Leumit HMO’s Fate in Doubt as Members Flee

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FILE PHOTO: Jerusalem branch of Leumit HMO. February 2015.
FILE PHOTO: Jerusalem branch of Leumit HMO. February 2015. Credit: Emil Salman

Officials are concerned about the future of the Leumit health maintenance organization, the smallest of Israel’s four HMOs, as preliminary 2015 figures show it continuing to lose members and money.

Figures from the National Insurance Institute released Wednesday showed Leumit had lost a net 13,045 members this year, bringing its total net loss in the past three years to about 25,000. Among the other three HMOs, No. 2 Maccabi showed the biggest gains, adding 11,285 members while No. 1 Clalit’s subscriber roles were almost unchanged and Meuhedet added 1,738, NII figures showed.

Although the latest financial figures aren’t available, Leumit had the biggest negative equity at the end of last year of all the HMOs and had run a deficit of 1.176 billion shekels ($303 million) and enough cash on hand at any given time for just two days of operations.

Officials at the health and finance ministries are concerned about the HMO’s ability to survive and in recent months have been looking for ways to shore it up financially.

The HMO is by far the smallest of the four, which a market share this year of just 8.8%, which deprives it of the economies of scale the others enjoy even as it has to provide the same range of services.

Clalit controls more than 52% of the market and Maccabi 25% and Meuhedet had a 13.8% market share but its memebrs are concentrated in Jerusalem, Beit Shemesh and Rehovot, which enables it to better control costs.

One of the options officials are mulling is to merge Leumit with Meuhedet. One health official, who asked not to be identified, said he wouldn’t be surprised if the treasury budget division sought to put a merger provision in the next Budget Arrangements Law. At the Health Ministry, however, officials are less enthusiastic about the idea.

Maccabi, meanwhile, has been engaging in a high-powered recruitment program aimed at the ultra-Orthodox community and has been leading a membership drive in Jerusalem, opening five offices in the city.

The ultra-Orthodox, as well as Israeli Arabs, are the new target market for the HMOs. Maccabi and Meuhedet, which are focused on the ultra-Orthodox city of Bnei Brak, have launched advertising campaigns, paid for sponsored information in Haredi newspapers and hired middlemen.

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