The standard of medical treatment in Israel is about to decline dramatically. Lines for operations and treatment will soon be longer and the main victims will be the poor and the residents of outlying districts, say senior Health Ministry officials and directors of hospitals and Health Maintenance Organizations (HMO).

This prediction is based on the financial crisis in the public health system, the worst since the introduction of the state health law in 1995. Health Ministry sources say the deficit in the health system is around NIS 2 billion.

Senior ministry officials say medical services have already deteriorated noticeably in some state hospitals and HMOs. Delays in operations may harm patients, or even kill them. The State Comptroller has already warned that the long lines lead doctors to ask patients for bribes to advance their operations - and in many cases the patients agree.

In some public hospitals, such as Hadera's Hillel Yaffe and Ashkelon's Barzilai, the management has ordered a halt to procedures like laparoscopic surgery. Other hospitals' managements have reduced the days on which surgery is performed, limited permits for costly laboratory tests and restricted the quota of patients in some departments, including dialysis.

As Haaretz has reported, state hospital directors warned at the beginning of the month of "a critical shortage of medical equipment in hospitals" and said they are approaching a situation "in which we will not be able to function, and the shortage will endanger lives."

About a week ago Health Minister Danny Naveh also warned the cabinet that state hospitals "will soon be left without medicines and medical equipment."

The HMO's feel the crisis too. All four of them have issued stricter limitations for prescribing expensive medicines and treatments. Some HMOs have reduced their members' rights and are charging the full price of hundreds of shekels for medicines previously issued for less, without advising patients in advance.

In some cases the HMOs threaten their doctors that unless they comply with the harsh instructions of administering medicines they will be fired.

Two weeks ago Neveh met Finance Minister Benjamin Netanyahu and advised him of the financial crisis in the health system. But so far no long term solution has been suggested. According to the Health Ministry, the accumulated debts include NIS 400 million in the state health system - general hospitals, geriatric and psychiatric hospitals and public health services - and NIS 1.5 billion in the four HMOs.

The Clalit HMO deficit for 2003 is estimated at NIS 897 million. The HMO insures 60 percent of the population and 70 percent of the elderly. The accumulated debt of Leumit HMO is estimated at NIS 339 million. Maccabi HMO has a NIS 262 million debt and Meuhedet NIS 98 million.

The Health Ministry's explanations for growing debts of hospitals and HMOs include the increase in expenses caused by population growth, the introduction of new medical technologies and the Health Ministry's lack of budgets for special projects.

The ministry also says that while the number of serious and elderly patients whose cost to the system is larger has increased in recent years, the health budgets have not increased accordingly.

The treasury says the crisis also derives from the Health Ministry's bad financial management. Treasury officials say the Health Ministry is unwilling to carry out their demand to close down redundant units and departments, like liver and kidney transplant units, heart and brain surgery units and heart catheterization units.

Treasury officials cite the unit for heart catheterization which was set up some two years ago in Poriah Hospital in Tiberias. They say the unit is causing large financial deficits and is not justified medically.

Poriah Hospital sources said the unit is justified and has saved many patients lives in the region. However, despite this the hospital's management will soon suggest to the Health Ministry to close the unit to reduce the hospital's deficits.