In late 1998, the Knesset approved the collection of co-payments for visits to specialist physicians provided within the framework of National Health Insurance. Its objectives were to secure additional revenue for the health plans and reduce health plan expenditures by lowering the rate of unnecessary visits. Numerous studies conducted abroad had demonstrated that co-payments could reduce visit rates.
The co-payments were set at rates that are relatively low by international standards. Nonetheless, concern arose that the co-payments might impose a major financial burden on the poor, the seriously ill and the elderly, and that they might deter these vulnerable population groups from seeking needed care. As a result, a large segment of the population – recipients of National Insurance Institute benefits, such as income support and disability benefits – was exempted from the co-payments. For others, quarterly ceilings were adopted and discounts were granted.
Instituting co-payments for physician visits was and is one of the decade’s most controversial developments in Israeli health policy. Questions have lingered as to whether the co-payments have achieved their aims, and as to the extent of their impact on the poor.
This report examines how the co-payments have influenced household outlays, health plan revenues, care-seeking behavior, and physician visit rates. The analysis is based on in-depth interviews with government policymakers and health plan executives, as well as secondary analyses of Central Bureau of Statistics and Myers-JDC-Brookdale Institute survey data and health plan administrative data. The study employed advanced econometric models, and benefited from the involvement of leading health economists from abroad as consultants.
The study findings suggest that the co-payments have not achieved their aim of reducing the physician visits of the population as a whole. Moreover, contrary to what was expected, the rate of those with exemptions decreased, relative to that of those who were not exempt. Also, a relatively high rate of low-income persons reported not visiting a specialist due to the cost.
This report discusses possible reasons for these findings, including the relatively low rate of co-payments and the financial incentive they gave health plans to increase the supply of specialists in higher-income areas (with low rates of exemption). In addition, low-income persons’ lack of awareness of their automatic exemption or of the quarterly ceilings on co-payments may have led them to forfeit visiting a specialist.
In the wake of these findings, policymakers may wish to review the current co-payment policy and explore ways to better align the policy with its objectives. The study was funded with the assistance of the Israel National Institute for Health Policy and Health Services Research.
Citations in the professional and academic literature
Shadmi, E., Balicer, R. D., Kinder, K., Abrams, C., & Weiner, J. P. (2011). Assessing socioeconomic health care utilization inequity in Israel: impact of alternative approaches to morbidity adjustment. BMC public health, 11(1), 609.
Rayan, N., Admi, H., & Shadmi, E. (2014). Transitions from hospital to community care: the role of patient–provider language concordance. Israel journal of health policy research, 3(1), 24.
Chinitz, D., & Meislin, R. (2009). Israel: Partial Health Care Reform as Laboratory of Ongoing Change. Six Countries, Six Reform Models: The Healthcare Reform: Experience of Israel, the Netherlands, New Zealand, Singapore, Switzerland and Taiwan: Healthcare Reforms” under the Radar Screen”, 25.