Category Archives: Health

The Coronavirus Crisis and Its Impact on Women in the Labor Market: Permanent Damage or a Short-Term Setback with Long-Term Potential?

Executive Summary

With the outbreak of the coronavirus and the shutdown of the economy, many workers were laid off or put on unpaid leave. This study looks at the impact of the crisis from a gender perspective, and shows that the economic shutdown resulted in higher rates of unemployment among women than among men; although women make up just under 50% of employees in the economy, they accounted for 56% of unemployment claims between March 1, 2020 and May 10, 2020. This result is likely to harm the progress made in women’s employment rates in Israel as well as their wages.

Before the coronavirus outbreak

Prior to the outbreak of the coronavirus, Israeli women worked at higher rates than the average in the OECD alongside having high fertility rates, and the hourly gender wage gap had been declining.

  • The average employment rate among Israeli women has risen by 20 percentage points over the last 30 years and stands at 75% (84% among non-Haredi Jewish women). This rate is higher than the OECD average (66%), and employment is growing at a faster rate than in the OECD.
  • Israel has the highest birth rate in the developed world, at 3.1 children woman, and employment rates among mothers of young children are high.
  • The hourly gender wage gap in Israel decreased from 17.3% in 2008 to 15.8% in 2017.
  • In 2018, about a third of Israeli women were employed part-time compared to 13% of men; even among people working full-time, women work about 10% fewer hours than men.

Job losses during the coronavirus crisis

Between March 1 and May 10 of this year (2020), 875,000 unemployment claims were filed by workers ages 20-67; about 487,000 (56%) of these were filed by women. More women losing their jobs seems to be a global phenomenon, yet in Israel this does not appear to be because of women’s tendency to work in vulnerable sectors of the economy (as proposed in other countries).

  • Israeli women have been hit harder than men across nearly all sectors: in 18 of the 19 industries in Israel (except for real estate), the share of women filing unemployment claims was higher than their share of positions in the industry.
  • For example, in the health field, 83% of unemployment claims were filed by women, while their employment share in the industry is 76%. In the information and communications industry, 54% of claims were filed by women while their employment share in the industry is only 41%.
  • Young women were particularly hard hit by the crisis – 60.5% of women ages 20-24 versus 39.5% of men of the same age.

Women may have been most harmed by the crisis – more likely to lose their job or be sent home on unpaid leave ­– because they tend to work fewer hours, hold part-time positions, be employed in less senior positions, earn less, and have more difficulty accruing tenure as a result of periods of maternity leave.

  • Among working parents, women average 23 weekly work hours while men work 36 hours.
  • In most households, women are the secondary wage earners.
  • With schools and daycares closed, many families may have chosen to sacrifice the woman’s employment to take care of children: 46% of unemployment claims were by households with at least one child under age 18; 18% by households with a child under 2 years old.
  • Single mothers have been particularly harmed by this situation.
  • Job losses seem to be more pronounced among Jewish women, with Haredi women hit particularly hard. The share of job seekers who are women in the Arab sector did not change much between the months leading up to the crisis and during the peak in March-April 2020.

Changing workplace and household norms during coronavirus – long-term opportunities for women:

The quick adoption of teleworking during this period is likely to revolutionize the labor market, allowing more flexibility and lessening the need for a physical presence in the workplace – work conditions that may draw more women to higher paying fields where teleworking was less acceptable in the past. Additionally, more men were exposed to the routine of childcare during this time as they shifted to working from home during the shutdown, which may lead to long-term changes in the gender norms around childcare and household tasks.

  • A CBS survey conducted at the end of April found that 61% of high-tech workers and 46% of workers in the finance and insurance industry – two of the highest paying sectors – were working from home on the day of the survey, versus 15% or fewer in other industries.
  • A third of high-tech companies expressed interest in widening the use of teleworking even after the crisis passes. In contrast, the finance industry – where the lack of workplace flexibility has been noted as a principal factor influencing the gender pay gap – expressed less enthusiasm about continuing telework; the share of employees working from home sank from 46% in late April to just 10% in early June.
  • In 2018, in dual-working households, women spent an average of about 43 weekly hours on childcare and household tasks while men spent only about 27, but initial studies in Israel and elsewhere show that men are spending more time on childcare during the crisis.

A major concern arising from these trends is the potential for long-term damage to both women’s employment rates and the gender wage gap, as previous recessions have shown that job losses during a downturn can cause a long-term reduction in future earnings.

At this stage, it is most important for policy makers to ensure that the unemployment period will only be temporary for as many workers as possible so that they do not withdraw from the labor market. For employees who cannot return to their jobs, it is important to create opportunities for improving skills, which will help these workers find better employment in the future. At the same time, it is important to encourage employers to continue allowing flexibility in the workplace and remote work.

The coronavirus trajectory in Israel: planning, luck, and unintended consequences

The first wave of the spread of coronavirus in Israel has, in many respects, been viewed as a success. Compared to other OECD countries, the number of infections per capita in Israel after the first two months of the outbreak has been relatively low, falling well short of countries like Spain, Belgium, Italy, and the US. However, reference group matters. As of May 12, 21 (of 38) developed countries had a lower per capita infection rate than Israel, placing Israel squarely below average of the developed-country pack.

Where Israel has proven more successful is in its low number of COVID-19 deaths. Its (per capita) mortality rates are lower than any country in North America, Western Europe or Scandinavia, including Germany, Finland and Iceland – whose responses to the pandemic have all been praised in the international media. Here, too, however, reference group matters. Israel’s mortality rate is still higher than 13 other developed countries, all of which are in Eastern Europe, Asia or Australasia.

Over time, the growth in confirmed coronavirus cases in Israel began to slow: while the growth was in the 20%-30% range during March, by early April it declined below 10%. By early May it had fallen below 1%, and by May 10 below 0.2% per day.

Another positive sign is that, while during March the percentage of people testing positive for coronavirus increased alongside the number of tests, in April the number of tests continued to climb, but the percentage of people testing positive declined. Since mid-April, there has also been a decline in “active cases” in Israel (all cases that have not yet resulted in recovery or death) and the ratio between new confirmed cases and recoveries flipped such that there are now about 10 recoveries for each new confirmed case.

These trends are not being experienced equally across the country. Throughout April, the most rapid increases in the infection rate took place in seven Haredi (ultra-Orthodox) towns and in the three large mixed Haredi/non-Haredi cities: Jerusalem, Bet Shemesh, and Tzfat.

In our estimates—based on Ministry of Health information—we have shown that although the seven Haredi towns are inhabited by only about 5% of the national population, they accounted for 23% of all new infections nationally between March 31 and May 12. A further 32% of all new infections nationally came from the three mixed Haredi/non-Haredi cities, which contain less than 14% of the national population.

Taking a look at the overall picture, Israel has been relatively successful thus far in its public health response to the coronavirus. What are the factors that have driven these outcomes? In terms of the preparedness of Israel’s hospital system, the situation is complex. Israel falls below the OECD average on some key medical resources including curative hospital beds and nurses per capita.

However, at the same time, Israel has a relatively high number of doctors per capita. Israel also put in early and strict closures and quarantine restrictions which, though not immediately enforced everywhere, contributed to stemming the spread of the virus. In this regard, Israel was helped by the fact that it is a small, centralized country with non-fluid borders. It shares this advantage with other “good” performers like New Zealand, Australia, Iceland, Taiwan, and South Korea.

Another factor in explaining Israel’s relative success is its “demographic good fortune.” As we see around the world, mortality from COVID-19 is higher among the elderly (a fact that is not historically true for all epidemics; for example, the Spanish Influenza outbreak, around the end of WWI, disproportionately killed people between their teens and age 40). The first element of Israel’s good fortune is that its population 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.

The second aspect of Israel’s good fortune is that the infection in Israel has disproportionately spread among the young – particularly the 20-29 age group. In Italy, by contrast, the population is not only generally older, but coronavirus infections also disproportionately spread among the elderly.

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Finally, the unintended consequences of Israel’s other country characteristics, even beyond its small size and relative isolation, might contribute to Israel’s success. For example, a major risk factor for mortality from COVID-19 is cardiovascular disease. Yet Israel has much lower mortality from cardiovascular disease than the U.S. and other developed countries.

Furthermore, the additional resources and quick mobility of Israel’s security forces and a population familiar with times of national struggle, as well as institutional nimbleness and skilled professionals in a variety of fields, have helped to bolster the country’s response to the coronavirus outbreak.

Much of the coronavirus response is still ahead of us. However, it seems that in Israel, at least, some combination of planning and responsive policy, the age structure of the population and those infected, and other country characteristics, has allowed it to come out of the first couple of months of the outbreak in a relatively good position.

The War on Coronavirus and Its Financing by the Israeli National Health Insurance

This study evaluates the willingness of Israeli society to make economic sacrifices to prevent deaths from coronavirus. How much should Israel invest in the war on the coronavirus? Answering this question is important not only because of the size of the investment but also due to the intergenerational division of its burden in light of the virus’ mortality profile.

Employing the accepted approach for making Health Basket Committee decisions, Taub Center researchers use the price of adopting new medical technologies (including medications) as an estimate of the value of a “year of life,” which currently stands at NIS 340,000 (2019 prices).

Estimated value of loss of life as a share of GDP

Given Bank of Israel growth estimates, the damage to the economy as a result of the economic shutdown to prevent the spread of the coronavirus is estimated to cost about 4.2% of Israel’s GDP.

The researchers compare this to the potential cost of mortality from the virus. Using the health basket valuation for a year of life, the researchers evaluate the GDP value of the loss of years of life as the result of mortality from coronavirus according to different scenarios. Another way to understand this is as the GDP value of saved years of life as a result of preventing mortality from coronavirus.

  • Under an extreme scenario, in the absence of preventive measures, the coronavirus infection rate could reach about 60% of Israel’s population. If the mortality rates were similar to those in the Hubei Province of China, Israel would expect 84,000 deaths and a cumulative loss of life valued at more than 24% of the 2019 GDP.
  • Decreasing the pressures on the health system and lowering the mortality rates to the level of South Korea, while leaving infection rates at 60%, would save lives at a rate equivalent to about 14.9% of GDP, which is about NIS 210 billion or 1.8 months of labor across the economy.
  • Every 1 percentage point reduction in the infection rate translates into a reduction of about 580 deaths, which is valued as a savings of about NIS 2.2 billion, or about 0.15% of GDP.

Intergenerational social tension

In general, due to the way it is structured, the Israeli healthcare system transfers income between differing risk groups. Under normal circumstances, the main transfer is from those of working-age (20-59) to children and the elderly, whose consumption of healthcare services is particularly high. However, during the coronavirus pandemic, the transfer goes almost solely to the elderly.

Under normal circumstances

Even before the coronavirus outbreak there was an intergenerational transfer of income as a result of the National Health Insurance Law.

  • The capitation mechanism, by which public health expenditure is allocated to the health funds, does take into account health fund members’ age and gender, which reflects the expected cost of healthcare in each group.
  • In contrast, the health tax that finances public health spending does not depend on age or gender, but rather on income.
  • Therefore, Israel’s healthcare system transfers income not only from high earners to low earners, but also between various risk groups according to age and gender.

During the coronavirus outbreak

  • Due to the large-scale effect of the epidemic on the older community, the intergenerational transfer is significantly greater than the transfer during normal times.
  • In normal times, the intergenerational transfer can also be viewed as “insurance” by the young, since they can expect to reap the same benefits in the future when they are elderly. In contrast, the coronavirus epidemic is assumed to be a rare event that those of working-age are paying for now with little expectation of reaping future benefits, which can lead to significant intergenerational tension.


The economic damage from coronavirus predicted from Bank of Israel growth estimates – a loss of 4.2% of GDP – is significantly less than the value of the lives saved under extreme scenarios, which could reach up to about 24% of GDP in the worst-case scenario.

However, if the level of infection reaches only 10% of the population (instead of 60%, as in the worst-case scenario), the human life lost would be valued at about 3.8% of GDP – lower than the 4.2% loss as a result of the economic closure.

Assuming the mortality rate experienced in the Hubei Province of China, any intervention-free infection rate above 10-12% of the Israeli population would render the economic costs of containing the coronavirus a “worthwhile” investment in terms of GDP.

Additionally, minimizing the cost to the younger population is important not just in order to increase GDP, but also to reduce intergenerational tensions in society.

Population Projections for Israel, 2017-2040

In demographic terms, Israel is a unique country: it is characterized by an unusual combination of high fertility rates, low mortality rates, and positive migration. All of these factors lead to a rapid rise in population.


Mortality rates have been decreasing over the past decade in every population group and in almost every age group (until age 89) – an indication of an overall improvement in the health of the population.

  • Among Jews, the decline in mortality rates among men is greater than among women in every age group under age 55.
  • Mortality rates among Arab Israelis – both for men and women – have decreased less than among the Jewish population in most age groups.


The number of births in Israel is very high relative to mortality rates and in comparison to other developed countries, and explains about 80% of the annual population growth.

  • Trends from 2000 are expected to continue: a decline in fertility among Jewish women up to age 25, stability in the rate in women aged 25-29, and a marked increase in the rate among those aged 30-44 (with a slowdown in the rate of increase).
  • In the 35 to 39-year-old age group, fertility rates are expected to rise as women’s age at first birth increases, pushing subsequent births to older ages. An increasing number of these women will be single parents.
  • Among Arab Israelis, it is predicted that the decline in fertility rates observed since 2000 will continue, though at a slower pace.
  • Relative stability is expected in the overall fertility rate of the Jewish population in the coming decade, followed by a slight decline – by 2030 the total fertility rate is expected to be below 3 children on average per woman.
  • At the same time, a decline in overall fertility is expected in the Arab Israeli population – by 2040, the total fertility rate in Arab Israeli society is expected to be 2.75 children per woman, on average.
  • Due to changes in the number of births over the last 20 years, the number of Arab Israeli women aged 20 in 2037 is likely to be the same as the number in 2017, while the number of Jewish women is likely to be much higher than their number in 2017.


The overall migration balance in Israel is positive and rising. Over the past few decades Israel has also become an attractive destination for labor migrants and asylum seekers.

  • Between 2002 and 2017, 184,000 net people immigrated to Israel, the vast majority below the age of 40.
  • Given the 20% rise in immigration in 2019, it is reasonable to assume that the flow of immigration will continue to be greater than the emigration rate.

Population age structure

Israel’s current population is relatively young, both in the Jewish and the Arab sector: In the Jewish sector there are 140,000 infants versus 60,000 70-year-olds, and in the Arab Israeli sector, 42,000 versus only 5,300, respectively. In both sectors, there are more men among younger people, and more women among older age groups. However, there are three essential differences in the population structure between Jewish and Arab Israelis.

  • Putting aside the effects of migration, the Jewish population has grown slowly but consistently, while among Arab Israelis a significant decline in fertility since 2000 has made younger cohorts similar in size.
  • In the Jewish population the age structure has predictable waves and dips every 30 years, while among Arab Israelis the structure has remained relatively stable.
  • Among Jews, 8% of men and more than 10% of women were over the age of 70 in 2017. Among Arab Israeli men and women, the equivalent shares were 2.5% and almost 3.5%.

Projections for 2040

The Taub Center study makes the following forecasts of Israel’s population by 2040 using a range of realistic assumptions regarding future fertility, mortality and migration patterns.

