HMOs Get Windfall but Complain: Not Enough

Israel's four HMOs to each receive $26m but aging population costs more to treat, they say.

Ronny Linder
Ronny Linder
Ronny Linder
Ronny Linder

The government is giving Israel’s four health maintenance organizations a total of 420 million shekels ($120.3 million) in new funding, Finance Minister Yair Lapid and Health Minister Yael German announced on Thursday.

The purpose of the money is to shore up the HMOs’ financial condition. Yet even after the windfall, the HMOs say they remain chronically underfunded by the state.

Each of the HMOs – Clalit, Maccabi, Meuhedet and Leumit – will get 90 million shekels. The remaining 60 million shekels will be provided to finance patient dental care, based on specific criteria.

Beyond the 420 million shekels, the ministers announced an additional 150 million shekels for specific needs of the public health system.

The HMOs say the support they receive from the government has been eroding for years, by hundreds of millions of shekels a year.

The two primary causes of the problem, they say, are the raising cost-per-day that HMOs have to pay for hospitalization of their patients, which has been compensated for by the government, and the state’s failure to adjust funding for the growth and aging of the population. This year alone, the HMOs say, their funding has eroded by 700 million shekels.

A report issued by the Bank of Israel earlier this month backs up the HMOs’ claims.

In addition to the 420 million shekels, the ministers announced that 150 million shekels would be provided for medical infrastructure and technology, including 45 million shekels to buy MRI equipment for hospitals in outlying parts of the country. Another 15 million shekels is for a linear accelerator, providing cancer treatment at the Rebecca Sieff Hospital, Safed (where the announcement took place). Currently, no hospital north of Haifa has such equipment.

Twenty million shekels will fund a national information project to enhance cooperation between the country’s hospitals and HMOs. Another 10 million is for urgent care centers, while 20 million will provide equipment at hospitals run by Clalit.

The HMOs reacted with skepticism to the ministers’ announcement of the 420 million shekels payment – which is a one-time payout rather than a permanent increase for future years – and say it is far less than what’s needed to address their financial situation. “The announcement from the finance and health ministries is a deception and fig leaf for the huge deficit,” Clalit Health Services said in a statement. Clalit is by far the country’s largest HMO.

“The Health Ministry continues to discriminate against Clalit and to promote an inequitable distribution of resources,” the statement continued. “The transfer of 90 million shekels to Clalit, which insures more than half the population, is a drop in the bucket in light of an expected deficit of 1 billion shekels, for which the finance and health ministries are responsible for eroding budget funding.

“Although a Health Ministry report concluded that Clalit is the most efficient of the four HMOs, it is getting the smallest amount, relative to its size, and it doesn’t cover the deficit even to a small extent,” Clalit added.

A Clalit clinicCredit: Nir Keidar

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