A Wellness Check of Israel’s Hospital System
Author: Taub Center Staff Bulletin Articles

A new Taub Center study (the first in a two-part series) published last month looks at Israel’s hospitalization system and paints a comprehensive picture of the system as it stands in 2019. In terms of the key metrics that are commonly used to measure hospital quality, the research suggests that there are systemic failures in planning, budgeting, and regulation by the government especially in light of the increasing needs of Israel’s aging population.

Israel’s general hospitalization system largely operates in the framework of an “internal market,” which was created with the passage of the National Health Insurance Law of 1995. In this market, entitled health services are provided according to patient needs, and they are financed and regulated by the State.

Medical services are provided through Israel’s four health funds: Clalit, Maccabi, Meuhedet and Leumit, whether by purchasing them from public medical centers or through the health funds’ direct provision of services. In general, hospitalization services are acquired from “public” hospitals, whose major activity, immaterial of their legal standing, is supplying healthcare services in the framework of the National Health Insurance Law, although the status of these hospitals has not been defined in the law.

Out of 44 general hospitals, 19 are government-owned (meaning employees are civil servants and the budgets are included within the framework of the State budget, for example Sheba and Rambam hospitals), and 12 are owned by health funds (for example, Soroka is owned by the Clalit health fund but provides services to members of all health funds).

In addition, there are also independent, non-profit hospitals (like Shaare Tzedek), companies for public benefit (like Hadassah), and limited companies (such as Assuta Ashdod). The State owns and operates about a quarter of all of Israel’s hospital beds and 47% of general hospital beds. The Clalit health fund owns about 30% of general hospital beds, making the State and Clalit the two main providers in Israel’s hospital market.

The public nature of hospitals with various forms of ownership giving service under the National Health Insurance Law, and the State’s obligation to them, has never been defined. The situation is particularly serious in light of the fact that the State, as both funder and regulator of the system, is also the largest owner and operator for general hospitalization and essentially competes with other hospitals that are dependent on the state for their budgets and regulation.

This situation harms the managed competition laid out in the law as a means to ensure efficiency and public satisfaction and to also ensure that the State fulfills its basic role as an independent regulator of the system.

By law, the State is responsible for ensuring public healthcare services, and accordingly, for licensing and funding hospitalization beds and other infrastructure, as well as determining the size and location of hospitals. In Israel, the number of hospital beds per 1,000 population is relatively low: 2.2 versus 3.6 in the OECD and 4.1 in European countries with healthcare systems similar to Israel’s.

Adjusting for Israel’s relatively young population, the number of beds reaches 2.5, which is insufficient to make up the gap between Israel and other countries. Moreover, while the number of beds per 1,000 population is trending downward in most countries, that trend is especially sharp in Israel, with a 22% decline in a fifteen year period (versus an OECD average of 15% and about 20% in countries with similar systems between 2002 and 2017).

This is in spite of Israel’s relative growth in needs and in the number of elderly people in Israel as compared to other countries.

As previously mentioned, the average number of curative hospital beds in Israel is low, particularly in the geographic periphery of the country.

In the Northern and Southern periphery, the number of beds per 1,000 population is the lowest, 1.32 and 1.55 respectively, while Jerusalem hospitals have the most, 2.36. It is important to note that the number of beds per 1,000 population has declined in all districts, although in Jerusalem, Tel Aviv and the North, the decline has all but stopped, while in the Center and South, it has continued.

In addition, average distances to the nearest hospital for relatively simple medical cases are longest in the Northern district (more than 19 km), then Judea/Samaria (more than 18 km), followed by the Southern district (about 16 km). This is relative to much shorter distances in Tel Aviv and Jerusalem of about 3-4 km. Average distances to regional centers, for more complex medical treatments, are about 45 km in the Northern district and about 41 km in the Southern district, while in Jerusalem and Tel Aviv the distances remain about only 4 km. These differences are also reflected in longer waiting times for hospitalization in the periphery.
Among other reasons, this situation stems from inefficient planning of additional hospital beds. This includes expanding hospitals beyond the optimal 800-bed range in areas which already have a high proportion of beds per population, instead of adding beds and resources to hospitals in the periphery which are in the optimal size range and/or building an additional hospital in the south.
General ospitals in Israel by number of beds

Despite the relatively low number of hospital beds, the number of hospital discharges per 100,000 population in Israel is similar to the OECD average – about 15,000 annually – although lower than the average in countries with similar systems, which is about 16,000 annually.

The average number of curative hospitalizations per bed (bed turnover rate) in Israel in 2016 was particularly high: about 66 versus an OECD average of about 41 and about 44 in countries with similar systems. Israel’s bed turnover rate reflects relatively short hospitalizations on the one hand (about 5 days per patient in contrast to an average of 6.7 days in the OECD countries and 6.2 days in countries with similar systems), and particularly high bed occupancy rates on the other hand.

The average bed occupancy rate in Israeli hospitals is exceptional at about 94%, versus an average of 75% in both the OECD countries and those countries with similar systems. That is, the system is quite limited in its ability to absorb new patients, as it is treating “newly arrived” patients on the one hand and managing a high occupancy rate on the other.
Curative hospital bed use

The data indicate a curative care hospitalization system that is characterized by a diminished ability to handle emergencies. This is in addition to a potentially lower level of treatment quality due to relatively short hospitalizations and additional pressures to shorten hospitalizations due to those waiting for treatment at home and in the emergency rooms, as well as the inability of hospitals to compete with each other due to high occupancy rates.

In light of the disparities between needs and hospital infrastructure in Israel, particularly in the periphery, the addition of curative hospital beds – that are efficient and accessible – is inevitable within the next few years, even when accounting for technological advances that allow expansion of services given in the community setting. Before additional investments in the system are made, though, it is worthwhile to redefine the government’s involvement in the marketplace.