  • The country’s population is projected to reach between 12.4 and 12.8 million people in 2040.
  • The proportion of the population that is Jewish/other is expected to fall to 78%, where it will stabilize.
  • A substantial increase in the number of over 70-year-olds is expected – from 669,000 in 2017 to about 1.41 million in 2040, with a higher rate of aging in the Arab Israeli sector.
  • In the Jewish sector, the number of births will grow at a decreasing rate during the 2020s because of the lower number of Jewish women in their early to mid-twenties (relative to those aged 30-34). By 2030, the number of births will increase sharply as a large number of women reach childbearing age. Though the fertility rate is declining in the Arab sector, large age groups have begun to enter peak fertility ages, which is likely to generate a notable rise in the number of births in the sector. Together, these two population dynamics will change the ratio of Jewish:Arab births, first reducing it, then increasing it to its current level.
  • A large group of people will age into their 50s in the next two decades – a high point for individual productivity and income, and therefore tax income and consumption for the state.
  • There is a large group of 5 to 19-year-olds who will be entering the labor market and institutions of higher education in the coming years, much larger than the group that entered these institutions in the last 15 years.


Given the above projections, appropriate measures should be taken to integrate large numbers into higher education and the labor market; preparations should be made for old-age pensions and long-term care services; and timing investment into the education system is imperative. Understanding future growth patterns for each segment of the population will help policy planning for growing populations in Israel.

Can Israel’s coronavirus response protect a neglected healthcare system?

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.

Anticipating the Total Mortality Impact of Coronavirus in Israel

The study’s authors do not expect the number of deaths from the virus to exceed several hundred. However, they highlight the risk of a significant increase in Israel’s overall mortality due to the increased diversion of medical resources – which are limited to begin with – to deal with the virus.

There is a great deal of uncertainty surrounding both the levels of coronavirus infection and its case fatality rate (that is, the number of people infected with coronavirus who die).  In addition to the direct mortality from the virus, it will almost certainly also have indirect “collateral” mortality effects, due to the reallocation of medical resources, which are limited to begin with, to address the outbreak. Despite their inherent uncertainty, mortality estimates are an important tool for policymaking.

A new Taub Center study, conducted by demographer Prof. Alex Weinreb and health economist Prof. Dov Chernichovsky, lays out the direct and indirect effects of mortality from the coronavirus pandemic in Israel. The assessment includes a number of possible scenarios based on the virus mortality rates in China and Italy and mortality rates for from other causes in Israel and the EU.

Israel’s relatively young age structure means that the mortality rate from the virus is expected to be significantly lower than the rate in Italy or the Hubei Province in China

Mortality from the coronavirus is low for young people, and increases with age. Because some of those diagnosed with the virus do not show any symptoms, estimates based on the number of deaths among confirmed cases overstate mortality. On the other hand, the fact that there is still not long-term tracking of infected people might result in an underestimation of mortality rates. In Italy, where a large share of the population is elderly, the virus mortality rate up to age 70 is lower than the rate in China but, above age 70, is 15% higher.

Therefore, the crude mortality rate in Italy is more than twice the rate in China’s Hubei Province – 5.8% compared to 2.4%. In general, Israel’s young age structure (meaning a large percentage of the population is under 65, and a much larger share than in China or Italy is under 30) indicates that the mortality rate from the disease will be lower in Israel than in China and Italy.

A series of projections apply the age-specific mortality data from China to the Israeli population in order to forecast the number of coronavirus deaths in Israel under a number of different scenarios. The range of scenarios cover:

  • Infection rates in the population as a whole of 0.1%, 0.5%, 1%, 2%, 5%, 10%, 20%, and 30%.
  • Coronavirus mortality rates that range from the same as the adjusted rates in Hubei Province to 50% and 75% reductions in those rates. These reductions reflect the anticipated improvements in dealing with the virus as time passes and as the basic ability of the Israeli medical system to cope with emergencies increases.

The scenarios posit infection rates from coronavirus ranging from a minimum of 9,300 infected people (0.1%) to 2.79 million (30%). The Taub Center study presents three mortality scenarios according to the different infection rates: at an infection rate of 0.1% with the same mortality rate as in Hubei, Israel could expect to have zero deaths among those ages 20 and younger and up to about 100 deaths among those ages 70 and older, resulting in approximately 150 virus-related deaths total across all age-groups.

The higher the infection rate, the higher the expected number of deaths: at the infection rate of 10% at the Hubei mortality rate, the number of deaths is expected to reach up to 15,400 Israelis, and at an infection rate of 30%, up to 46,000.

In each scenario, significant medical successes reducing the mortality rate to a quarter of the rate observed in Hubei Province would cut the number of deaths accordingly. But it would still result in 39 deaths at a 1% infection rate and 11,000 deaths at a 30% infection rate.

By comparison, in 2016 there were 43,964 deaths from other causes in the country. About 11,000 of these deaths were from cancer and 6,800 from heart disease – the two most common causes of death in Israel. In the worst-case scenario (infection rates about 8% with Hubei mortality rates), coronavirus could become the leading cause of death in Israel.

However, Taub Center researchers Weinreb and Chernichovsky warn of the indirect effects that may result from the fight against the virus: “The coronavirus could potentially affect other types of mortality. We expect mortality rates from other causes to rise as hospitalization of coronavirus patients increases. The Israeli hospital system is deficient to begin with, as shown by another Taub Center study published a few months ago.”
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Press Release: Anticipating the Total Mortality Impact of Coronavirus in Israel March 29, 2020

Worst case scenario – coronavirus will itself become the leading cause of death in Israel, but it will also increase deaths from other causes: this will be the indirect mortality effect of the virus

In addition to the direct effect of coronavirus on mortality rates, the indirect effects on mortality rates from other causes must also be taken into account. This is due to the poor state of Israel’s hospital system. In Israel, there are 2.2 beds for general care per 1,000 residents (compared to 3.6 in the OECD and 4.1 in countries with a similar health system to Israel). The hospital bed occupancy rate is 94% (compared to 75% in the OECD), and the average length of stay in hospitals is relatively short – 5.2 days per patient (compared with 6.7 in the OECD).

The number of visits to hospital emergency rooms in Israel is twice that of countries with similar healthcare systems. In addition, even before the outbreak of the pandemic, Israel’s general hospitals were operating at full capacity, with almost no emergency reserves, and no alternatives to hospitalization available in the community or nursing homes.

Another reason for the expansion of indirect mortality is damage the virus has inflicted on Israel’s medical personnel, causing a reduction in available medical staff (about 3,000 had been sent into quarantine by March 22, 2020), which was limited to begin with due to a lack of positions. The current situation inevitably leads to medical resources being diverted to cope with the coronavirus and is expected to come at the expense of other life-saving treatments such as heart catheterization and cancer detection.

In Italy, the burden on the hospital system has resulted in the indirect mortality of “normal” patients whose treatments have been disregarded due to the virus, and in England millions of operations have been postponed due to increasing pressure on the health system.

The authors estimate that in Israel, a moderate 2% increase in mortality rates from other causes would increase the overall number of deaths over a six-month period by about 460. At that time, a 20% increase in mortality from causes other than the coronavirus would result in an increase of about 4,600 deaths.

Both these estimates assume that the pandemic will end within six months. If it were to continue beyond that, the number of deaths from other causes would be higher yet.


The sharp increase expected in the number of deaths alongside the possible increase in infection rates bolster the Israeli government’s social distancing and economic shutdown policies – policies that should slow the spread of the virus and “flatten the curve.”

Slowing down the rate of transmission will make things easier for the hospital system’s weak infrastructure and provide the system with time to add hospital beds and other essential equipment, and for its staff to hone their clinical skillset in relation to this virus.

However, similar efforts should also be invested in protecting against mortality from other causes. Minimizing mortality from coronavirus at the cost of higher levels of indirect mortality should not be used to evade responsibility for long-term neglect of parts of the Israeli medical system.

The Acute Care Hospitalization System in Israel: From a Vision of Decentralization to a Centralized and Out-of-Control Reality

The acute care hospitalization system in Israel is in a state of crisis, due to large gaps between the system’s needs and the public resources allocated to meet those needs, and due to the deepening involvement of the State in the system’s day-to-day management, which goes against the spirit of the National Health Insurance Law.

The study deals with the regulation of the hospitalization system and government involvement in it. The researchers conclude that the deficiencies in the regulation and the over involvement of the State impact negatively on the efficient use of resources and their accessibility to the public.

These deficiencies cast doubt on the value of investment in additional hospital beds, budget, and implementation of special programs led by the State (like the program to shorten waiting times), as long as these deficiencies have not been addressed.

The Healthcare System: An Overview

The Israeli population is relatively healthy compared to other developed countries; life expectancy has continued to rise over the past decade and is higher than the OECD average and similar to the average in Belgium, Germany, the Netherlands, and Switzerland – countries that have similar healthcare models to Israel (“similar countries”).

Life expectancy, though, is not sufficient to tell us about function levels and quality of life. Indices of loss of function due to premature death and disease burden paint a more complex picture. Although Israelis fare relatively well with regard to heart disease, stroke, and dementia, with regard to the disease burden due to chronic pain and diabetes, Israelis are at a relative disadvantage.

Funding the healthcare system

Israel’s national expenditure on healthcare remains lower than in other developed countries.

  • In 2018, national expenditure on healthcare out of GDP stood at about 7.45% – lower than the OECD average and lower still than the average in those countries with similar healthcare systems (11%). Even after adjusting for Israel’s relatively young population, expenditure is still low at about 8.4%.
  • In monetary terms, average health expenditure per capita (age-adjusted) in similar countries is $5,700, versus $3,300 in Israel.
  • The public portion out of all health spending is relatively low in Israel – about 64% versus about 78% in countries with similar systems.
  • Expenditures on voluntary insurance coverage continue to rise, primarily due to an increase in the share of commercial insurance and, since 2014, at the expense of supplementary insurance through the health funds.
  • The majority of insured individuals, primarily those with private commercial insurance and multiple insurance providers, indicate that they use insurance to cover surgeries and their choice of physician (mostly to shorten waiting times) as well as the financing of medicines not available in the healthcare basket.
  • The relatively high share of healthcare that is privately financed and the rise in the share of private commercial health insurance expose the system to increased disparities, including between the center and periphery of the country, as well as to market failures that manifest themselves in a rise in healthcare prices relative to other prices.

The price of medical care

Rising medical prices exacerbate health gaps and indicate a decline in the efficiency of the system.

  • In the current decade, per capita expenditure on healthcare rose faster than GDP per capita by about 4 percentage points. This increase has compensated for demographic changes – an increase in life expectancy (population aging) and high fertility rates. However, when taking into consideration the rise in medical prices relative to GDP price rises, the adjusted per capita rise is about 13 percentage points less than the increase without this consideration: the real adjusted expenditure on healthcare per capita has fallen in the current decade.
  • The OECD ranked Israel in fifth place in terms of level of healthcare prices – with prices that are 10% more than the US level, 26% more than the average in similar countries, and 53% more than the OECD average.
    index of healthcare basket prices in 2017
    Long-term care

Israel continues to face a challenge in the field of long-term care.

  • As of October 2019 commercial insurers in Israel decided to stop offering long-term care policies outside of those offered by the health funds.
  • According to Taub Center research, based, among other things, on international experience, commercial long-term care insurance is not viable because the client base is insufficiently large to accommodate paying out claims and there is actuarial difficulty in predicting the rise in long-term care needs.

The State of the Acute Care Hospitalization System in Israel

The study  looks at the general hospitalization system in Israel and 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.

The result: a low number of beds per population relative to the OECD countries, inefficiencies due to the size of hospitals and their geographic dispersion, substantial gaps in accessibility to hospitals between the Center and the periphery, and bed occupancy rates (the average number of hospitalizations per bed per year) that are especially high which make it difficult for the system to function.

REALITY CHECK* – Healthy Israelis but an Unhealthy System

* Reality Check: A consideration of the facts, setting aside opinions, preconceptions, and beliefs
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In an international comparison of mortality and life expectancy rates, Israel’s healthcare system appears to be doing an impressive job. The infant mortality rate (3.1 per 1,000 births) is low relative to other countries with healthcare systems similar to Israel’s (based on competing health funds, like Belgium, France, Germany, the Netherlands, and Switzerland). Life expectancy at birth is also relatively high compared to those countries and stands at 82.5 years.

Nevertheless, looking to the future, it is evident that the healthcare system faces challenges in dealing with an aging population and its own inefficiencies.

Between 1995 and 2017, national expenditure on healthcare as a percentage of the country’s gross domestic product (GDP) grew only slightly, from 6.9% to 7.3% of GDP, while in the OECD it grew from 7.2% to 8.9% of GDP, and in those countries with similar healthcare systems to Israel it grew from 8.7% to 11%. While in general, countries are interested in keeping medical expenditures in check, the relatively low increase in expenditures in Israel is of concern for two reasons.

First, the aging of the population would seem to require an increase in expenditures. Second, healthcare prices have risen faster than prices in the rest of the economy; between 2011 and 2017, physician wages in the public sector increased by over 40% while wages increased by only 15% in the rest of the economy.
In addition, from 2011 to 2018, the price of private healthcare services went up more than twice the increase in the consumer price index (CPI): about 9% versus 4%. Taken together, we would have expected national health expenditures as a portion of GDP to rise, and given that they rose only slightly, this may be a sign of a worsening of service.

In general, national expenditure on healthcare is divided into two parts: public expenditure, financed by the state through the tax system and delivered by four health funds (kupot holim): Maccabi, Clalit, Meuhedet and Leumit, and private expenditure, financed by individuals through out-of-pocket expenditures and  the purchase of supplemental and/or commercial private insurance.

The National Health Insurance Law of 1995 was intended to ensure accessible medical services to all of the country’s residents on an equal basis. As the years have passed, though, and especially since the Economic Arrangements Law of 1997, there has been a decline in public financing along with a rise in private financing of healthcare which has undermined the equality principle in the law.

In fact, in Israel, the portion of public expenditure out of total healthcare expenditure has been falling, and in 2017,  stood  at 62.8% versus an OECD average of 73.4% and 78.2% in countries with similar systems.

Thus, individuals are are privately financing a greater portion of healthcare expenses in Israel than in other countries. As a result, there has been a consistent rise in the share of private expenditure on healthcare out of the average household budget: from 3.9% in 1997 to 5.7% in 2017.

The rise in private expenditure is partially a by-product of the unusual organization of the Israeli healthcare system, which has a problematic public-private mix at its core. In addition to public financing and optional private financing of healthcare services, individuals may purchase supplementary insurance services (known by the Hebrew acronym shaban) from their health fund in the public system.

About 80% of the population carry this type of insurance, which has a public character since it contains a cross-subsidy element; while monthly premiums differ based on age, there is no cost differentiation on the basis of health status. This supplementary insurance finances both treatments that are not included in the national health care basket of services and treatments that are provided through the public system but can be accessed more quickly or with greater physician choice when using supplementary insurance than they can when using only the public system.

The result is that the principle of equality laid out in the law is violated; as a result, a portion of those activities that should take place within the public system are shifted to a private system, and the funds from this insurance serve to fund the private system, alongside direct out-of-pocket commercial insurances. Perhaps even more acute than this public-private mix issue is a basic conflict that arises from the government’s various roles in hospitalization services.

The acute care (curative) hospitalization system runs for the most part as an “internal market” that began with the National Health Insurance Law in 1995. In this market, consumers receive the healthcare services they are entitled to, funded and regulated by the state, through the health funds. These health funds ensure medical services – whether through their purchase from public healthcare centers (hospitals) or by producing them themselves.

