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COVID Lessons: Israel's Public Health System Is Working Fine, but Its Schools Aren't

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A school in Jerusalem two weeks ago.
A school in Jerusalem two weeks ago.Credit: Emil Salman

A senior health care administrator sighed last week when he spoke out about the future of the system. “We blew it. I’ve already told everyone that after the coronavirus, you can forget about getting any budget increases.”

The treasury’s budget division applauds the system’s success in contending with Israel’s biggest health crisis ever, and says the doctors don’t need any more money. What better proof is there that the system works than how well it performed in the face of the pandemic.

The medical teams imagined that the long hours and tremendous sacrifices they made would make them national heroes and legitimize the demands they have been making for years for the government to spend more money, especially to increase the number of hospital beds. On that score, they have a case – the occupancy rates in Israeli hospitals top 90% on average, close to the highest among countries that belong to the Organization for Economic Cooperation and Development.

At the start of the coronavirus crisis, news media were filled with headlines about the chronic shortage of resources. Doctors didn’t hesitate to blame a stingy treasury for failing to spend enough money. Israeli hospitals simply wouldn’t have enough room to accommodate a surge of COVID-19 patients. Indeed, the whole effort to flatten the morbidity curve with such drastic measures as lockdowns was aimed at preventing hospitals from being overwhelmed.

The doctors have mostly themselves to blame – they were simply too successful. It’s clear that despite all the fears that preceded the crisis the health case system coped unusually well with the coronavirus. Its crowning success, especially on the part of Israel’s health maintenance organizations, was the vaccination program. But that shows that the system isn’t in need of any restructuring or more money.

The health care system’s success is especially evident when measured against the educational system’s failure. As one government source said: “The health care system revealed its glory during the coronavirus and the education system its miserableness.”

With the government running a budget deficit of 12% of gross domestic product, it has no choice but to set spending priorities and the schools will have to get financial priority over the hospitals.

How did the medical system succeed where the educational system failed? There are several explanations.

One of them is the ability of Israelis to mobilize resources in a time of crisis. “It was like a war. People felt like they were the most important people in the country and gladly came to work. They worked 24/7 without thinking about pay or conditions,” said one hospital manager. Israeli flexibility, the habit of working under pressure and the fact that the healthcare system was accustomed to working under difficult conditions even in ordinary times – for instance, the ability of hospitals to turn their parking garages into wards – helped to create a rapid and effective response to the pandemic.

Another explanation is the quality of the people in the system, which in turn affects the quality of management. If you want to look at it militarily, the healthcare system is like the air force while the educational system is the armored corps.

Such an unflattering comparison is only partly justified. The educational system also has quality people and many desired to mobilize during the crisis. In the end, the main difference in terms of the performance of both systems was their respective management structures. The healthcare system, mainly the HMOs, performed as they did because they represent a rare combination of a non-governmental public sector that encourages competition and economies of scale.

The HMOs are a public system funded by the government to provide services but not to earn a profit. Nevertheless, the HMOs are not under government control. In other words, they aren’t weighed down by the terrible burden of political appointments or the civil service bureaucracy.

Since 1994, the HMOs have had to compete with one another, thanks to the State Health Insurance Law, which allows people to move freely from one HMO to another. In the absence of any profit motive, the HMOs are dedicated to the quality of services they provide for their members first and foremost.

The ability of the healthcare system to provide quality service is also a function of scale. Even the smallest of the HMOs (Leumit) has a million members. At this size, it has the resources to invest in improving the quality of its services to stay competitive. That is why Israel entered into the pandemic crisis with HMOs that are among the most advanced institutions of their kind on the globe.

That was an overwhelming advantage that enabled the HMOs to handle almost 100,000 coronavirus patients convalescing at home, to enable all appointments and other procedures to be done digitally and vaccinate millions of people in the space of a few months. It was also a reason why Pfizer was willing to sell Israel such a large number of vaccines.

Israel’s educational system has none of these assets. It’s a wholly governmental system, with power centralized in the hands of a mismanaged Education Ministry. Ministry officials decide how many teachers a school gets, how many hours of instruction it can provide and what should be taught. Everything is dictated from above, disconnected from local realities on the ground. Its messy and cumbersome structure makes it difficult for decisions to be made and relate to its end users, the students. The HMOs can reach their millions of members within 24 hours; the Education Ministry can take months or even years to relay directives to the schools.

Of course, there’s no competition between schools nor are there any economies of scale. Thousands of schools are administered by one central decision-making authority. “In the healthcare system, inputs are defined. In other words, the HMOs define their budgets as what is needed to ensure the health of their members. In education, by comparison, they define everything by output – the Education Ministry decides what to provide, how to provide it and when to provide it. The result is poor management and a very poor level of service,” said one government source.

The Education Ministry’s loss of control over what was happening in the schools was revealed when it refused to reopen the first and second grades even in capsular form, on the grounds that the schools weren’t capable of handling it. Within hours, however, local authorities arranged everything on their own. As one government official said, “the minute that the first of the local authorities announced that they had a solution for dividing up the pupils and that classes could resume, all the other local authorities wanted to do the same thing for competitive reasons.”

That incident during the pandemic underscored an obvious conclusion – that management of the education system must be decentralized and more power handed delegated to local authorities. That would enable them to compete for the quality of education in their jurisdiction. The industry’s job should be restricted to making sure the competition is effective by setting measures of educational quality.

In contrast to the calls for a revolution in the healthcare system, whose necessity has become at best secondary in the post-COVID era, a revolution in Israel’s education system has been shown to be absolutely essential.

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