Cabinet Members Approve Bill to Restrict Health-care Competition in Israel

Changing providers would no longer be allowed via the internet if the bill becomes law

The entrance to a branch of Maccabi, one of Israel's four health maintenance organizations.
Eyal Toueg

The Ministerial Committee for Legislation voted Sunday to approve a private member’s bill by MK David Amsalem (Likud) to reduce competition among health maintenace organizations.

Health Minister Yaakov Litzman supports the bill. The Anti-Trust Authority told the government last week it is strongly opposed.

The draft law’s provisions include eliminating the option to switch HMOs over the internet, reducing the number of times members can switch HMOs each year and placing and placing limits on the terms of employment for primary-care physicians who move from one HMO to another.

The Health Ministry commented that the bill would go back to the ministerial committee after its preliminary reading in the Knesset.

Kupat Holim Leumit, the smallest HMO, has been bleeding members in recent years and suffers the most from competition. In addition, the government fears HMOs are tempting doctors to switch by offering monetary incentives to them that provide no tangible benefits to members.

A prominent provision in Amsalem’s bill would prohibit general practitioners, obstetricians and pediatricians who leave one HMO for another from working within a 30-kilometer radius of their previous place of work.

The Anti-Trust Authority said the bill “undercuts competition” by significantly limiting freedom of movement. It expressed concern that the reform would have negative repercussions for consumer welfare, particularly the quality of medical service provided by the HMOs.

Physicians also strongly oppose the bill.

“It’s absurd to prevent an HMO from hiring, for example in Kfar Sava, a doctor who worked previously in Ra’anana or Bat Yam who wants to work for another HMO in Ramat Gan,” said Zeev Wurmbrand, CEO of Kupat Holim Meuhedet.

The Anti-Trust Authority commented that such a ban is liable to hurt the spread of HMO services and even the incentive of doctors to invest in providing quality service to their patients.

Regarding HMO-swapping, 2017 was the first year in which more than 2% of members, some 189,000 people, switched HMOs. About half did so over the internet. Leumit recorded a net loss of 13,000 users, while Kupat Holim Maccabi registered a net gain of 21,000.