There are 58 hospitals in Israel (not including long-term care hospitals): 44 general hospitals, 12 psychiatric hospitals, and 2 rehabilitation hospitals. Of these, 19 are government-owned, 11 are privately-owned, 10 are under some form of public ownership or are owned by non-profit organizations, 12 are owned by the health funds (primarily Clalit Health Services), and 6 are owned by missions.

The result is that the system has built-in conflicts of interest. On the one hand, the state funds the health funds, which use some of these funds to purchase hospitalization services. In addition, it is responsible for regulating the hospitals, which requires it, among other activities, to be directly involved in both price setting for services sold to the health funds, and in setting quantities to be supplied to these funds at each price level.

Finally, it is the largest owner and supplier of acute care hospitalization services. Thus, in essence, the government competes with other hospitals that are dependent on it for budgeting and regulation. As a result, for example, budget constraints for government-owned hospitals may be “softer” than for other hospitals since deficits are more likely to be financed by the government. The conflicts of interest that result from this multiplicity of roles require addressing.

While Israelis enjoy relative good health at the moment, the healthcare service system is facing challenges from underfunding and basic systemic conflicts of interest that will persist unless there is a reckoning between the state’s role as financier, regulator, and service operator.

The State of the Acute Care Hospitalization System in Israel

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.

Is there a cure? Addressing challenges in Israel’s healthcare system

Israelis have benefited from the universal health coverage enacted in 1995 following the National Health Insurance Law (NHIL), and they are in comparatively good health: for example, Israel has a relatively high life expectancy at birth (82.5 years) – among the highest in the world – and low infant mortality (3.1 per thousand births) – among the lowest in the world.

However, the current health indicators reflect past investments in the healthcare system. There are signs today that the relative health status of Israel’s population may deteriorate in the future, as a result of rising tension between medical needs and resources that stems from state policy or, rather, a lack thereof.

The medical needs of the population are rising. Israel has a young but rapidly aging population. Simultaneously, Israel has rising fertility rates – already the highest among the developed nations – requiring a growing investment in pregnant women and infants.

Additionally, the country faces growing risks of modern diseases that have an impact on the entire population, such as obesity, which can be linked, in part, to increasing income disparities and rising food prices.

The challenges the system faces in response to these rising needs is reflected in its lagging funding. Worse, changes in the composition of this funding aggravates the situation.

In 2017, the share of healthcare spending in Israel stood at 7.4% of GDP (compared to 6.9% of GDP two decades prior). This figure is lower than both the OECD average of 8.9% and the 11.0% average among countries whose healthcare systems are based on sickness funds (HMO-type organizations) like in Israel. The gap between Israel and these other countries has been increasing over time, though they do not face an increase in medical needs similar to Israel’s.
Healthcare expenditure as percent of GDP

As for the composition of spending, the share of public spending out of total healthcare spending has been falling, and is relatively low compared to other developed nations with universal coverage. Public spending out of total health spending stands at about 63% in Israel, compared to 73.5% in the OECD, and 78% in countries with similar healthcare systems.

Consequently, households are spending more and more out of pocket for their medical needs: healthcare spending out of household disposable income nearly doubled between 1997 and 2016.

These developments mean that access to care in Israel, manifested, among other things, in prolonged waiting lines, has become increasingly dependent on residents’ ability to pay – contrary to the fundamental philosophy of the National Health Insurance Law.

Worse, regulations of private and supplemental insurance (which is quasi-public) mean that physicians are currently allowed to simultaneously be employed in both the public and private spheres. This results in the widespread practice of doctors referring patients from the public system to their own services in the private system, where they can charge higher prices for treatments that could largely be administered through the public system as well. This results in ethical issues, supplier induced demand for private services (including potentially unnecessary procedures), inequalities in access to care, and inefficiencies in the system.

At the same time, health care prices have increased, mainly due to rising physicians’ wages and fees. Physician wages in the public sector increased by 42% between 2011 and 2017 while the average wage rose by only 15%. This is because publicly funded institutions need to increase wages in order to compete for their own personnel moonlighting in the private institutions.

Additionally, the public health infrastructure has been underutilized because of the “migration” of medical personnel with their patients from starved publicly funded institutions to privately funded institutions for services financed by supplemental insurance.
Trends in physicians wages

The public-private mix in the Israeli health care system is an ungainly hybrid with no clear distinction between public and private, on the one hand, and no infrastructure to regulate the two, on the other. The state has been trying to confront the issues with ad hoc solutions such as preventing physicians from self-referral to privately funded care for a period of six months and organizing a special program to cut waiting lines in the public system.

To confront the challenges created by this ungainly system, one of two models (the principles of which are already in effect in various countries) could be implemented in Israel.

In the first model, known as the “separated model,” the public and private systems would exist at separate funding and infrastructure levels, administered in separate institutions. Most importantly, in this model, both citizens and healthcare workers would not move between the public and private spheres.

All patients would have to decide whether to receive their care in the public or private system for the duration of a specific treatment. Likewise, healthcare workers receiving income based on public funding would not offer private treatment.

The second model – the “integrated model” – would merge the private and public systems. In this model, every resident would receive basic public insurance with extra elective services available for pay out-of-pocket or through private insurance.

Another insurance and medical tier would be based entirely on private funding. This model can be compared to an airplane in which one might choose between flying in economy class, business class, or first class – or to fly in a separate, private plane.

In this model, the system is regulated so that people cannot pay for shorter waiting times in the publicly-based system and doctors in the integrated system can provide both basic and elective services, but cannot work at the same time in the separate, completely private system.

Regardless, because Israel’s healthcare issues are so embedded in the way the system itself functions, they need to be addressed in a comprehensive manner by fundamentally re-examining the system’s structure, incentives, and regulation.

Israel’s Exceptional Fertility

It is widely known that fertility levels in Israel exceed fertility levels in all other developed countries, and that this is the main factor driving Israel’s unusually high rate of population growth.

However, Israel’s fertility is not only exceptional because it is high. It is exceptional because strong pronatalist norms cut across all educational classes and levels of religiosity, and because fertility has been increasing alongside increasing age at first birth and education—at least in the Jewish population. From an international perspective, these are atypical patterns.

Fertility levels and trends

Israel’s Period Total Fertility Rate (TFR) in 2015 was 3.1, which is unusually high, and well above the population “replacement level” of 2.1. While there have been widespread and recognizable reductions in fertility over the last 150 year – the “Fertility Transition” pulling TFR to around 2-3 children per woman, and the “Second Demographic Transition” pulling it below 2 since about the 1970s – Israel is unique among OECD countries in not having followed the second of these international trends.

Total fertility rates ENG

  • Israel’s TFR is the highest among the OECD countries, and is almost one full child above the next highest fertility countries, Mexico and Turkey. Israel’s TFR is also much higher than that of BRIC countries and other emerging economies.
  • Despite a magnitude of differences on a number of other characteristics, Israel’s fertility is closest to that of its direct geographic neighbors, and falls between that of Egypt and Syria.
  • Israel’s TFR has never dropped below 2.8 children, and actually increased by 0.2 children between 1995 and 2015. With the exception of Israel, every country with a TFR greater than 2.0 in 1995 experienced a reduction in fertility by 2015.

There is considerable heterogeneity in fertility across different subpopulations within Israel, and the rise in Israeli fertility by 0.2 children over the last two decades is largely driven by the secular and traditional populations.

  • Between 1960 and 2016, the TFR of Christians dropped from 4.7 to 2.1; Druze fertility fell from 7.3 to 2.3 between 1970 and 2010; and Muslim fertility also dropped precipitously from an estimated TFR of 9.2 in 1965 to 3.3 fifty years later.
  • Since 2005, national fertility levels have risen—even as Muslim and Druze fertility have fallen and Christian fertility has remained stable—because of increases in the fertility of Israeli Jews (whose fertility declined slightly between 1960 and the 1990s, but has since increased).
  • Among Jews, the TFR among Haredim has fluctuated around 7 children per woman since the 1980s, and around 2.5 children per woman among the secular and the traditional who identify as not religious. However, Haredi fertility in the 2007 to 2013 period was lower than in the 1990s, while fertility in the non-Haredi Jewish population has increased since then.
  • Even among Jewish women who self-identify as secular and traditional but not religious, the combined TFR exceeds 2.2, making it higher than the TFR in all other OECD countries.

Israel’s unique fertility profile

Israel’s fertility is exceptional in a number of characteristics, including those relating to non-marital fertility, age at first birth, childlessness, and education levels.

Non-marital fertility

  • Across the OECD and other developed countries, there is a positive correlation between TFR and the percentage of children born outside marriage. However, this is not true for Israel: Israel has high fertility despite having one of the lowest rates of non-marital fertility (less than 10%, compared to about 40% on average in the OECD).
  • Nonetheless, non-marital fertility in Israel is rising. Across all births to women aged 25-39, the percentage born to never-married women increased from about 3% in 2000 to about 5% in 2016. Among never-married women aged 40+, it rose from 7% to 17% of all births.

Age at first birth 

  • Age at first birth has continued to increase in the OECD—driven largely by improved access to effective contraception and rising levels of women’s education and employment – and is negatively correlated with fertility levels.
  • In Israel, between 1994 and 2016, age at first birth increased by about 3 years for Christians and Druze, and by 1 year for Muslims, accompanied by an overall reduction in TFR in these populations.
  • Among Jews, age at first birth increased by about 2.8 years between 1994 and 2016, even as non-Haredi Jewish women’s TFR rose by about 0.2 children. This means that gains to fertility at older ages have outweighed reductions in fertility at younger ages.


  • Across countries with high contraceptive prevalence, there is no clear relationship between prevalence of childlessness and TFR. Countries in Eastern Europe tend to have both lower levels of childlessness and lower TFR than countries in Western Europe and the US, Canada, and Australia.
  • Within Israel, childlessness is comparatively low, but is more prevalent among Israeli Arabs than among Israeli Jews: 13.7% of Israeli Arab women in the 45-59 age group compared to 6.4%.


  • Women’s education has long been one of the most important determinants of fertility. Because educated women have largely continued to have lower fertility than their less educated peers, rising levels of education—desirable for many reasons at both the individual and societal level—impose a fertility “cost” on societies.
  • In most population groups in Israel, as education increases, fertility declines. However, the situation is different for two population groups. For non-Haredi Jewish men, the number of children among academics and those with lower levels of education is the same. Haredi women with an academic degree give birth to their first child at a relatively late age, but by their late thirties their fertility rates converge with those of Haredi women with lower levels of education.
    Fertility ENG

The main difference in fertility between Israel and other developed countries does not only stem from the fact that, in Israel, relatively educated families – who make up a large and increasing share of all Israeli families – are having more children than their counterparts in Europe.

It’s that the difference in fertility between college-educated Israelis and their European counterparts is much greater than the difference between non-educated Israelis and their Europeans counterparts. As a direct result of these fertility patterns, a higher percentage of children in Israel are born to older parents and to more-educated parents (compared to any other OECD country).


Healthcare in Israel: An Overview

Israel’s current health indicators are potentially quite good, but they reflect past investments in the healthcare system. Today, there are signs of a worsening in the relative health of Israel’s population, and the situation is likely to deteriorate further unless there is an increase in the share of state funding, in the overall level of health funding, and in the regulation of the system’s public-private mix.

Israel’s current health indices


The health of Israel’s population looks good by common health metrics like infant mortality and life expectancy at birth. Nevertheless, there are concerning indications for the future.

  • Infant mortality is low in Israel at 3.1 per thousand births. This is even low compared with healthcare systems similar to Israel’s in Belgium, German, the Netherlands, France and Switzerland. However, infant mortality has stabilized since 2013, which is worrisome as there is potential for still further improvement among certain population groups.
  • Life expectancy at birth is relatively high at 82.5 years, but there are signs that, in terms of life expectancy and years of healthy life, Israel’s relative status is liable to decline.

The financing of Israel’s healthcare system


Israel’s healthcare expenditure as a share of GDP remained relatively stagnant despite the country’s impressive economic growth and, in international comparison, the share of public spending out of total healthcare spending in Israel is relatively low compared with all systems with universal coverage amongst developed nations.

  • The share of national expenditure on health out of Israel’s GDP was about 7.4% in 2017, compared to an average of nearly 9% in the OECD and 11% in European countries with health systems similar to Israel’s.
  • The share of public expenditure out of total expenditure on health stands at about 63% in Israel, compared to 73.5% in the OECD, and 78% among countries with similar systems. Meanwhile, the share of healthcare spending out of household disposable income rose from 3.9% in 1997 to 5.9% in 2016.
  • Between 1995 and 2017, per capita health expenditure in OECD countries has increased on average by 2.6 times, and in countries with health systems that are similar to Israel’s, they have increased by 2.7 times. In Israel, however, per capita health expenditure only doubled over the same period.
  • Growth in health expenditure was similar to the growth in GDP per capita – about 1.7% a year, on average, since 1995. However, when taking into account changes in healthcare prices relative to the Consumer Price Index and increased needs rooted in changes in the age structure of Israel’s population, the growth was only 0.9% per age-adjusted standardized person.
    National expenditure on healthcare per capita

Problems in the healthcare system: The public-private mix and physician wages


The relatively low level of public funding and the rising share of private health funding increases health costs and widens gaps in the accessibility of medical services for various population groups in Israel.

The relative increase in health prices is high, and stems, at least in part, from the public-private mix that has developed in the system, and the effect it has on physicians’ wages. Physicians’ wages rose by about 42% between 2011 and 2017, compared to an increase of about 15% among other salaried employees in Israel. One main reason for this is that doctors can refer patients from the public system to their own services in the private system, where they can charge higher prices for treatments that could largely be administered through the public system as well. At the same time, this phenomenon means that doctors are spending less time working in the public system. Therefore, publicly funded institutions compete for their own personnel in the privately paid institutions. This drives pay up in the public system as well.

Israel can improve the state of its healthcare system by employing existing models (already in effect in various countries) of either separating the two systems or unifying regulations across them.

The separated model

In this solution, the two systems would exist at separate funding and infrastructure levels. In the model:

  • Public funding would comprise the regular health tax and payments currently transferred to the health funds plus collections for supplementary insurance. Thus, the public framework would also offer the option of choosing a broader healthcare basket than the basic one.
  • Any institutions that have contracts for supplying entitled care, and thus funding from the state, would be considered “public,” regardless of ownership, and could compete for publicly funded patients. However, they would have to meet specific criteria to receive public funding.
  • In the private system, citizens could pay for treatment through a variety of commercial insurance policies or out of their own pockets.
  • All patients would have to decide to receive their care in the public or private system before seeking treatment, and this choice would obligate them throughout the course of treatment.
  • Healthcare workers whose income is based on public funding would not offer private treatment, but be “full timers” in the publicly funded system.
  • Emergency services currently provided by the public system would not support the private system.
    The separated model

The integrated model

In this solution, the private and public systems would be merged. In the model:

  • Every resident would receive basic public insurance, combining today’s basic and supplementary coverages (as in the separated model).
  • Another insurance tier would be based entirely on private funding.
  • The “integration” comes from the fact that elective services (supplementary and commercial insurance tiers) would be provided as part of the same system that delivers the public services. The extra insurance would be for extra services but not for faster elective service. In essence, the public system would offer a publicly-funded basket and a certain degree of private choice, and public services would be received in both privately and publicly owned institutions, but residents could also pay out of pocket or through insurance for treatments not included in the integrated system.
    The integrated model



What’s the cost of health – and who’s paying?

