Health Ministry: Israel Faces Horrendous Crisis Caring for Elderly

Health Ministry director general says Israel facing crisis in next two decades over its country's aging population.

Health Ministry director general Dr. Roni Gamzu warned yesterday that Israel faces a "horrendous crisis" in the next two decades in relation to the country's aging population, and that "the government must make the correct decisions on the matter."

Gamzu was responding to a report released Sunday by the Bank of Israel on the public services network for long-term care of the elderly in Israel.

Yaakov Litzman - Nir Keidar - March 2012
Nir Keidar

The report highlights the worrying trend of an aging population and the poor quality of services for that population. The central bank's report is part of its annual report, which will be published in full at the end of the month.

Israel's public expenditure on elderly citizens is among the lowest in the West, the Bank of Israel reported. The state isn't prepared to handle elderly citizens, and the problem will only get worse as the population ages, the report says.

"The service the state offers today for caring for the elderly in the community, and the lack of cooperation between the various bodies that handle the care for the elderly, have caused a systematic failure and the deterioration of many elderly until they have to be hospitalized," said Gamzu. He said it also causes very high private expenditures with a crazy level of private nursing care insurance for two-thirds of the population - which has led the entire insurance market for nursing care to high premiums and bankruptcy.

The state spends only NIS 5.8 billion on elderly care a year, while private expenditures are higher than average, found the central bank. In total, NIS 9.9 billion is spent on care for the elderly every year - 1.2% of GDP. The report also notes that because of bureaucracy, many senior citizens don't receive all they're entitled to.

"The number of elderly [aged over 65] in Israel, their proportion in the total population and the proportion in the population of the very elderly [aged over 80] have increased greatly since the 1970s, and are expected to continue rising rapidly in the future," wrote the Bank of Israel.

"The minute the public product is bad, everyone flees to the private market, usage increases and premiums rise," said Gamzu, referring to private insurance for elderly care. "What was sold in the past as a service at affordable prices for everyone, has turned into an expensive and problematic product," he added.

Systematic failure

Gamzu said the ministry would soon try to pass the first stage of a reform proposed by Deputy Health Minister Yaakov Litzman on care for the elderly. The plan would increase the number of weekly hours of at-home care paid for by the state from 18 to 30. The ministry feels the Bank of Israel has given its support for Litzman's reforms.

In addition, the ministry wants to take all the various care options run by different bodies and make the health funds responsible - and have the state-subsidized health basket pay for the care as part of the health tax, which would be increased by 0.5%.

This would guarantee care for the elderly in both the community and in nursing care for everyone. This is the opposite of the present situation, where the state provides only very partial support. Such state support for elderly care is also contingent on means tests for the family. In addition to adding caregiver hours at home, the ministry wants to provide funding for family members who take care of the elderly - and cancel most of the means tests.

"The higher proportion of elderly in the population is also reflected by an increase in the old-age dependency ratio, which is the ratio of the elderly population to the working-age population (20-64 ), and by an increase in the proportion of the over 65s who suffer from physical limitations which impair their ability to carry out day-to-day activities," the central bank said. The Health Ministry also wants to become the sole regulator and supervisor of elderly care.

The biggest opponent to the proposed reforms is the Finance Ministry, which objects to raising the health tax.

The National Insurance Institute has its own reform proposals, which do not involve granting the Health Ministry sole control over the matter. The NII's proposals, which were adopted in general by the Trajtenberg Committee on socioeconomic reform last year, include focusing budgets for elderly care mostly on those who are bedridden or needy. The cabinet has yet to discuss these proposals because of the Health Ministry's objections.

"In 2010, public expenditure on long-term care for the elderly amounted to NIS 5.8 billion, or 0.7% of GDP, and national (public and private ) spending for this care reached NIS 9.9 billion, or 1.2% of GDP in that year. The ratio of this public expenditure to GDP in Israel is low in comparison to other OECD countries, even taking into account the fact that the population in Israel is younger. In addition, the share of private spending on continuing care for the elderly in total expenditure on this item (public and private ) is higher than in OECD countries. In Israel, demographic developments alone are expected to increase public expenditure on such care by at least 30% (at fixed prices ) by 2019, and by more than 300% by 2059. This is assuming that the proportion of the elderly requiring continuing-care services among the age groups remains at its present level," wrote the central bank.

"In this respect, ways must be found to enhance the coordination between the different services in the community and in institutions, and to increase the efficiency of the means tests in a manner that will improve public services to the elderly and their families, and that will help them to fully exercise their rights. The reforms proposed in the area of caregiving should be focused on planning a suitable structure for public services for the elderly, in the community and in institutions, and on the manner in which they are to be financed in accordance with forecast demographic developments, wrote the Bank of Israel.