Can Israel’s coronavirus response protect a neglected healthcare system?
Author: Taub Center Staff Bulletin Articles

As of this article’s publication, Israel has been doing relatively well in the war against COVID-19 in comparison with other countries. This success has to do, in part, with Israel’s age structure, geography, overall health situation, ‘emergency culture’, and the state of the economy.

Israel’s population, about 9 million people spread over a small land mass, is relatively young: those ages 65 and older make up about 10% of the population, compared to about 23% in Italy and about 17% in the U.S. This unique age structure and the country’s high standard of living also translate into a population in relatively good health. This means that underlying risk factors and old age, both of which appear to affect the severity of COVID-19, are less prevalent in Israel than in other countries.

In addition, Israel’s experience with other emergency situations results in the ability of officials and the population to adapt quickly while security resources, including advanced technology, help the country battle the spread of the virus. Israel’s high standard of living and developed social safety net help cushion the blow from the virus.

As in the rest of the world, Israel’s healthcare response thus far encompasses two central approaches: social distancing and direct medical care when necessary. Social distancing and lockdowns are intended to reduce the spread of the virus – that is, to “flatten the curve” – so as not to overwhelm hospitals’ capacity to care for those with the virus.

As such, social distancing is intended to protect vulnerable segments of the population and the healthcare system itself. At the same time, direct medical care is provided to protect patients already ill with the virus.

Indeed, protecting the healthcare system itself is more critical in Israel than in other developed countries because of the system’s shortcomings in the years leading up to the outbreak. Before coronavirus, Israel’s hospitalization system was already overburdened due primarily to insufficient infrastructure and funding, combined with a distorted incentive system.

While Israel’s medical staff and technology are among the very best in the world, its infrastructure has been in a state of neglect for some time. The number of hospital beds per 1,000 population in Israel is relatively low: 2.2 versus 3.6 in the OECD. Even when adjusting for the young age structure, the number of beds reaches 2.5, insufficient to make up the gap between Israel and these other countries.

The relative shortage is even more acute in the country’s periphery (1.32 and 1.55 beds per 1,000 population in the North and South, respectively, compared to 2.36 in Jerusalem).

beds per pop ENG

With regard to funding, Israel’s national expenditure on healthcare stands at about 7% of GDP, lower than the OECD average of about 9%. The share of hospitalization spending out of the national expenditure on healthcare is declining worldwide. Nevertheless, in Israel the decline is especially sharp, and the expenditure is consistently low relative to the average in other countries. What is worse, the disparity between Israel and other countries continues to widen.

In addition to inadequate infrastructure, the mechanism by which health funds in Israel pay hospitals (the “Cap mechanism,” which is regulated by the State) incentivizes use of hospital services while disincentivizing provision of care in the community, whether in health clinics or nursing homes. This incentive structure results in limited investment in community-based infrastructure for provision of medical care, which further increases the strain on Israel’s hospitals.

As a result of these systemic shortcomings, treatment and service quality are in danger in Israel’s healthcare system, specifically in its hospitalization system. Israel’s hospital bed turnover rate is particularly high, reflecting relatively short hospitalizations on the one hand, 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 the OECD. This means that, at the outset, Israel has little slack in the hospitalization system. The crowding out of regular patients by coronavirus patients would be accompanied by a serious risk of high ‘collateral mortality.’

Thus, it appears that Israel’s fight against the coronavirus outbreak is particularly reliant on not overwhelming a healthcare and acute care hospital system that are already under-equipped, underfunded and overburdened.