Overall, healthcare spending as a share of GDP has remained fairly stable in Israel over the past two decades, weighing in at about 7% of the GDP, which is low when compared with other OECD countries (10% on average). Most of this expenditure is paid by the government, as witnessed by the recently passed 2019 state budget, which included NIS 38 billion allocated to the Ministry of Health.

Alongside this public spending, a significant portion is paid directly by Israelis out-of-pocket. A recent Taub Center study sheds some light on the private-public divide in the provision of healthcare in Israel.

According to the study, the share of public funding out of the total national spending on health has dropped over the past decade: from about 70% to 61%. As a result, the Israeli government’s share in financing health services is currently 15 percentage points lower than the OECD average.

At the same time, there is a growing gap between supply and demand in Israel’s public health system. On the one hand, demand for medical care has increased over the past decade due to the rapidly aging Israeli population. On the other hand, there has been a drop in the supply of medical personnel in the system, at least in the public sector: the number of both physicians and nurses per capita have dropped since the early 2000’s.

As a result of the increasing excess demand in the public sector, more Israelis are turning to the private sector for their medical needs. Consequently, private spending on health has increased in Israel: from 4.5% of total household spending in 2000 to 5.7% in 2015. A large portion of the increase has been directed towards the purchase of private insurance plans, which rose from 18% of total household spending on healthcare to 37% over the same period.


Health EN

Of the citizens who report use of private medical services, 42% said they did so primarily in order to select the physician/surgeon of their choice. Another 22% turned to private healthcare in order to get a quicker appointment.

One of the great ironies of this is that Israelis are spending more out-of-pocket in order to receive proper care in private clinics, even though the care is often administered by the same doctors who work in the publicly-funded system. What’s more, doctors are known to refer their patients from the public system to their private practices.

This can be appealing for patients who are willing to spend more for better service (not to mention more lucrative for the doctors). However, the more time these doctors spend working in the private sphere, the more public facilities such as operating rooms are left underutilized. Additionally, more hours worked in the private system further exacerbates the problem of a limited supply of medical personnel in the public system.

Furthermore, as wealthier Israelis turn to the private system, gaps in access to health services are widening between households of different income levels and between the different geographic regions in Israel. While this, in and of itself, may not be problematic, it undermines the egalitarian spirit of the Israeli health system.

In recent years there have been a number of government efforts to address the challenges facing the public health system including efforts to shorten waiting times, prohibit doctors from referring their public system patients to their private practice, and allocating money to improving the infrastructure of hospitals.

However, there is still room for reforms in other areas including expanding physician choice in the public system and enacting policies that will result in an increase in the supply of medical practitioners. Improving Israel’s public health system could help to curb Israelis’ out-of-pocket spending on medical services and reduce socioeconomic disparities in access to quality medical care.

The Health of the Arab Israeli Population

The full chapter can be accessed using the link on the right.

The chapter deals with the health status of the Arab Israeli population compared to the Jewish population in a number of areas, including the risk factors characteristic of the Arab Israeli population and access to medical services.

Longevity and quality of life among Arab Israelis

Over the past 40 years, the gap between Jewish and Arab Israelis in life expectancy has increased for those who are currently 30 years old, and in the past two decades the widening of the gap has accelerated. In other words, the relative deterioration in the health of the Arab Israeli population stems primarily from the health status of adults, especially men.

Data from the Central Bureau of Statistics’ (CBS) Social Survey indicate that about half of the sample population self-report “very good” health, both among Jews and Arab Israelis. Of the remaining half of the population, a higher percentage of Arab Israelis than Jews reported that their health was “not so good” or “not at all good.” However, the existence of health problems was reported equally by the groups. This was not the case, though, regarding the severity of the health problems – the share of those reporting a health problem that interfered with daily functioning was over 10 percentage points higher in the Arab Israeli sector than in the Jewish sector.

  • The life expectancy of the Arab population in Israel (79 years) is the highest in the Arab-Muslim world, but it is low compared to the Jewish population (82.7 years) and the OECD average (81.6 years).
  • There are substantial gaps between Jewish and Arab Israelis in infant mortality: Among Jews, the mortality rate was 2.7 per 1,000 births, compared to 3.4 among Druze, 3.0 among Christians, and 7.5 among Muslims. Infant mortality specifically, and longevity in general, are related to the socioeconomic situation of the population. In these measures too, Arabs in Israel are better off than are those in other Arab-Muslim countries.
  • The leading causes of death for Arab Israelis differ from those of Jews. Particularly prominent among Arab Israelis are birth defects, road and work accidents, and relatively high rates of chronic disease. Some of the differences can be explained by social characteristics of the Arab Israeli population such as the marrying among relatives, which increases the chances of birth defects, and high rates of smoking (44% of Arab Israeli men smoke, compared with 22% of Jewish men).

Availability and financing of medical services

Given its economic situation, the Arab Israeli population depends on public funding for healthcare than the Jewish population. This dependence is also reflected in a higher share of Arab Israelis who forgo medical treatments due to financial difficulties than the share among Jews. The CBS Social Survey shows that about one-third of Arab Israeli patients have gone without prescription medication because of financial reasons.

  • In districts with a high concentration of Arab Israelis – in Haifa, Jerusalem, and especially in the North of the country – there is a shortage of doctors and medical equipment. In addition, the average distance between Arab Israeli localities and a hospital is approximately 22 kilometers, compared to 14 kilometers for Jewish localities.
  • The share of those who report using private health services in the Jewish population is almost double that of the Arab Israeli population: about 22% compared to 11% respectively. The main reason cited for using private health services within the Jewish population is the ability to choose one’s doctor, and within the Arab Israeli population is the inability to receive public services.
  • Arab Israelis engage less in preventative measures and visit medical specialists less often, but tend to visit family doctors and hospitals more often. In other words, medical services tend to be used by this population only when health has deteriorated. This pattern is common among most low-income groups, and may also be influenced by cultural characteristics.

Arab Health EN (2)

Current Developments in the Healthcare System

The full chapter can be accessed using the link on the right.

The chapter deals with the most pressing issues in Israel’s healthcare system, including the balance between public and private funding, management of the health funds and commercial insurance companies, and preparations for Israel’s aging population.

Financing the system

Stability in overall health spending and a decrease in the share of public spending on health mean that, in order to receive adequate medical care, Israelis need to spend more of their private budgets on healthcare. These trends lead to growing gaps in access to health services between households of different incomes levels and between the different geographic regions in Israel.

  • Healthcare spending as a share of GDP has remained fairly stable over the past two decades, at about 7% of the GDP, compared to 10% on average in other OECD countries. However, the share of public funding out of the total national expenditure on health dropped: from about 70% to 61% (compared to about 77% in the OECD). These trends, in addition to the growing demand for medical services due to Israel’s aging population alongside a reduction in the supply of medical personnel, contribute to a rise in medical prices (relative to the general price index). Thus, disparities in access to health services are increasing among households with different income levels.

The government’s share in financing health services is 15 percentage points lower than the OECD average. Consequently, private expenditure on health out of total household expenditure has increased in Israel: from 4.5% in 2000 to 5.7% in 2015. The primary reason for the increase in private expenditure is the purchase of private insurance plans, which rose from 18% in 2000 to 37% in 2015. This means that Israelis need to spend more out-of-pocket in order to receive proper care in private clinics, even though the care is administered by doctors from the publicly-funded system whose work in the private sphere leaves facilities in the public system underutilized. The current situation is causing inefficiencies in the system, and gaps in access to health services are widening between households of different income levels and between the different geographic regions in Israel.

Health Intro EN (2)

Access to services and freedom of choice in the public system

  • Of the citizens who report use of private medical services, 42% said they did so in order to select the physician of their choice. Another 22% turned to private healthcare in order to get an earlier appointment.
  • The increasingly common trend of health funds (which are non-profit institutions) and commercial insurance companies acquiring private medical facilities raises questions about induced demand for privately-financed medical procedures and unnecessary spending, freedom of choice in the system, and the public-private mix in Israel’s health system.

Preparing for an aging population

  • The government has taken several steps to improve medical services for the elderly, including raising the maximum allowance for elderly long-term care to NIS 5,000, discontinuing financial means tests for children of long-term care recipients (used to determine the subsidy level for such care), and arranging the immediate transfer of those insured through group insurance via their workplace to health fund insurance.
  • Nonetheless, Israel’s long-term care system is inferior to that in other developed countries, is largely funded by private expenditure, and is fragmented across a number of government agencies.

More and More, the Universal Healthcare System in Israel is not Enough

“Healthcare” has been a major buzzword this summer. In the U.S. certainly, the debate over healthcare – what care should and should not be covered by public funding – has dominated the news cycle. Paying for healthcare is also a large topic of discussion in Israel. Despite the establishment of universal healthcare in Israel in 1995, private spending on medical services has been increasing faster than public spending in recent years, thus increasing the private share of total healthcare finance. This has contributed to disparities in access to care that can increase inequalities in health between the rich and the poor and between the “center” and “periphery” of the country.

In their study published in the State of the Nation 2016, Taub Center Researchers Prof. Dov Chernichovsky, Haim Bleikh, and Eitan Regev found that private spending on healthcare has increased since the late 1990s. In 2014, private household spending on healthcare was about NIS 906 per month, on average, or about 5.9% of the average household expenditure, as compared with 3.9% in 1997.


Public spending per person rose from NIS 4,819 in 1995 (in 2014 prices) to NIS 6,377 in 2014, with an average annual growth rate of about 1.5%. In contrast, private expenditures rose during the same period from a total of NIS 2,247 (in 2014 prices) to NIS 3,634 – an average annual growth rate of 2.6%. In other words, the growth in private spending was far greater than the growth in public spending.

Private spending on medical services varies with income. When we look at spending at the household level, rather than per individual, the highest-income households (top quintile) spend nearly three times more than the lowest-income households (bottom quintile) on health – NIS 17,352 per year as compared with NIS 5,772 per year, on average. And, those with the lowest incomes spend a larger portion of their income on health services than those with the highest incomes. In 2015, the lowest-income households spent an average of 9.5% of their disposable income on medical care, compared to 4.8% in the highest-income households. Thus, not only do low income households have less access to medical care, they also shoulder a higher burden for this care, at the expense of buying other goods or services.

Expenditure by quintile

This private spending can be broken down into two major categories: insurance premiums and out-of-pocket payments. Over a fairly short period of time, the percentage of Israelis who purchase their health fund’s supplemental (private) insurance grew from 50% to 80%, with only the poorest not allowing themselves this expenditure. Supplemental insurance is provided by the four health funds for care not included in the universal basket and is considered semi-public because they must accept all applicants, cannot rate them based on their health, and premiums vary only by age. Commercial insurance is less common than the health fund supplementary insurance, although more than 40% of the population purchases it. Some of these private expenditures are superfluous; Israelis often pay privately for services already included in public entitlements.

Unsurprisingly, private spending on supplementary care, parallel services (private services for care that is also available through the publicly funded health basket), and commercial health insurance increases as income increases. However, the fact that such a large – and growing – portion of the population with higher incomes purchases supplementary care supports the hypothesis that the public system is insufficient from their perspective, either in the type or quality of care provided.

Private insurance does indeed provide some meaningful benefits to those who purchase it, including significantly shorter waiting times for medical treatments (which are often long in the national health fund system), meaning that wealthier citizens are able not only to choose their doctor, but also to have medical procedures carried out in a far more timely fashion.

However, on a societal level, its prevalence also increases gaps in the area of waiting times. The combination of increasing private expenditure and the fact that private and public healthcare in Israel are supplied by the same providers, incentivizes the providers to prolong waiting times in publicly funded care in order to push patients into private care, which provides extra benefits to the providers.

Another important finding of the study is that private spending on supplementary care that is not included in the universal health basket (mainly dental care) and for parallel services is higher in places where public services are less available – namely, among Arab Israelis and also to some extent among Haredim (ultra-Orthodox).

In general, the National Health Insurance law is structured to give everyone equal access to a basket of basic healthcare services independent of how much each individual spends privately on health. However, the increased role of private spending in Israel’s health system confounds the notion of equal access to some extent, and the weaker population groups end up spending a greater portion of their income on private health expenditures than do those who are better off. This outcome does not seem to fully align with what the law was intended to accomplish.



Preparing for the future: long-term care in Israel

The number of elderly Israelis (aged 70 and older) is expected to double from about 610,000 today to about 1.24 million by 2035. As a result, Israel’s disability levels – which are by nature higher among the elderly – are expected to grow even faster than the growth of the general population over the same period of time.

This substantial demographic change will increase the demand for long-term care – an issue that has already proven challenging in Israel.

elderly population expected to double

Long-term care helps people of all ages who require functional, mental, or social assistance for day-to-day activities. In practice, unsurprisingly, most of the need for long-term care is concentrated in the elderly population.

Taub Center findings show that Israel’s long-term care system is inequitable and inefficient compared to developed OECD countries with similar social welfare systems (such as France, Germany, the Netherlands and the United Kingdom). Israel’s spending on long-term care relative to GDP is as high as those countries that have introduced universal long-term care insurance – yet Israel has no such universal insurance.

Israel also has a larger percentage of recipients whose long-term care is provided by the community rather than by institutions: about 19% of long-term care is provided by the community in Israel as compared with only 9% for OECD countries. While this is desirable in principle, one possible explanation for this phenomenon is that there are relatively limited options and access to institutional care in Israel.

What does all of this mean? In the near future more Israelis will need long-term care and yet our current system is not prepared for this and has many disadvantages. The total amount of money spent on long-term care in Israel – including community care, institutional care, and premiums on long-term care insurance – is estimated at NIS 15.3 billion in 2014.

Yet the government only covers a little over half, or NIS 8.3 billion, of this spending. Total private financing, by comparison, is estimated at 7.3 billion NIS (2014).

Private funding of long-term care in Israel is three times higher than the OECD average (45% as compared with 16%). Most of this private care is home-based. The money that households spend on long-term care is divided among a number of different areas: about 39% of household spending on long-term care goes to payment for caregivers (often foreign workers), about 37% goes to assisted living facilities, and about 22% goes toward insurance premiums.

Public funding, regulation and oversight for long-term care is divided among the National Insurance Institute, the Ministry of Health, the Ministry of Social Services, and the kupot holim (health funds). This fragmentation contributes to inefficiencies in the public system.

share of private long-term care triple of oecd

Thus, the burden of long-term care falls heavily on the elderly and their families. This burden is financial, physical and emotional, in part because of the difficulty of navigating the relevant bureaucracy. Moreover, in many instances family members have to scale back or quit work in order to care for their aging parents.

Most pressed are middle class households who, on the one hand, cannot afford to hire caregivers or afford privately funded assisted living facilities, and on the other hand are not poor enough to qualify for state supported institutional care.

Taub Center data show that nearly all countries with social welfare systems similar to that of Israel provide long-term care through publicly-oriented solutions, such as combining compulsory insurance payments with public funding, rather than relying so heavily on private spending, in order to provide universal long-term care options to their citizens.

In light of these findings, Researchers Prof. Dov Chernichovsky, Dr. Avigdor Kaplan, Mr. Eitan Regev, and Prof. Yochanan Shtessman offer possible options for long-term care reform in Israel, including:

• Establish a universal basic basket of long-term care services that is separate from the medical care basket.

• Fund the long-term care basket through existing public sources in addition to mandatory contributions collected from all Israeli
residents. Raising the retirement age presents another opportunity to ease the level of funding required by the government.

• Allow residents to buy private discretionary long-term care insurance to supplement their public entitlement under universal coverage.

