State Hospitals' Income From Medical Tourism Up 220% Since 2010

According to the Health Ministry, revenues from medical tourism in state hospitals were NIS 54 million in 2009. But by 2011, they were 2.2 times higher, at NIS 119 million.

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Medical tourism to Israel is already growing by leaps and bounds, even before the expected upsurge in tourism that this week’s approval of the Open Skies aviation agreement is expected to produce.

A new report by the Health Ministry reveals that despite the ministry’s efforts to increase supervision of the medical tourism industry, which started in the wake of a Haaretz investigation into the matter in November 2010, medical tourism to Israel is booming. But experts warn that the business is prospering at the expense of Israeli patients.

Revenues from medical tourism in state hospitals were NIS 54 million in 2009, the report said. But by 2011, they were 2.2 times higher, at NIS 119 million.

A copy of the report was obtained under the Freedom of Information Law by the Hatzlaha Consumer Movement for Promoting a Fair Social Economy.

Medical tourism revenues at Rambam Medical Center in Haifa rose from NIS 7 million in 2009 to NIS 18 million in 2011. At Ichilov Hospital in Tel Aviv, the figures were NIS 37 million in 2009 and NIS 84 million in 2011.

The report does not include Sheba Medical Center in Tel Hashomer, the country’s largest public hospital, because Sheba’s management refused to report its medical tourism revenues. But industry sources said the jump in revenues at Sheba was similar to that at other hospitals.

The ministry’s position on medical tourism changed two and a half years ago, when a committee appointed by ministry director general Prof. Ronni Gamzu recommended regulating medical tourism. But the draft regulations published in June 2011 were never officially enacted, and the hospitals continue to expand their business without being subject to any regulation or supervision on the matter.

The proposed regulations stated that all hospitals must give priority to treating residents of Israel. They also required each hospital to appoint a medical director to supervise medical tourism; restricted medical tourism to five percent of the hospital’s turnover; required all profits from such tourism to be used to develop hospital infrastructure, with a certain percentage of the profits being earmarked for the development of hospitals in outlying areas; and required hospitals to provide detailed financial reports on their medical tourism business. But even though almost two years have passed since these regulations were released, they still haven’t been ratified.

“The circular still has not been released, apparently because of disagreements between the government ministries involved,” said Naomi Livni, the ministry official responsible for compliance with the Freedom of Information Law, back in March, in response to Hatzlaha’s questions. “The discussions on the matter will continue after the new government is established.”

The information in the report is based on only partial reporting by the hospitals. Moreover, the ministry did not collect information on medical tourism from hospitals that are not state-owned, including such large hospitals as Soroka Medical Center in Be’er Sheva and Rabin Medical Center in Petah Tikva, which are owned by the Clalit health maintenance organization.

The Health Ministry also delayed issuing the report, for which it was criticized by the Justice Ministry. The latter informed the Health Ministry that it had not met the legal deadline for responding to a Freedom of Information request. However, the Justice Ministry did agree with the Health Ministry’s contention that each individual hospital is a public institution that could be asked individually to provide information under the law.

“On the level of policy, it is important to reach a decision on whether medical tourism is at all legitimate, given the current situation of the public health [system],” said Elad Man, Hatzlaha’s legal advisor. “Does the lack of beds and resources, the lack of beds in intensive care, allow us to provide medical services to foreigners − particularly in light of the approaching cuts in the budgets of government ministries and hospitals?”

“However they wrap it up, a sick tourist receives preferential treatment, which is expressed in hospitalization in a private room, top-quality doctors, shortened waiting times, preference in diagnostic tests or in admittance to operating rooms, and more,” Man continued. “The partial data that was revealed attest to this.”

While proponents of medical tourism often argue that the revenues can be used to improve the quality of care for Israeli patients, not everyone agrees.

“The situation today is the opposite,” said Prof. Gabi Bin Nun of the Department of Health Systems Management at Ben-Gurion University of the Negev. “In the existing reality, medical tourism in the public health system does not ease the distress, but only makes it worse.”

If there were unused resources, meaning an excess of doctors, beds, operating rooms or diagnostic equipment, then patients could come from abroad and everyone would benefit, he explained. But this is not the case.

“There are shortages of almost everything − beds, nurses; the hospitals are overcrowded,” he said. “So medical tourism comes at the expense of the Israeli patient.”

Health Minister Yael German sent Man a letter in early April in which she promised to study the matter. She recently said she will establish a committee to examine ways of strengthening public medicine in Israel.

The Health Ministry said it supervises medical tourism in such a way that it does not exceed the limits recommended by Gamzu’s committee. The panel’s recommendations were formulated into regulations, it continued, but “at some point, due to a policy difference that emerged in discussions with the director general of the Prime Minister’s Office, and in line with the [Health] Ministry’s new policy, whose goal is to regulate the field of medical tourism in Israel, we were requested to wait with the regulations until an overall policy decision is made that includes all the relevant bodies.”

Haifa's Rambam Health Care Campus.Credit: Tomer Noiberg

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