary restrictions would deter the doctors from leaving their jobs at the public hospitals in favor of working at the private hospitals.

The treasury is troubled by the rapid expansion of the services provided under the supplementary insurance, which has led to a marked increase in national spending on health. The past year has witnessed two dramatic expansions in supplementary insurance coverage: Maccabi Health Services received Health Ministry approval to build the new Assouta hospital as one of the largest in Israel, in north Tel Aviv; and just last month the Health Ministry granted Maccabi approval to provide unlimited medications to supplementary insurance policy holders - including drugs not included in the national health basket.

If all the HMOs are granted such approval, as is expected over the next few months, this will put an end to restrictions on the distribution of drugs in Israel. "The Health Ministry welcomes any professional discussion of the supplementary insurance," said a Health Ministry spokesman, "and is unfamiliar with the details of the treasury's plan. When we receive it, we will respond accordingly."