• Establish a single, dedicated government authority that has complete responsibility for all long-term care management, rather than the current segmented system.

offer possible options for long-term care reform in Israel

These policy options would reduce the burden on families, increase public responsibility, and make the system more equal and efficient. Prioritizing reforms to the system now can ensure that Israel is better prepared to care for its growing elderly population.

Revisiting Israel’s Healthcare Priorities

The study  examines the years of healthy life in terms of disease burden, a measure that takes into account both disability/poor functioning and death.  It compares Israel to other developed countries, highlights the impact of different health conditions on the country’s overall disease burden and outlines the challenges ahead of us in this arena

Manna for all: Who can afford to eat healthy in Israel?

A basic, healthy food basket assures adequate nutrition that is essential for proper body, mind and social functioning. It is seen as a basic right in modern societies, not unlike the right to education and healthcare. In Israel, there has not yet been a meaningful attempt to define this basic healthy food basket and to examine its affordability in terms of household income, even though about 130,000 households in Israel suffer from nutritional insecurity and an even greater number suffer nutritional deficiencies.

The research by Dr. Janetta Azarieva, Ben Orion, Rebecca Goldsmith, Avidor Ginsberg, Ran Milman, and Prof. Dov Chernichovsky is a first attempt to define this basket and to analyze its significance for families of varying socioeconomic statuses.

A healthy food basket is divided into several food groups. The Ministry of Health has determined the basket according to the Mediterranean food pyramid as well as according to local eating patterns in Israel. This basket gives preference to natural, unprocessed foods that are organic – fruits, vegetables, whole grains, legumes, and nuts – in combination with relatively small amounts of animal-based foods: eggs, milk products, fish, chicken, and meat. The relative share of the food groups within the basket and the recommended daily serving sizes are based on the calculations of the US Department of Agriculture and the Israeli Ministry of Health definitions.

There are a number of advantages to the balanced diet that the basket represents. First, it is healthy, prevents heart disease and can promote longevity. Second, it is based primarily on vegetable products and so is less harmful to the environment and to animals.   Raw foods are also less expensive, in general, than processed animal-based foods products. Another advantage is that it encourages social-familial eating and home-cooked food.

In order to calculate the costs of the overall basket, various product prices were examined. Since the recommended daily serving in each food group can be made up of various components – for example, the grains food group includes bread, pasta, etc. – the median-priced food item was chosen in each group. In addition, in order to lower the cost of the basket while not falling below the minimal requirement for full nutritional value, several principles were followed. Food items that were inexpensive, accessible, and that reflected the balance between nutritional value and local consumption patterns were selected. In addition, the quantity of the food item selected reflected the minimal amount necessary to attain the required nutritional value. So, for example, expensive cuts of meat were eliminated from the basket and replaced with eggs and legumes as a source of protein.

After calculating the cost of a serving, this figure was multiplied by the number of servings recommended for each age group. The calculation for an adult was based on the average number of servings for men and women in the 25-50-year-old age group. For children, the calculation was based on the average number of required servings for each age group through age 18. The monthly cost of a basic healthy food basket for an average adult in 2015 totaled about NIS 844 per month, and for the average child, the cost was NIS 737. The share of animal-based protein and legumes represents about 40% of the cost of the adults’ basket; grains represent about 22% of the cost; and vegetables, fruit and milk products each account for about 11% of the total basket cost. The share of foods rich in fats represents about 4% of the cost of the basket. This distribution is similar to that of the recommended basket for children.

After the calculations of the cost of the basket and its components, the study looked at its cost to households. Naturally, the cost of the basket to a household increases in relation to the number of members in the household. In addition, the average monthly expenditure necessary to purchase the basket declines as household income increases, since there is a negative correlation between household size and income level in Israel.

When the population is divided into income deciles and the share of required expenditure from income is examined, there are large gaps between the two lowest and two highest income groups both in the percent of expenditure out of income as well as in the actual expenditure on food. In practice, the average share of expenditure that is required to purchase a healthy food basket for a household in the two lowest income deciles is 9 times higher than in the two highest income deciles. In the highest income decile, the average expenditure required to finance a basic healthy food basket is the lowest, since the average number of household members is the lowest: 2.46. The average family in the top income quintile has to spend about 7% of their income (about NIS 2,143) to pay for a healthy food basket for all family members, while their actual expenditure is 10%. In contrast, data on the six lowest income deciles show that they actually do not have enough money to pay for a healthy food basket. In the lowest income decile, for example, the average number of household members is highest at 4.37, and thus, the monthly expenditure that is needed to buy the healthy food basket is the highest at NIS 3,450. A family in the lowest two income deciles needs to spend about 65% of its monthly disposable income (NIS 4,965) to buy a healthy food basket while in actuality, the family spends about 42% of its income on food.

healthy food basket

It is hard to know if in the four lowest deciles (and in particular, in the two lowest deciles) the lower expenditure in practice than what would be required is the result of a preference for less expensive food (and possibly, less healthy) and a different set of priorities or whether it results from financial constraints. Nevertheless, it seems that relative to the higher income deciles, where the decision whether or not to purchase a healthy food basket is most likely an issue of awareness and preference, in the lowest and poorest income deciles, the purchase of a healthy basket is not a viable option in light of household income constraints and other vital household expenditures.
monthly household expenditure on food in Israel

Long-Term Care in Israel: Funding and Organization

Long-Term Care in Israel: Funding and Organization

The share of Israelis aged 70 and older is projected to double in the coming decades, and the needs for long-term care among this generation will increase accordingly. A new Taub Center study presents a concerning picture of long-term care and poses the challenging question: how can the healthcare system prepare to cope with these inevitable demographic changes? According to the study, the first one comparing Israel and the OECD on this topic, Israel’s long-term care system is unequitable and inefficient, and the share of private funding in Israel is three times higher than the OECD average. The authors offer several potential solutions for restructuring long-term care, including the option of defining long-term care, which is not solely for the elderly, as part of a universal basket of coverage that is protected by law and managed by a designated authority.

Israel’s population is expected to age substantially in the coming decades. The share of elderly in the population, particularly those aged 75 and older, is expected to double from about 610,000 today to about 1.24 million by 2035, while the rest of the population is projected to grow by about 31%. Consequently, the disability level, which is by nature higher among the elderly, is expected to grow by 43%, a growth rate that is 16% faster than that of the general population during this time period. While the increased life expectancy among Israelis is a welcome development, it requires better preparation for the growing health needs of those who are living longer. Illness and functional impairment drive a growing need for in-home care, and in more severe cases, inpatient nursing homes. The changing ratio between the age groups – more of those aged 70 and older compared to those aged 15-69 – is expected to exacerbate the challenges related to caring for one’s parents and increase the burden on Israeli households.

The new Taub Center study by Prof. Dov Chernichovsky, Prof. Avigdor Kaplan, Eitan Regev, and Prof. Yochanan Shtessman examines the issues of funding and organization in long-term care. In addition, the study compares the long-term care system in Israel to those in OECD countries for the first time. Based on these comparisons and the experiences of other countries, the researchers propose potential solutions to regulating the market for long-term care in Israel.

Projected population growth by age group and in the total level of disability

Only half of spending on long-term care is publicly funded, and responsibility for the area is spread across several ministries

The long-term care system in Israel faces a number of challenges, including a lack of sufficient coverage for the entire population, funding issues, a multitude of authorities responsible for matters related to long-term care, and a lack of preparedness for the future. The Taub Center study shows that Israel’s total national expenditure on long-term care – including community care, institutional care, and premiums on long-term care insurance – is estimated at NIS 15.3 billion in 2014, and the government covers about half, or NIS 8.3 billion, of this expenditure.

Public funding is currently distributed among the following agencies:
• The National Insurance Institute covers funding and subsidies for in-home nursing care for about 160,000 elderly Israelis at a cost of NIS 5.31 billion, about 64% of total public funding in this realm.
• The Ministry of Health and the Ministry of Social Services fund assisted living facilities for about 14,000 of Israel’s elderly. These cost around NIS 2.1 billion, representing about 26% of public funding for long-term care.
• Through kupot holim (health funds), the state finances complex nursing care (for those with both complex medical problems and long-term care needs) for about 1,600 elderly Israelis, costing NIS 891 million and representing some 10% of public funding for long-term care.

The fragmentation of responsibilities between the different ministries leads to inefficiency and hurts the continuity of care. Most importantly, this leads to suffering among elderly Israelis and their families. Furthermore, the right to institutional care is not universal and is means-tested. This financial structure leaves behind middle class households who are not poor enough to qualify for financial assistance for long-term care, but are not wealthy enough to afford privately funded assisted living facilities.

The burden on households is great and growing

The Taub Center study shows that household expenditures on long-term care are divided among a number of different areas: payment to employ caregivers (often foreign workers), which costs about NIS 2.6 billion per year (about 39% of private spending on long-term care) and assisted living, which costs NIS 2.5 billion (about 37% of private spending). The remaining NIS 1.6 billion in private spending, which represents some 22% of total private expenditures on long-term care, goes toward insurance premiums.

In considering these expenses, it is important to note the lack of clarity in the number of people covered by long-term care insurance. As of 2014, according to estimates by the Insurance Commissioner, 5.31 million people had long-term care insurance in Israel, including both individual and group plans. However, according to the Central Bureau of Statistics’ Family Expenditure Survey, the rate of those covered by long-term care insurance is much lower. It appears that the gap between the two estimates stems from underreporting and a lack of awareness of insurance policies that are available through both the health funds and workplaces. Regardless, not all Israelis have access to long-term care coverage. Extensive reliance on private funding combined with the sharp increase in the anticipated need will exacerbate the issue of care for family members and increase the burden on Israeli households.

Where is Israel relative to OECD countries? Less equal and less effective

The Taub Center research presents, for the first time, Israel’s long-term care situation as compared to OECD countries. The researchers suggest that, in terms of spending on long-term care relative to GDP, Israel falls near the Nordic countries (about 1.4% of GDP) – but these countries have introduced universal long-term care insurance while Israel has introduced no such coverage. Conversely, Israel’s expenditure level is higher than countries like Australia or Germany, where the long-term care system is similar to that of Israel’s. Israel’s expenditure is particularly high considering that its elderly population is smaller (as a share of the total population) than that of the other countries assessed. As such, the international comparison shows that Israel is not effectively distributing or providing care given the resources it allocates.

Another prominent characteristic in Israel’s long-term care system is that the share of private expenditure on care is nearly 45%, almost triple that of the OECD, which stands at 16% on average. The study also shows that Israel stands out in the share of care for patients aged 65 and older that is provided in the community: about 19% versus 9% for the OECD countries for which data is available. This figure may indicate a greater commitment to caring for Israel’s elderly in the community, but it could also reflect the relatively limited options and access to institutional care available in the country. In such situations, a large amount of the burden falls on families to fund care independently – whether by paying for care provided by foreign workers or by missing work days to care for their elderly family members. This extensive reliance on households furthers inequality between families at different income levels: households that are unable to afford long-term care at home or in assisted living facilities must bear the burden on their own.

As part of its international comparison, the Taub Center study examined long-term care solutions in place around the world. The data show that nearly all countries with social service funding structures similar to Israel’s chose publicly-oriented solutions, combining compulsory insurance payments with public funding and thereby enabling the existence of an efficient and equitable universal long-term care system.

Expenditure on extended long-term care by funding sources, OECD countries, 2010-2011

Government proposals for handling long-term care contradict one another

In an attempt to regulate the funding of long-term care, the government has presented two contradictory initiatives. A reform introduced by Israel’s Ministry of Finance would transition the long-term care insurance that is based on group premium payments (through pensioner associations and workplaces) to a system that revolves around individual premium payments. The Ministry of Health’s proposed reform would institute universal long-term care insurance through use of funds from the health tax and by transferring the full responsibility of long-term care to the health funds, thus reducing the burden on families. In the words of the researchers, “the two proposals fail to address the fundamental issue in the area of long-term care: the selective entitlement to institutional care and the split among the various agencies involved in organizing and providing long-term care.”

Taub Center researchers found that the Ministry of Finance and Ministry of Health proposals do not sufficiently address the primary problems associated with long-term care in Israel. The Ministry of Finance’s approach, which seeks to further privatize long-term care, has not proven effective in other parts of the world. The funding available through a private insurance system is relatively limited, as low-income earners cannot afford the premiums and high-income earners often prefer to make other arrangements, such as paying for in-home care. Additionally, private insurance premiums are relatively high due to the high risk associated with accurately projecting the growth of the population and anticipating its long-term needs. Young people do not tend to purchase long-term care insurance. A system that would require young adults to be insured would prevent them from living without care in their old age, while simultaneously enlarging the funding sources for the care of the older generation.

Regarding the Ministry of Health’s aim to universalize long-term care, at least partially, Prof. Chernichovsky states that this approach is “compatible with international trends and suitable in terms of public finance,” but noted that it lacked certain basic elements. “This proposal focuses on the medical aspects of long-term care without meeting other needs such as social support. In nearly all other OECD countries, long-term care is managed separately within the welfare system, not in the healthcare system. As such, the current proposal of the Ministry of Health does not sufficiently address fragmentation in the Israeli system and the funding sources that are required in order to expand long-term care.”

Possible paths to long-term care reform: mandatory long-term care for all, public funding from existing sources, and raising the retirement age for women today and for men over time

In light of the issues raised while mapping the system and comparing Israel to other developed countries, Taub Center researchers offer considerations for reform, including the regulation of the long-term care system. Possible options include:
• Including long-term care in the universal basic healthcare basket.

• Financing: the basic basket could be funded through existing public sources in addition to a mandatory fee collected from all Israeli citizens. Given the expanded life expectancy of Israelis, raising the retirement age presents another opportunity for funding. At the same time, given the high cost of long-term care and increased needs, Israel may need to maintain income tests for certain entitlements, as is done in a number of OECD countries.

• Private insurance: supplementary long-term care insurance may be made available alongside universal care.

• Establishment of a single, dedicated authority: the responsibility for all long-term care management could be designated to a single authority. The authority would provide long-term care services offered by independent providers and medical services through the health funds, as is the norm today. The authority could ensure continuity of care and that the system operates more equitably and efficiently than it does today.

The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.


Why Is Men’s Life Expectancy So High in Israel?

This chapter examines the factors responsible for the high life expectancy of Israeli men, with Israel ranked among the top five countries in the world in this area. World Health Organization figures show that, in 2013, life expectancy for Israeli men was 80.2 years – this places Israel at the top of world rankings alongside Sweden, just after San Marino and very close to Iceland, Switzerland, Australia, and Japan.

An analysis based on a sample of 170 countries shows that levels of wealth, education, and inequality in a country, as well as its demographic and health characteristics, are not sufficient to explain the highly-ranked life expectancy of Israeli men, which is about 7 years higher than predicted by the model.

The second model, which tests geographical characteristics and religiosity in the country, explains about 3 years of the high life expectancy. The third model takes into account mandatory military service in different countries (according to data from 1990). This model produced a number of findings: (1) In countries that had mandatory military service in 1990, life expectancy was 1.5 years higher in 2013 than in countries without mandatory service. (2) The length of military service matters. In the case of Israel, a variable representing the interaction between military spending as a percent of GDP and length of military service explained 3.6 years of life expectancy. These data support the hypothesis that military service can improve the physical fitness of men, and therefore reduces their chances of death from diseases associated with low levels of physical activity.

Mandatory military service is not a cure all, and there are many causes of death that even extensive and intense physical fitness programs will not prevent against. Some of these include diseases for which Israel ranks very poorly, such as sepsis and kidney disease. Treatment for these diseases requires regular investment in health. In addition, one cannot expect that military service will naturally eliminate the unwanted health effects of poor diet or lack of exercise, especially during childhood.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2016edited by Prof. Avi Weiss. 

