Families Spend Twice as Much on Healthcare Now as in 2000

The burden of family spending on healthcare has increased sharply in the last 10 years, while government investment pulled back. From 2000 to 2009, a family's average outlay on healthcare shot up from NIS 339 a month to NIS 633, according to a special report on healthcare spending published by the Central Bureau of Statistics yesterday.

During the last 10 years, total spending on healthcare - including private and government expenditure - has remained more or less unchanged. In 2009 it increased by 4% compared with 2008 to NIS 60.6 billion, or nearly 8% of Israel's gross domestic product.

However, the share of private spending out of total expenditure on healthcare rose from 36% to 42% from 2000 to the end of 2009, according to the report. That is an increase of 17%.

From 2000 to 2009, revenue from healthcare tax remained steady, financing about a quarter of total national expenditure on healthcare.

Yet the government's share of the bill, financed through the state budget plus the budget for the "healthcare basket," fell by 14% in that time, from 62% of total expenditure in 2000 to 57% in 2009.

According to a report compiled by the Health Ministry, in the last decade household spending on healthcare has shot up.

Put in personal terms, the average outlay by a family nearly doubled, rising from NIS 339 a month to NIS 633 in 2008, the ministry said. That amounted to 5.1% of the family's monthly outlay, on average.

Spending on supplementary health insurance plans increased nearly threefold in the space of a decade to NIS 169 a month, on average, while expenditure on dental care increased 47% in the period to NIS 181 a month.

Also, families today spend an average of NIS 120 a month on drugs, and NIS 46.50 a month on optical glasses, the Central Bureau of Statistics says.

"Private spending on healthcare is indicative of the degree of solidarity in the healthcare system. The trend is a red flag," says Gabi Ben Non, a professor at the Department of Health Systems Management at Ben-Gurion University of the Negev in Be'er Sheva.

Slight trend change?

This year, the healthcare system is anticipating a slight change in trend because of Deputy Health Minister Yaakov Litzman's plan to provide free dental care to children up to age 8. His program came into effect last month. But the impact on family spending on healthcare is not great.

In international terms, Israel's national expenditure on healthcare as a function of gross domestic product is low, compared with 23 members of the Organization of Economic Cooperation and Development, which Israel joined this year. In the United States, spending comprises 16% of GDP; in Switzerland and France it's 11%, while in Israel, as said, it's a hair under 8%. However, Israel spends more as a function of GDP than do Mexico (6% ), South Korea (7% ) and Turkey (6% ).

In short, Israel spends $2,135 per capita on healthcare a year (see bar chart ), while the United States leads the pack with per-capita spending of $7,538 a year. Turkey spends $767 per capita on healthcare a year.

Israel is bucking the global trend, says Ben Non. In the OECD, average spending on healthcare grew from 7.8% of GDP in 2000 to 8.7% in 2008. The comparable figure for Israel remained unchanged.

"Spending around the world increased because of the aging of the population, increased demand and rising cost of technology," Ben Non says. One of the reasons spending in Israel hasn't increased is the lack of investment in increasing the number of hospital beds and jobs in healthcare, he says.