The hospitalization fees set by the state in a tender it published for nursing care institutions are not adequate for supporting a dignified life for patients and are extremely unrealistic, according to a ruling handed down on Monday by Tel Aviv District Court Judge Michal Agmon. The judge canceled the tender published by the state in 2007 after finding that the tariffs it set were not up to date, and she severely criticized the government's conduct.

The ruling was handed down in a petition filed by dozens of private nursing home companies in Israel. The companies claimed the fees set by the health and finance ministry in a tender they published in 2007 for the privatization of nursing care hospitalization services lead to losses and do not enable the nursing homes to maintain the patients in a dignified way.

Under the tender the state set tariffs for hospitalization days and all the nursing homes that participated in the tender and charged the stipulated fees were included on the list of winning bidders. The group of petitioners included nursing care institutions that won the tender, institutions that did not win and institutions that did not even bid because the stipulated fees were unrealistic. The petitioners argued that the tariffs would cause harm to all the nursing homes in Israel and would lead to a significant degeneration in the level of service provided to nursing care patients in Israel.

In her ruling Agmon explained that hospitalization for nursing care is not among the medical services included in the health services basket. Payment for hospitalization for people entitled to it is subject to availability of a bed in an institution, and in accordance with the quota of beds stipulated in the Health Ministry budget. The patient or his family is entitled to select an institution from a list of approved institutions and to request participation by the ministry in funding the hospitalization, which is transferred directly to the nursing home.

The 2007 tender stipulated that the cost per day of hospitalization would be between NIS 290 and NIS 301.60. The petitioners claimed a minimal tariff, covering costs of hospitalization and a reasonable profit, should be at least NIS 336.15 per day of hospitalization.

Throughout the process the state refused to show the calculation it used to determine the fee in the tender. After it was compelled to do so, it submitted a revised and improved calculation, and it emerged that the prices set in the 2007 tender matched the 2005 prices and did not take increased operating and personnel costs into account.

"Obviously the rules of administrative law obligate the performance of an examination prior to setting a price in a tender, and not during the course of a legal proceeding," wrote the judge in her decision. "The way the state chose to present the data as the basis of setting the tariff seems to have been intended to conceal more than it revealed."

Moreover, "The right to health, including the right to nursing care, is based in the National Health Law. The National Health Law is intended as a social law and as such constitutes legislation expressing a minimal threshold in the matter of the state's obligation to provide the material aspect of the right to health.

"When it comes to privatization of welfare services," wrote the judge, "the price the state pays a private organization must embody the cost of a service that enables existence with a minimum of dignity and a reasonable profit for the private organization, the service provider."