A Healthy Food Basket in Israel

Access to a healthy food basket, which guarantees adequate nutrition, is essential for optimal physical, mental, cognitive and social functioning and is a fundamental right in a modern society, similar to access to education and health services. This chapter lays the foundation for defining such a basket, and analyzes its significance in terms of household budgets. This basket is built to ensure adequate nutrition at as low a cost as possible, taking into account dietary patterns in Israel. The basket includes all the major food groups: grains, vegetables, dairy protein, animal protein, legumes and fats.

On average, the required spending to purchase a healthy food basket decreases as household income increases, as in Israel, there is a negative correlation between household size and household income. In other words, in the top decile the average required spending to purchase a healthy food basket is the lowest, because the number of household members in this decile is the lowest, at 2.46. In contrast, in the lowest decile, the average number of household members is the highest. Based on the recommended number of servings per day, the average monthly cost of a healthy food basket is NIS 844 for an adult and NIS 737 for a child (in 2015 prices). Currently the composition of households in the different income levels means that the cost of a healthy food basket for a family in the top decile is NIS 2,040 per month and for a family in the lowest decile, about NIS 3,450.

A comparison of actual spending on food shows that in the upper income quintiles (quintiles 4 & 5), actual spending is higher than what would be required to fund a healthy food basket, or lower by only a few percentage points (quintile 3). In contrast, in the lowest two quintiles (and particularly in the lowest quintile), the actual spending is 22% lower than the recommended amount. It is difficult to identify if the gap in spending arises from a preference for cheaper (and often less healthy) food and different priorities or if the spending gap is a result of economic hardship.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2016edited by Prof. Avi Weiss. 

Private Expenditure on Healthcare in Israel

National healthcare expenditures can be split into two categories: public expenditures, funded by the state, and private expenditures funded by individuals (either via out-of-pocket payments or insurance premiums). The average monthly household expenditure on healthcare in Israel is NIS 906 (in 2014 prices), which represents about 5.9% of average household income, as compared with 3.9% in 1997.

The public health expenditure per capita rose from NIS 4,819 (in 2014 prices) in 1995 to NIS 6,377 in 2014, with an average annual growth rate of about 1.3%. In contrast private expenditures rose during the same period from a total of NIS 2,247 (in 2014 prices) to NIS 3,634 – an average annual growth rate of 2.6%; in other words, double the growth rate of the public expenditures.

Private spending on supplementary care that is not included in the universal health basket (mainly dental care) and for parallel services (i.e., private services for care that is also available through the publicly funded health basket) is higher in places where the availability and use of public services is lower – namely, among Arab Israelis and also to some extent among Haredim. On the other hand, the higher relative spending on parallel and supplementary services among those with higher incomes supports the hypothesis that the public system is insufficient, according to them, either in the type or quality of care provided.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2016edited by Prof. Avi Weiss. 

Introduction: Needs and Funding in Israel’s Healthcare System: General Trends

The Israeli healthcare system has many achievements to its credit, at least regarding its relative contribution to Israel’s high life expectancies and low infant mortality rates. In 2014, the life expectancy for Israeli women was 84.1 years; for men it was 80.3 years. These are some of the highest figures in the world: Israeli men rank 3rd globally, while Israeli women rank 11th.1 Israel’s infant mortality rate is one of the world’s lowest — 3.1 per 1,000 live births (2014 data), and is itself a major factor behind the country’s high life expectancy.

This introduction appears in the Center’s annual publication, State of the Nation Report 2016edited by Prof. Avi Weiss. 

Waiting for Care: Queues in Israel’s Hospitals

Waiting for Care: Queues in Israel’s Hospitals


A recent Taub Center policy brief finds that within Israel’s public hospital system, there is a large variation in the length of time patients must wait for elective (non-emergency) surgery. The study, conducted by Taub Center Director of Finance, Operations and Policy Analysis Liora Bowers and Taub Center Health Policy Program Chair Prof. Dov Chernichovsky, discusses the relationship between the length of waiting times and three factors: hospital location, hospital ownership, and the system of care (public or private).

Israel’s National Health Insurance Law (1995) established that every resident is entitled to receive healthcare within a reasonable period of time and at a reasonable distance from his/her place of residence. To date, no guidelines have been set regarding “reasonable time or distance,” and this remains a big challenge facing policymakers in the field of healthcare in Israel.

Waiting times for medical care can serve an important function in a system where health costs are largely subsidized by the state, such as in Israel. One concern in such a system is that consumers may overuse services because they do not directly feel the financial burden of doing so. Consequently, waiting times can be a mechanism for rationing care and preventing abuse of the system. However, long waiting times for emergency and urgent procedures can lead to deterioration in the patient’s condition, and long waiting times for less urgent procedures can negatively impact the patient’s ability to work and quality of leisure time, as well as their confidence in the public health care system.

While community health care is quite good in Israel, with short waiting times for doctor’s office visits and high patient satisfaction, the problem of long waiting times is prevalent within the hospital system. Between the hospitals with the shortest and longest queues in the country, there is more than a year difference in waiting times for knee replacement, tonsillectomy, and deviated septum surgery. Hospital location and ownership, and public or private insurance all contribute to how long a patient must wait for treatment.

Waiting times in Israel vary greatly by region. The large metropolitan areas of Jerusalem, Tel Aviv, and Haifa have the shortest waiting times for elective surgeries in general, while the peripheral areas – the Northern and Southern districts – have the longest. The longer wait in the periphery aligns with disparities in healthcare resources, such as the number of available hospital beds. In Jerusalem, Tel Aviv, and Haifa, the supply of beds is the highest in the country, standing at 2.2-2.5 beds per 1,000 residents, and the waiting times are 15%-30% shorter than the national average. In contrast, in the Southern district, there are only 1.3 beds per 1,000 residents, and waiting times are about 44% longer than the average.


Hospital ownership is another important factor in the length of waiting times. Bowers and Chernichovsky assessed hospitals in Israel’s metropolitan areas that are owned by non-profits, the government, or Clalit Health Services. They found that at hospitals owned by Clalit Health Services the median wait time is the longest – about 15% higher than the national average. There are various potential explanations for this finding. First, Clalit often steers its health fund members toward seeking care at Clalit hospitals, which limits their ability to choose among hospitals based on waiting times. Second, it may be that Clalit is more successful than other hospitals at limiting the impact of private funding on care, which may contribute to longer waiting times.

There are two types of private health insurance prevalent in Israel – supplementary insurance sold through the health funds that is issued without consideration of a person’s underlying medical history and priced only according to age, and commercial private insurance. Between 1999 and 2012, the share of Israelis holding both types of private health insurance nearly quadrupled, standing at about 40% in 2012. This trend stems from, and reinforces, long waiting times in the public system. The private healthcare phenomenon may come from a feeling among Israelis that they do not receive effective or efficient healthcare in the public system. However, since both the public and private system rely on the same healthcare workforce, the existence of private insurance exacerbates the issue of longer lines in the public system, which pushes even more Israelis to private care.

share of Israeli population with supplementary or commercial health insurance

Israel is not the only country struggling with the issue of long waiting times. 23 OECD countries (including Israel) have stated that waiting times are an important policy concern, and 15 of these countries have developed strategic plans to deal with the challenge. As of August 2016, when Bowers and Chernichovsky published their findings, Israel had no such plan. In September of 2016, the Health and Finance Ministries launched a program to shorten waiting times in Israel’s public hospitals over the course of 2016 and 2017. Health Minister Ya’acov Litzman and Finance Minister Moshe Kahlon say the new plan will provide money for health funds to do more elective procedures in a timely fashion, and will result in fewer Israelis turning to private health insurance plans.

As part of their study, Bowers and Chernichovsky discuss a number of policy proposals that address long waiting times for medical care in Israel. These suggestions include: establishing medically appropriate waiting time targets and incentivizing/penalizing health funds and hospitals to meet these targets; creating better integration between community care and hospital treatment; and providing payments to hospitals on a per case basis rather than a per day basis in order to incentivize treating more patients more efficiently.

The researchers assert that a combination of transparency and the reporting of accurate waiting times data in real-time, alongside the commitment of the state to establish and help meet guaranteed waiting times, will help the general public manage its expectations, lessen uncertainty, and restore patient faith in the public system.

Your Place in Line: Waiting Times in Israel’s Public Hospitals

Patients in Israel face disparities in waiting times for medical care based on the location of the hospital (periphery versus center), hospital ownership (government, Clalit Health Services, or non-profit institutions) and payment type (public versus private). These gaps demonstrate to a great extent the challenges facing the Israeli health system.  This study will discuss several possible options for improving the waiting times situation in the country.

The National Health Insurance Law provides that every resident is entitled to receive healthcare within a reasonable period of time and at a reasonable distance. However, these have never been defined. As such, a key challenge for policymakers is defining what constitutes reasonable distance and waiting times given that different circumstances lead to differing perceptions regarding appropriate waiting times. Additional challenges include developing methods for the acceptable, transparent measurement of waiting times for public care, designing a delivery system that meets waiting time benchmarks and developing incentives or penalties to reach such targets.

Live Long and Prosper: Health in the Haredi Community

Health and Haredim infographic

Most studies show a positive significant correlation between socioeconomic status and life expectancy. Put simply, on average, the higher a person’s income, the longer he or she is likely to live. Nevertheless, in a study published in The State of the Nation Report 2015, Taub Center researchers find that life expectancy is actually higher in cities and towns with a large concentration of Haredim than would be expected given these cities’ low socioeconomic status. The study, entitled “The Relationship Between Social Capital and Health in the Haredi Sector,” takes an in-depth look at this and other indicators of good health in the Haredi community and explores the factors that may contribute to this surprising phenomenon.

The Haredi community is a distinct population group in Israel for a number of reasons. Haredim comprised about 9.5% of the total Israeli population as of 2012 and often live either in Haredi-only cities or in separate neighborhoods in mixed cities. The Haredi labor market participation rate is relatively low – a little over 60%, compared with a little over 70% for the rest of the Jewish population. Furthermore, the average income in the Haredi community is notably low, with Haredi net income standing at NIS 7,500 per household, versus NIS 11,700 for other Jews (as of 2012). The Haredi household’s primary source of income is generally the wife’s salary, as many Haredi men study in kollels (advanced Talmud study institutes). In recent years, more Haredi men have been working, but the share is still fairly low and falls behind those of women in the community. Because of these factors, Haredi communities are characterized by low socioeconomic status and, given the academic literature, we might thus expect relatively poor health among Haredim.

The study points to two different indicators that demonstrate that the Haredi population is actually healthier than their socioeconomic status would predict: self-reported health status and life expectancy. Chernichovsky and Sharony show that, in the Central Bureau of Statistics’ Social Survey 2012, more Haredim reported good health than did those in other population groups and fewer Haredim reported health problems than did those in other population groups. As can be seen in the table, 73.6% of Haredim who participated in the survey characterized their health as “very good,” compared with about 50% in the other population groups; whereas only 18.7% of Haredim reported a health problem of any kind, compared with double that figure or more in the other groups. The Haredi community is relatively young and young people tend to have better health. Nonetheless, even when accounting for the young Haredi population, the differences between Haredim and other groups remained substantial: 64.6% of Haredim described their health as “very good” compared with 51-55% of (non-Haredi) religious, traditional and secular respondents.

It is interesting to note that non-Jewish religious groups (Muslims, Christians, and others) show no substantial differences in reported health status between the religious and the non-religious. In fact, a higher percentage of religious individuals of other faiths reported a health or physical problem than among the non-religious.

Figure 2 eng

Of course, self-reported survey responses are a somewhat subjective method of determining the health of a population group. It is possible that the results contain bias and that these positive self-reports are due, at least in part, to a social norm in the Haredi community that frowns on “airing one’s dirty laundry” in the context of a secular survey.

Therefore, Chernichovsky and Sharony also look at the more objective measure of life expectancy rates in cities with populations over 50,000 residents. The correlation between socioeconomic status and life expectancy can be seen clearly in the graph below, where most cities fall on or near the overall trend line. The three largest outliers – cities with longer life expectancy than would be predicted based on their income – all have a disproportionately large percentage of Haredim – Bnei Brak (95%), Beit Shemesh (46%) and Jerusalem (31%).

New Figure 1 eng

On average, the study concludes that life expectancy was three years higher among Haredi men in these three cities than would be expected based on their socioeconomic status. Among Haredi women, life expectancy was 1.5 years higher than would be expected based on their socioeconomic status.

Chernichovsky and Sharony propose that the relatively good health of Haredim is related to the fact that these communities have high levels of social capital. Social capital implies social trust, norms, and networks and includes aspects of life common to the Haredim: a high number of social relationships, high levels of satisfaction with family relationships, strong social support systems, and high levels of volunteering. Also, a relatively low percentage of Haredim report feelings of loneliness (less than half of the percentage reporting feelings of loneliness in other population groups).

The findings regarding the unexpectedly good health status of Israeli Haredim, given their socioeconomic standing, provide additional support for the hypothesis that social cohesion at any level of income supports good health and higher than predicted life expectancy in low-income communities.

The Relationship Between Social Capital and Health in the Haredi Sector

This chapter seeks to identify the possible reasons for the relatively good health status of Haredim (ultra-Orthodox Jews) in Israel. A comparison between Israeli cities shows that those cities characterized by large concentrations of Haredim also enjoy higher life expectancies than their socioeconomic rankings would predict. Moreover, a Central Bureau of Statistics survey found a substantially higher percentage of self-reported “very good” health status among Haredim than among other sectors. The chapter maintains that these data may be related to accepted parameters of social capital, that is, to attributes common among the Haredi sector that have a beneficial impact on individual and societal functioning. Some of these attributes are religious in nature, such as prayer and a faith-informed outlook on life, while others characterize Haredi society, i.e., close relationships with family and friends and a high degree of community involvement (as expressed through volunteering, for example). These hypotheses were examined in the chapter using regressions that test the influence of different factors on self-reported health status. It was found that religious observance has a significantly positive effect on the probability that a subject will report “very good” health status.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2015, Dov Chernichovsky and Avi Weiss (editors).

Mental Health Reform: Pitfalls and Prospects

This reform, which shifts responsibility for inpatient and ambulatory mental healthcare services to the health funds (HMOs), involves a significant change in mental health services in Israel. This paper examines the possibilities and the pitfalls that are connected with the implementation of the reform. It analyzes the issues facing those instituting the reform and the State, issues which remained unanswered or undecided at the time of the decision to implement the reform and will now have to be addressed. For example, it must be determined whether the targets set for the optimal number of patients in treatment is satisfactory, that the distribution of services is equitable, and that adequate community-based alternatives to inpatient treatment are developed and will be able to prevent unnecessary hospitalizations. In summary, the paper lays out recommendations for responding to these issues, as well as others that might arise in the implementation of the reform, including: administrative and financial resource allocation for independent research and evaluation, as well as for advancing the reform; the establishment of a special administrative body in the Ministry of Health that will be responsible for the implementation; and the strengthening of regulatory bodies that will be put in place for supervision and oversight of the reform process

Financing and Work Force Issues in Israel’s Healthcare System

Both of these problems pose a risk to Israel’s good performance with regard to its population’s health. In contrast to the trends in the healthcare systems of other developed countries, including the United States, there is a continuing shift towards greater private funding in the Israeli healthcare system. This trend widens the disparities in access to health services and widens overall gaps between income groups. These changes in the healthcare system are the result not only of the diminishing share of public funding, but are also due to the fact that a large portion of private financing occurs via out-of-pocket expenditure. Although some 80 percent of the population has supplemental insurance in Israel, this insurance does not contribute sufficiently to reducing direct out-of-pocket expenditure, unlike in other countries where the private insurance system is more developed. The aging of the physician population is another issue. While it is beneficial that older physicians bring with them greater experience to the healthcare system, considering the overall decline in the number of physicians relative to the population in Israel, this trend could lead to a further drop in the supply of practicing physicians.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2014, Dan Ben-David (editor).

