Medical Tourists Get Priority at Israelis’ Expense, Says Report

Where’s the money going? Accountant General’s report reveals unregulated business worth hundreds of millions a year.

Ronny Linder
Ronny Linder
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Hospitalization is driving the cost of healthcare in Israel.
Hospitalization is driving the cost of healthcare in Israel. Credit: Nir Kafri
Ronny Linder
Ronny Linder

Giving priority to medical tourists over Israelis, operating on those tourists in the morning while the doctors are on the public payroll, financial irregularities in the management of medical tourism agents, and more — these are only part of the findings in the first of its kind report from the audit unit in the accountant general’s division of the Finance Ministry.

The report covers the running of the “health corporations” of five large state-owned hospitals during 2013 and the first quarter of 2014. The health corporations are the bodies that run the additional operations at the hospitals in the afternoons after services to the public have ended, and also includes the medical tourism business. The five hospitals examined are: Sheba Medical Center at Tel Hashomer; Ichilov Hospital in Tel Aviv; Rambam Medical Center in Haifa; Assaf Harofeh Hospital in Tzrifin; and Wolfson Medical Center in Holon.

The revenues of these five hospitals from medical tourism in 2013 reached 347 million shekels, states the report. Since these figures do not include other large private hospitals such as the two Hadassah medical centers and Shaare Zedek Medical Center in Jerusalem, as well as Assouta Medical Center in Tel Aviv, the total revenues of the medical tourism “market” in Israel in 2013 is estimated to be more than 600 million shekels.

Of the five hospitals, Ichilov took in by far the most money from the business last year: 155.4 million shekels, with Sheba earning 129 million shekels. The rest earned much smaller sums.

The accountant general’s report was presented this week to the members of the German Committee studying reforms in the health care system, headed by Health Minister Yael German. The committee is scheduled to vote soon on its recommendations.

The team from the treasury noted in the report that the hospitals did not cooperate “even after the intervention of the director general of the Health Ministry and his order to cooperate with the audit team there were limitations on the part of the hospitals and [health] corporations.” The report stated that the hospitals either refused to provide documents outright or provided some, but refused to allow them to be removed from the hospital or photocopied — something which made it difficult to conduct the work of the audit.

The audit basically says the entire medical tourism industry is a big mess in terms of management on the part of the state-owned hospitals.

For the first time, a government agency determined officially that medical tourists are given priority over Israelis — at the latter’s expense. This directly violates ministry regulations that ban giving such tourists any priority in making appointments, as well as requiring that such appointments for the tourists do not lengthen waiting times for Israeli patients. In practice, the medical tourists go through a separate procedure and wait much less time and in most cases receive appointments on the dates they ask for. The team studied the question by examining the patients’ files — and found that the tourists had priority in all the hospitals, and often wait only a few days, Israelis can wait months. In cases in which the waiting time for Israelis is unreasonable according to the National Health Law, medical tourism should be stopped, said the audit team.

Follow the money

The next big question is where is all the money going? The hospitals often claim the revenues from medical tourism are used to improve health care for the public, but the Health Ministry has no supervision over the use of the funds and it is not at all clear where the money goes.

While regulations state that medical tourists must be charged the standard rates for Israelis, and are not allowed to choose their doctors in return for payment, in practice the hospitals have no rules in place to prevent this. For example, at Wolfson and Assaf Harofeh the payments to doctors were the result of negotiations between management and the doctors, and in almost all cases — except for Ichilov — the payments were much higher than what is allowed. Last January, after Channel 2’s “Fact” investigative television show broadcast three doctors at Ichilov who were filmed asking a medical tourism agent for money under the table, the ministry banned the practice of charging medical tourists higher rates. The report mostly applies to the period before the expose.

The audit team also recommended banning the medical tourism agents from being able to approach doctors directly and instead requiring them to work through the hospital medical tourism departments.

The team also found that doctors were being paid for medical tourism procedures at the same time they were being paid for being on duty in the morning hours on their regular jobs providing services in the public health care system. In addition, other hospital facilities such as labs and imaging departments also worked for medical tourism during the hours they were supposed to be doing public work only.

The area of agents who broker the deals between the hospitals and the medical tourists is wide open and completely unregulated, as are their fees, and there is no transparency for any side involved. There are no tenders or rules, and no price lists; and in some cases these agents been provided with free offices inside the hospitals and often present themselves as being representatives of the hospitals.

The report also found that in a number of cases the hospitals have been stuck with bad debts as the tourists leave the country owing money that often cannot be collected.

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