A Sickness at the Heart of Israeli Health Care

Israeli doctors and their families can receive preferential medical treatment to you. It's a bitter pill to swallow, and emblematic of the problem with interest groups.

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Last week, a friend called and asked for a contact with David McWilliams, following a column the Irish journalist and economist wrote in the Irish paper Sunday Business Post. McWilliams described the real reasons he thought the European establishment is afraid of the anti-austerity Greek party Syriza, which rose to power two months ago.

Sorry, I answered, it’s true that he spoke with TheMarker twice and lived in Israel for two years in the last decade. But I don’t know McWilliams beyond reading his column, and translating some of them into Hebrew. The friend was surprised: he thought from reading his articles that McWilliams had been reading TheMarker.

No, I explained. Apparently McWilliams is reading reality in certain capitalism democracies, not only in the countries of the Mediterranean basin but, to a degree, in the United States as well.

McWilliams wrote recently, “When looking at politics in mature democracies, I prefer to use the term insider vs outsider, rather than right vs left, urban vs rural or conservative vs liberal, to describe the electoral fault lines.”

Insiders, be they on left or right, are organized. “They can be traditional public sector trade unions who want no reform, or they can be bank bosses who want a bailout. Their game plan is to gouge the state and extract as much rent as possible for their members and interests.”

Come crisis, he wrote, these powerful insiders go into “self-preservation mode,” to ensure “their members’ interests are protected from the slowdown in growth and that they get as big a share of the dwindling income pie as possible.” McWilliams added, “Interestingly, the insiders on the traditional left and conservative right join forces to pass on the costs of recession to the outsiders. This is why you see the statist left and the corporatist right in power all over Europe from Spain to France and Italy they ham up their ideological differences for the audience, but essentially, they are both in the business of preservation.”

McWilliams wasn’t talking about Israel but Greece, or Ireland, or Spain, or Italy, or Portugal, or any other Western country hiding – behind a slogan of “free market” or “social democracy” or left or right – a far more complex system: the money, the prestige, the honor, the employment terms and the tenure all lie with organized interest groups.

Doctors not healing the system

We didn’t need McWilliams for a reminder of the system operating in Israel. TheMarker and Haaretz’s health-affairs correspondent, Ronny Linder-Ganz, wrote recently about doctors – who won’t want to read that they’re an interest group. But Linder-Ganz wrote that the Health Ministry froze a significant agreement the Israel Medical Association struck with the Meuhedet health maintenance organization, under which the doctors and their families (spouses, kids, even grandchildren) would get medical care, lab tests, scans, drugs, etc., at any of the government hospitals and Shaare Zedek Medical Center, Jerusalem – under special terms – if they join Meuhedet. In most cases they wouldn’t have to bring a referral from another doctor (a referral from oneself will do), just their Meuhedet card. They would also be eligible for an immediate commitment of coverage, something that involves a wait for anybody else.

IMA chairman Nimrod Rahamimov and Meuhedet director Zeev Vurembrand wrote in a joint letter to doctors that the new arrangement is really a revival of an old tradition of doctors joining Meuhedet, but that the habit had to end under the national health care law.

The IMA had tapped Maccabi first, by the way, but after talking with its legal counsel, Maccabi said no.

If that smacks of a corrupt arrangement to you, albeit a perfectly legal one of the sort very common in the Israeli public sector, well, you’re in good company. The Health Ministry wrote to Vurembrand that the arrangement was out of order, discriminating (among other things) in favor of the doctors and their loved ones, at the expense of everybody else insured by Meuhedet. Following that letter, Rahamimov disseminated another letter to doctors, complaining about “good souls who complained to the Health Ministry.” The arrangement had passed the legal test at both organizations (IMA and Meuhedet) and remained in force, he wrote. Doctors working for the Clalit HMO have a similar sweetheart deal with that organization’s hospitals, he added, which had passed a Supreme Court challenge three years ago.

What Rahamimov didn’t mention is that, previously, the state comptroller waxed critical on the Clalit arrangement for doctors and their families, including free drugs and visits to some doctors, discounts on co-payments (if they ever applied), and more, which cost the taxpayer about 90 million shekels ($22.9 million) in 2009. The arrangement had been in place for decades and was embedded in labor agreements, but completely contravened the principle of equality before the law, the state comptroller explained. It could also lead to resources, such as drugs and services, being wasted.

In the Supreme Court ruling to which Rahamimov refers, Justice Elyakim Rubinstein ruled that, on the one hand, benefits of that sort went back forever; he recalled observing as a child that city hospitals had a “personnel doctor” to handle medical issues of the health-care provider’s own workers. That, Rubinstein observed, would be hard to change overnight. But on the other hand, Israeli society has been progressing and what seemed obvious decades ago was no longer obvious.

Giving preferential treatment to insiders cannot pass the legal test, Rubinstein wrote.

Rubinstein is out of the loop. Time and again, such arrangements have been ratified by the labor courts.

I called Adi Niv-Yagoda, an expert on medical law and ethics, who had been involved in then-Health Minister Yael German’s committee on reforming private medicine. I think doctors getting VIP treatment is inequitable, illogical, unprofessional. Am I missing something?

“The culture of ‘us and the rest’ has been around for years and if anything maybe it’s been weakening, but it’s still prevalent in the medical community,” Niv-Yagoda told me. “It may have developed on the back of the special nature of medical training, the intensity of the profession, the status of the doctor in society, medical paternalism and the knowledge gap between doctor and patient.”

The system has doctors and nurses who sacrifice and do all in their power to serve. How can a policy of nepotism and cronyism be sustained with that?

“Doctors and nurses in Israel are the best and most professional in the world. Sometimes medical teams work in substandard conditions, yet they make tremendous effort to help their patients and the weak. However, maybe because of their great sacrifices, the personnel policy at the health-care institutions is perceived as a sort of compensation for the investment and sacrifice.”

The greatest unofficial perks doctors and their folks get is shorter waits for medical tests and procedures, and, to a degree, in hospitalization conditions, he says.

Is this differential treatment a global problem?

“The Israeli health-care system is not substantially different from others, whether things are established and done openly or whether preferential treatment is kept quiet. Cronyism is not unique to the health-care system – it’s human nature.”

It’s not like politics, though, Niv-Yagoda says, where politicians advance their pet people for their own sweet sake, to maintain their clout, or in fond expectations of future back-scratching in return. A doctor giving his kin shortcuts is trying to save their health or even their life: he wants to help, not advance his own interests.

Are there two types of people with health insurance: the ones with contacts in the right places, and the rest?

“Yes. Like in many systems that provide service, there is no question that the health-care system also has two types of patients: connected ones and the general public. The main difference between the two is the availability of medical service, not necessarily the quality of the medical care, though availability can affect quality.”

Doctors taking care of themselves first – legally, of course. The strong unions take care of their own interests. So do the bankers and big borrowers and monopolies – every tribe caring for its own. And each is right when it sees the norms around it. When the social capital balance is low, each maximizes its personal gain and assumes that it’s the only way to survive. The more people cut corners, the less people believe in the government, and the more people count on protekzia [connections] – the higher the price of behaving like a decent human being becomes. And the results are there to be seen in the ER, and in the social collapse of the countries around the Mediterranean Sea basin.