Health Status and Healthcare System Budgeting in Israel in the Context of Disability-Adjusted Life Years (DALYs)

While accepted metrics in the healthcare system in Israel and in general often evaluate mortality, the Disability-Adjusted Life Years measure estimates disease burden that is caused either by premature death or by morbidity and disability, thus giving a more complete picture of health status in the country. An examination of the health status of Israelis shows that while cardiovascular diseases and major cancers are responsible for 42 percent of mortality, their contribution to overall disease burden as measured by DALYs stands at only 18 percent. In contrast, orthopedic problems and major depressive disorders, which contribute to 19 percent of overall disease burden, are almost non-existent among the causes of death. In terms of budgeting for the public healthcare system, current allocations for the 15-54 year-old age groups, populations which are very important in terms of their role within households and in the labor market, are relatively low compared to this group’s share of disease burden. This study also found that the Health Basket Committee dedicates almost half of its annual budget to cancer-related illnesses and treatment, which are among the main causes of mortality. Nonetheless, new funding for treatment of orthopedic disorders and mental health issues is minimal due, in part, to the narrow mandate of this committee.

This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2014, Dan Ben-David (editor).

Is There a Doctor (or Nurse) in the House?

Some actions have been taken in recent years to reverse these trends and it remains to be seen if these will be sufficient. Even the great advancements in technology have not changed one fundamental fact about healthcare – providing medical services requires significant manpower.  The field is composed of a broad workforce spanning nurses, specialists, medical technicians, pharmacists, and much more. The effectiveness of a healthcare system depends greatly on having a sufficient and available workforce to meet demand where and when it occurs.  Shortages can cause significant pain for patients and inefficiency in operations.  However, upgrading the supply of healthcare professionals, particularly physicians, requires years of foresight and planning due to long length of training.

Prof. Dov Chernichovsky, Chair of the Taub Center’s Health Policy Program and an economist at Ben-Gurion University, and Taub Center researcher Eitan Regev published a new paper in the Center’s State of the Nation Report 2013 discussing trends with regards to the supply of physicians and nurses in Israel as well as the investment being made today to educate professionals who will work in these fields in the future.

Over the last couple of decades, Israel has benefitted from a high physician-to-population ratio in comparison to other developed countries, namely due to the great immigration wave of doctors from the former Soviet Union.  Starting in the late 1990s, the share of physicians relative to the population began dropping in Israel, while the share in the OECD has been rising.  Despite the decline, Israel still remains slightly ahead of the OECD with 3.0 physicians per 1,000 standardized persons (i.e., after adjusting for the size of different population age groups) compared to 2.8 in the OECD.

These figures, however, do not provide insight into the distribution of physicians among specialties or across the public and private healthcare systems.  As discussed in the Taub Center’s recent policy brief “Hot Issues in Israel’s Healthcare System,” by Liora Bowers, the Israeli Medical Association has identified anesthesiology and geriatrics as having current shortages, and has warned of potential future shortages in general surgery, internal medicine and pediatrics, among others.  Similarly, the State Comptroller’s 2009 report indicated that Israel had 30 percent fewer anesthesiologists than the recommended standard, which it cited as partly responsible for long waiting times on elective surgeries.  Furthermore, there is concern that physician specialists are increasingly drawn towards work in the private, rather than public, healthcare system.

Chernichovsky and Regev examined the causes for the declining share of physicians in Israel.  As shown in the first figure, Israel is educating far fewer physicians than other developed countries.  OECD countries produced 11 medical school graduates per 100,000 people in 2010, compared to only 4 in Israel.

Healthcare Fig 1

While these figures may be worrisome, there are some other relevant factors to consider.  First, Israel currently has significantly more students starting medical school today than it has had in previous years.  Part of this increase comes from the opening of Israel’s fifth medical school in 2011, which welcomed 125 students (students holding bachelor’s degrees or those who completed three years of study at European medical schools) via two shortened tracks of study.  There are also other initiatives underway to increase the number of students and streamline the medical education process.  These include the initiation in recent years of several four-year medical school programs targeted at students already holding an undergraduate degree and relevant biology coursework, as well as a reduction by six months in the length of medical school education.

Because entry to medical school in Israel is extremely competitive and capacity is limited, hundreds of Israelis graduate from medical schools abroad, in places such as Hungary, Romania and Italy, many of whom return to Israel after completing their studies.  Israelis studying abroad are subject to a different licensing exam to practice medicine in Israel than their counterparts who studied locally.  Graduates of medical schools in the U.S., Canada and the U.K. are exempt from this exam, and there has been some discussion on broadening the list of countries whose graduates are exempt.  In early 2013, the Knesset voted to exempt Israeli graduates of foreign medical schools from the Israeli licensing exam, if they have passed the equivalent United States licensing exams.  The various initiatives described above are expected to have a noticeably positive impact on physician supply in the coming 6-8 years.

Chernichovsky and Regev highlight that Israel’s healthcare workforce challenges are even greater in nursing than they are for physicians.  As indicated in the second figure, while the U.S. and other developed countries have seen an increase in their nurse-to-population ratio over the last decade, Israel’s numbers have slightly declined over this period.  At 4.9 nurses per 1,000 people, Israel had less than half of the supply of nurses than the OECD in 2011, which stood at 10.3.

Healthcare Fig 2

The third figure shows that the low supply is exacerbated by an extremely low – and declining – number of nursing graduates in the country.  Israel produced only 11.2 nursing graduates per 100,000 people in 2011, compared with 42.8 in the OECD. Over the past decade, Israel has seen a 43 percent reduction in the rate of nursing graduates.  As a result, the average age of the nursing workforce has risen, with half of Israeli nurses now over the age of 45.  The two primary factors underlying the declining rates of new graduates are relatively low wages that do not provide sufficient incentive for entering the field, and a heavy workload due to the nursing shortages.  The issues of high work load and low number of graduates are mutually reinforcing and have led to a deteriorating situation in recent years.  A nurses strike in 2012 led to a new agreement resulting in significant wage increases.  The coming years will reveal if the compensation increase was sufficient to spur a renewed interest and higher enrollment in nursing studies.

Healthcare Fig 3

Overall, the findings presented in the Taub Center study paint a mixed picture of the situation of the healthcare workforce in Israel.  On the one hand, Israel has experienced a declining supply of physicians and nurses in recent years, while other developed countries have seen a growth in supply.  Furthermore, the number of medical school and nursing graduates in Israel is one-half and one-quarter that of other OECD countries, respectively.  The fact that Israel’s population is relatively young, and therefore requires fewer health services, mitigates some of the impact of the low supply of healthcare professionals.  In addition, there have been concrete steps taken to alleviate the physician shortages, ranging from increased medical school capacity to the relaxation of licensing regulations for medical students learning abroad.  The situation in nursing is worse and it remains to be seen whether the new wage agreement signed in 2012 will incentivize entry into the field and help reverse the particularly concerning decline in nursing graduates.  Continuing to address these workforce challenges is crucial to ensuring that the Israeli healthcare system can provide high quality, effective and accessible care to its citizens.

Hot Issues in Israel’s Healthcare System

The Israeli healthcare system has long produced good comparative healthcare outcomes on a range of indicators – low infant mortality, high life expectancy, effective chronic disease management, and good primary care quality. These results are consistent with the country’s longstanding history of developing and supporting community and primary care with a strong public health orientation. Due to various concerns about public hospital care in Israel, Minister of Health Yael German commissioned a 13-member “Committee to Strengthen the Public Health System” in June 2013 to recommend policy and operational changes to the healthcare system.

This brief provides a short context on healthcare system issues relevant to the German Committee discussions.

Trends in Israel’s Healthcare System

However, the healthcare system continues to play a role in widening income gaps; it also continues to exhibit a loss of efficiency evident in the rise in healthcare costs that exceeded the rise in the consumer price index.  These trends are related to an ongoing policy of substituting public funding with private funding of the system, and to promotion of private service-provision arrangements via supplemental insurance.  Continued decline in the share of public funding of the health system is liable to further impair the public system’s ability to address increases in need of a wealthier and fast-aging population – rather than reinforcing the system especially during a period of economic crisis and worsening income disparities, which are known health risk factors.  In light of this, the chapter also discusses possible supplemental insurance arrangements that might improve the situation.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2013.

Reforms are Needed to Increase Public Funding in Israel’s Health System

However, a decline in the ratio of physicians to population that reached a modern low in 2006, an approximate ten-percentage-point decline in the share of publicly financed health care between 1995 and 2009, and legislative mandates that favored private insurance have altered Israel’s health care system for the worse. Many Israelis now purchase private health insurance to supplement the state-sponsored universal care coverage, and they end up spending more out of pocket even for services covered by the entitlement. Additionally, many publicly paid physicians moonlight at private facilities to earn more money. In this article I recommend that Israel increase public funding for health care and adopt reforms to address the rising demand for privately funded care and the problem of publicly paid physicians who moonlight at private facilities.

In Hebrew only. This article was originally published in English here and is available for Health Affairs members or for purchase. 

The Law for Rehabilitation in the Community of Persons with Mental Disabilities: An Interim Appraisal

Besides reviewing the reform’s accomplishments and its contribution to the changes that have occurred in mental health services, the article also assesses the dangers it has to contend with.  The analysis focuses on the system’s clients, budget, personnel, and services — and on its functional environment.  In the course of the decade, the mental health rehabilitation services have considerably expanded, resulting in significant savings to the state; nevertheless, rehabilitation services cover only about one-fifth of the target population and many of those entitled to a rehabilitation service package fail to secure it.  It also bears mention that there has been erosion in the average budget per rehabilitation recipient.  In order for the reform to achieve its objectives, the services and budget must be adapted to the changing character of the mentally disabled, as well as to the special needs of specific population groups.  Such problems as the quality and training of personnel in the rehabilitation network and market failure and loss of control by the regulators over a system should be dealt with and avoided.  Lastly, the chapter discusses the mutual dependency between the rehabilitation service system and the Insurance Reform, due to start in 2015, emphasizing the importance of the rehabilitation system’s efficient and effective functioning to the success of that reform and to improvement of the mental health services in general.

This paper appears in the Center’s annual publication State of the Nation – Society, Economy and Policy 2013.

Israel’s Population: Deceptively Young

Due to Israel’s high birth rate and relatively young immigrants prior to the 1990s, its population is characterized by a rather low share, about 10 percent of the general population, of elderly persons (defined as those aged 65 and over).  However, the proportion of older seniors within this group (those aged 75 and over) is relatively high, due to Israel’s comparatively high life expectancy.  Moreover, Israel’s rate of aging in the population is high compared with that of all other developed countries – and it has recently taken off with increasing health standards and rising longevity.

The first figure depicts the underlying demographic change.  Over the past twenty years – between 1990 and 2010 – the ratio of elderly persons to working age adults between the ages of 25 to 64 has been relatively steady, with approximately 160 elderly persons per 1,000 working age adults.  In the next twenty years – from 2010 to 2030 – this ratio is expected to steadily increase each year, reaching 230 elderly people in Israel for every thousand people of working age in 2030, an increase of over 40 percent in just two decades, probably the sharpest among developed economies.


This demographic picture indicates a substantial increase in future long-term care needs.  Older seniors tend to have multiple and complex health problems.  These problems often manifest themselves in functional decline and in a loss of independence in daily living, resulting in a growing need for hospitalization, facility-based care or constant caregiving in the home.  A forthcoming Taub Center policy paper by Dov Chernichovsky, Avigdor Kaplan, and Yohanan Stessman, partially summarized in the latest Taub Center State of the Nation Report 2011-2012, describes some of the challenges Israel faces in providing adequate funding for long-term nursing care.

The second figure gives an idea of what this heightened aging of the population could mean for future expenditures.  The horizontal axis shows the percentage of elderly over the age of 80 in the population in a variety of OECD countries; the vertical axis shows expenditure on long-term care as a fraction of GDP.  Israel’s currently low share of elderly in the population makes it one of the left-most points on the graph.  But on the vertical axis, Israel is near the OECD average, spending 1.4 percent of its GDP on long-term care.  However, when taking into account the relatively low share of those aged 80 and over in the population, Israel actually spends a comparatively high proportion of its GDP on this form of care.  While this can be an indication of high quality, it may also signify inefficiencies in funding.


How is this care funded?  Long-term care in Israel is characterized by a relatively large share of private funding.  Chernichovsky, Kaplan, and Stessman found that about 50 percent of care in Israel is privately funded, including both out-of-pocket expenses and private insurance.  Of the countries examined, only Switzerland has a higher share of private funding.  The OECD comparable average is only 16 percent, meaning that Israel’s private funding share for long-term care is three times higher than the OECD average.  And, a substantial portion of this spending is out-of-pocket and not insurance premiums.

One uniquely Israeli finding was that a remarkable 42 percent of private expenditure for continuing care is spent on the employment of foreign workers as personal caregivers to roughly 57,500 elderly people receiving assistance.  Partially as a result, Israel’s percentage of those cared for in the community and at home is especially high, at 86.5 percent of all Israeli long-term nursing care patients, compared with an OECD average of 50.7 percent.

The authors question the sustainability of current privately based funding of long-term care in Israel in the face of anticipated developments: an aging of the elderly population with rising needs on the one hand, and a likely decline in private funding capabilities, on the other.  In response to these same concerns, two government ministries – the Ministry of Finance and the Ministry of Health – have proposed different approaches for future funding of long-term nursing care in Israel.

The Ministry of Finance has championed turning the long-term care insurance managed by Israeli health care plans (health funds) that is based on age related but not individual risk-based subsidies into premiums based on individual risk.  As a result, weak groups currently subsidized by the stronger groups would have to pay higher premiums.  This approach runs counter to international trends.  International experience, including that of the United States, clearly indicates that the private insurance market cannot contribute substantially to resolving the issue of long-term care funding; as a result, the developed countries have given up on any private-market based solution to the problem.

By contrast, the Ministry of Health’s approach aspires to expand the universal healthcare coverage to include long-term care insurance for those currently lacking it with payment on an equitable basis.  This approach in financing the care conforms to international trends and to principles of equity and efficiency, but the idea of integrating this in the universal healthcare coverage runs contrary to the rather common approach in other developed countries (except Belgium and Switzerland) of not integrating long-term care with healthcare.

Among the solutions proposed in the study:

  • A pre-defined basket of long-term care services could be provided in the form of an allowance – in cash and in-kind, depending on the circumstances – funded by pooling all public resources that currently exist for long-term care from the various ministries and agencies, plus new mandatory insurance.
  • Some of the private, health fund-based insurance could be converted to this mandatory insurance, with the state making up the difference for less affluent sectors, on a means test basis.
  • Transparent criteria for eligibility and for various levels of aid could be created and administered.
  • All such arrangements would be managed by a government authority in charge of managing and administering the public long-term care budget.
  • Private insurance to supplement the public arrangement would remain intact.

Israel’s unusually low ratio of elderly to working age population eases the burden of financing good long-term care for its elderly population.  But anticipated demographic and economic changes will require the government to be more proactive in creating the conditions for continued high-level care for Israel’s aged.


Israel’s Healthcare System

Manpower increases were recently authorized for the system, and access to healthcare in Israel’s periphery is expanding.  Some of these measures represent promises to the public which, hopefully, the government will be able to keep.  These changes do not, however, have the power to bring about structural change in terms of financing, organizing or managing the system.  The recent wage agreements may conceivably increase the share of public funding in Israel’s national health expenditure; but such a development would merely reflect a lack of long-term government policy.  The public system is eroding and administered from crisis to crisis.  An analysis of household healthcare expenditure indicates that those who need and are able to leave the public system do so.  Decades of achievement in the realm of equity and efficiency are eroding, and public health may ultimately suffer.  Within the overall context of worthwhile initiatives and long-term policy with far-reaching consequences for Israel’s social services system, an assessment should be made of the reform proposed for long-term care insurance in Israel – a sphere that by default, rather than by a process of careful consideration, is regarded as a healthcare system issue.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2011-2012.

Israel’s Healthcare System

Rather than aiding the public part of the system to cope with the challenge, the State has exacerbated the situation by reducing the share of public funding and by encouraging the private insurance funds to provide these services.

The result is an uncontrolled rise in service demand in the private part of the system that is largely met by personnel who are also employed in the public part. Thus, not only has the healthcare system declined in efficiency, reflected in a relative inflation of healthcare prices due to double pay and waste, but the situation has also worsened in terms of income distribution and access to medical services.

This deterioration also manifests in growing disparities between poor and rich, between central Israel and its periphery, and between incomes of interns, who cannot do privately paid work and those of specialists who can. Worst of all, early indications of these systemic flaws are becoming apparent at the public health level, as seen in a rise in infant mortality among the Bedouin of the Negev and other weaker groups in society.

This appears as a chapter in the Center’s annual publication State of the Nation Report 2010.

A “Malignant Growth” in the Share of Private Expenditure for Healthcare and its Price

The situation exposes the system to increasingly to market failures and which are particularly problematic in Israel due to the unique arrangement whereby demand for privately funded services is encouraged in the publicly  funded healthcare system through privately paid supplemental insurance. Standing to gain extra incomes from privately paid MDs leave unduly their publicly paid posts, establish potentially unneeded private practices, and possibly adopt unnecessary technology.

These changes are expressed in the relative inflation in prices of privately paid healthcare that is spilling over into the cost of the publicly funded system. This inflation indicates a loss of efficiency and declining equity in healthcare. The public pays more but does not receive more services, comparable to the increase in spending. In terms of equity, rising prices relative to other prices and income also decreases accessibility to services which is harmed to start with by the increasing need for private funding to buy care. More than this, these developments are likely in the end to harm the public’s health and public health achievements. This is the story of the United States versus the other developed countries including Israel up until now. Despite the superiority of the American system from the perspective of technology and the level of resources invested in healthcare, its outcomes are modest by every indicator. The “Americanization” of the financing of healthcare in Israel which is currently expressed in inflation and its implications, brings Israel closer to the inferior elements in the American system.

Dental Care in Israel – Still Out of Bounds

Israelis have had national healthcare coverage since 1995. Even before then, access to basic medical care was almost universal and insurance covered a large portion of the population. This legacy of wide accessibility to basic medical services for the whole population has contributed to comparatively high levels of health in Israel.

Dental care has been an exception. Access to it has remained a matter of household ability to pay. As a result, even basic dental treatments, including preventive care, are often beyond the reach of families with limited means. And, indeed, contrary to general health levels, dental health in Israel is inferior to that in other developed countries.

Prof. Dov Chernichovsky, Chair of the Taub Center’s Health Policy Program and a professor at Ben-Gurion University, and Dr. Guy Navon, from the Bank of Israel and a Policy Fellow in the Program, recently published a paper focusing on Israel’s dental health situation (Dental Care: The Burden on Households – Implications for National Health Insurance, Taub Center Policy Paper No. 2010.10) using survey data from the Central Bureau of Statistics. They found that with no public dental insurance, and with even private insurance options limited for the average resident, spending on dental care has become a central medical expenditure item for Israeli households. Dental care for most elderly is often quite prohibitive financially.

The first figure shows the amount spent in 2008 on dental care for families who reported such expenditures. The amounts are remarkably similar across the income spectrum. Spending by the richest households is less than 25 percent greater than that of the poorest households, even though the former’s income level is about five times as high. This strongly suggests that levels of dental expenditures are made according to need and are clearly regressive.


This does not mean that poor families are not compelled to curb their spending on dental care. The second figure shows the percentage of families reporting that they had expenditures on dental care during the year; the percentage for poorer families is smaller, suggesting that they often simply do without.


The skimping on dental care evident in the lower quintiles has a disproportionate impact on children, insofar as children up to the age of 18 constitute 50 percent of the members of the poorest households but only 20 percent among the wealthiest households.

On the basis of their findings, Navon and Chernichovsky propose that Israel should include dental care in universal healthcare entitlement for at least the population up to age 18 and for the needy elderly. Their research leads them to conclude that this would increase the performance of the Israeli healthcare system, would not increase costs, and would enhance both social and economic equity.

Dental Health: The Burden on Households – Implications for National Health Insurance

Expenditure on private insurance is common amongst a very low percentage of households and primarily in the higher income quintiles. While it improves their situation it also serves to widen inequalities in access to treatment as well as income disparities and general demand. The lowest income quintiles cope with the expenditures for routine dental care – which represent some 7% of their overall household expenditure when they need treatment and especially treatment for children – and they are not able to deal with expensive treatments related to surgeries or reconstruction. The lowest two quintiles almost completely forgo dental health treatments.

The study recommends a process for including dental health care in National Health Insurance, with the required budgetary back-up that will be required. This process is likely to bring real relief in the medium and long-range in terms of an improvement in dental health in Israel and a savings in national expenditure for dental health.

*Publication only in Hebrew.

Changes in Healthcare System Allocation to Promote Equality between Center and Periphery: Is it for Real?

This represents about 80 percent of the total public budget for financing medical services in Israel – the services given by the sick funds. The new formula is intended primarily to narrow the growing gaps between the Center and the periphery geographical regions. This much needed change would bring additional money and resources to the periphery. Unfortunately, the implementation of this change will not bring relief to the periphery mainly because it is not based on the representation of the different sick funds in the periphery, on their ability to compete, and their ability to move resources from the Center to the periphery while expanding their services.

The “Americanization” of Healthcare Financing in Israel

Both in terms of healthcare outcomes and costs, the United States has underperformed over the last four decades when compared with the average developed country of the Organization of Economic Cooperation and Development (OECD) as well as relative to Israel, a recently admitted OECD member.  Healthcare costs have been growing faster in the United States than in the other developed OECD countries, including Israel, while the health outcomes have been improving faster in the OECD and Israel.

These are some of the findings in a recent Taub Center study by Prof. Dov Chernichovsky, Dr. Ronni Gamzu and Dr. Guy Navon that appears in the Center’s annual State of the Nation Report.  Prof. Chernichovsky is the Chair of the Center’s Health Policy Program and a senior staff member at Ben-Gurion University of the Negev.  Dr. Gamzu is the recently appointed Director-General of Israel’s Ministry of Health and was formerly a Policy Fellow in the Taub Center’s Health Policy Program and Director-General of Ichilov Hospital (the study was conducted prior to his appointment).  Dr. Navon is a Policy Fellow in the Center’s Health Policy Program and a researcher at the Bank of Israel.

Health expendiitures Fig 1 Eng
Focusing on costs, the first figure shows that healthcare expenditures have risen in the United States from 7 percent to 14 percent of the Gross Domestic Product (GDP).  This compares with a relatively modest increase from 5 percent to 8 percent of GDP in the 22 developed nations of the OECD and in Israel.  Thus, from a cost perspective, Israel’s record has closely matched the rest of the developed OECD countries – excluding the U.S. – that provide universal health coverage.  While cost increases have not been as high as in the U.S., life expectancy has improved in Israel even more than the OECD average.  In retrospect, Israel appears to have received relatively good value for its expenditures on healthcare since the 1970s.

However, an “Americanization” process in Israel’s healthcare system has been raising concerns of a problematic future. As is evident in the second figure, the public share of total health care expenditure in Israel has been falling steadily, deviating from the OECD average and converging toward the relatively low American share.  There is ample evidence that private financing of health care is much less effective than public financing in controlling costs, and indeed in this same period Israel has begun to experience a relative rise in healthcare prices.

Health expenditures Fig 2 Eng

The inflation in healthcare prices reflects declining efficiency in Israel’s healthcare system. It means that the increase in healthcare costs passed on to the public has been greater than the increase in services it received. Inflation also leads to declining equity. The fact that healthcare prices have risen more than other prices and incomes aggravates an already difficult situation caused by the growing share of private healthcare financing.  The merging of these two factors reduces access to care while increasing the burden of healthcare spending on the budgets of middle, and particularly, low income households. Furthermore, these developments may eventually undo many of the country’s achievements in health outcomes.

In some respects, this situation is reminiscent of the diverging healthcare paths in the United States and those of other developed countries – including Israel. Despite the superiority of the American system from the perspective of technology and the level of resources invested in healthcare, its outcomes are relatively modest. The “Americanization” of healthcare financing in Israel which is currently only expressed in inflation, and not yet in terms of health outcomes, brings Israel closer to the less desirable elements in the American system: high cost coupled with ever increasing disparities in accessibility to care.

How Healthy?

The Israeli health system has shown notable achievement in improving outcomes for all citizens both in absolute and relative terms compared to other developed countries, and also in narrowing the gaps within Israel. However, the disparity in health outcomes, particularly between Jewish and Arab Israelis, is still considerable, and this gap is one of the challenges that the system faces going forward. The Taub Center’s The State of the Nation Report: Society, Economy and Policy 2009 provides a detailed examination of Israel’s health system (Dov Chernichovsky, “The Healthcare System”).  This article highlights some of the main findings.

Health can be compared along many different dimensions, but one of the most useful measures is life expectancy at birth. This is a very popular overall measure of national health and it is the public health indicator used in the UN Human Development Index.

How does life expectancy in Israel compare to life expectancy in other countries? Three decades ago, in 1980, life expectancies for Israeli Jews, for the U.S., and for OECD countries (commonly considered the group of developed countries) excluding the U.S. were almost identical, at approximately 74 years; life expectancies for Arab Israelis were lower by over two years (see figure).


Since then, the gains in life expectancy for Israelis have far outpaced those of other countries. Life expectancy in the US grew by four years, and those in the rest of the OECD grew by six years.  But for Israelis, both Jews and Arabs, the gain was over seven years.  Israelis as a whole now have a longer life expectancy than the non-US OECD countries, and even Israeli Arabs have a noticeably longer life expectancy than Americans.

The second figure provides a country-by-country comparison in 2005 of life expectancy among Israeli Jews and Arabs to life expectancy in OECD countries and in neighboring countries in the Middle East.  Israeli Jews live longer than the citizens of all but four countries in the world.  Despite the substantial increase in life expectancy among Israeli Arabs, and the fact that their life expectancies are already longer than those in the neighboring countries, the U.S. and Denmark, they are still below the OECD average and all other advanced Western countries.


Another very widely used indicator of health outcomes is infant mortality. While life expectancy aggregates information about health outcomes over the entire life cycle, infant mortality focuses on one narrow and acute aspect of health care:  the survival of infants during the first year of life.  The third figure reflects a similar story with regard to health outcomes:  In 1960 infant mortality rates for Israeli Jews, for the US and for the rest of the OECD were nearly identical; the rates for Israeli Arabs were much higher, approximately double. Since then, all countries show substantial declines in infant mortality, from over 25 per 1000 live births to less than 10. But the decline in Israel is greater than that for the US and slightly exceeds that of the rest of the OECD. Israeli Arabs show the greatest decline of all, reaching American infant mortality rates by the middle of this past decade.



The Healthcare System

Private funding currently represents about 43 percent of the overall funding, the highest beyond the United States among the developed countries, and the highest among countries in which universal health insurance is legally guaranteed for all residents via National Health Insurance.

The “Americanization” of the Israeli healthcare system is reflected at this stage in growing gaps in access to care and loss of income protection as well as efficiency, which can be measured by the developing inflation in the system. This reality is not reflected as yet in public health indicators. The growing gaps between the United States and the 22 high income OECD countries in favor of the latter may be signaling what can be expected in Israel in terms of its achievements in the health of its population. Against this backdrop, the efforts by the large healthcare service providers to deepen their focused activities in closing the gaps stand out.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2009.

The Health Care System – 2007

Life expectancy in Israel is among the highest in the world (especially among men) and infant mortality is below the OECD average, even though the percentage of underweight births, ordinarily a proxy for high infant mortality, is much higher than in European countries. Many factors other than the curative and preventive services affect life expectancy and mortality, including some related to culture, education, and lifestyle. However, the health care system is central in preventing and coping with states of morbidity and contributes to the achievements described above.

The public nature of the health care system, as well as the high quality of its health care staff, should, at least in principle, guarantee the delivery of health care services that meet high professional standards and are theoretically accessible to the entire population. In recent years, however, disparities between population groups have widened in many aspects of health status and accessibility to health care services. This has taken place against a backdrop of reduced state participation in funding of the system – often overshadowing the system’s previous achievements.

As in past years, this chapter reviews indicators of developments in the health care system. Part A surveys national expenditure on health care services, and changes in the composition of its funding, relative to the OECD countries. The main developments in the inpatient system and in health care system personnel are reviewed. Part B focuses on the consequences of the inequality in health and health care services as reflected in indicators of the public’s health, access to health care services, and differences in infrastructure in different parts of the country.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 2007.

Oral and Dental Health: The Responsibility of the State Towards Its Citizens

Morbidity is high and the disparities between population groups are substantial. Public spending on dental health care is the lowest among Western countries. Oral and dental health is an integral part of overall health and morbidity in this area represents a drain on the individual and on society as a whole. Most European countries have recognized their obligation and have included dental care in their national health insurance plans and as part of their basket of services, something that eases accessibility to receiving care and narrows the gaps between population groups. The State of Israel has not as yet accepted this responsibility.

The authors state that the time has come to fulfill the intentions of the law regarding dental care for school age children by adding dental care to the basket of services that are stipulated under the National Health Insurance Law. They also recommend widening the basket of services for dental care to other population groups (such as the elderly) through a relatively modest budget increase. They also suggest establishing an epidemiological dental data base with on-going follow-up of individuals and cases, as well as widening educational work with populations, training more manpower in dental health care services and increasing the fluoridization of water in Israel.

This publication is in Hebrew only.

Enacting the National health Insurance Law: Why in 1994?

The legislation regarding national health insurance is among the most important pieces of social legislation of the past decade. Until its ratification in 1994, there were no fewer than 15 propositions, some put forward by the government and some as private initiatives (by Knesset members from different parties). Why did all the previous initiatives fail and what was particular about the latest bill that it passed? No single factor led to the necessity to change the “rule of the game” when it came to health care and the healthcare system. The combination of a crisis with the possible solution form the Natanyahu Commission’s recommendations as well as changing political conditions, macro-economic developments and the “winds of reform” that blew at the time, all contributed to 1994 being the right time for health legislation and reform.

This paper appears as a chapter in the book Formulating Social Policy in Israel, Uri Aviram, Johnny Gal and Yosef Katan (editors).

This paper is in Hebrew only.

The Plan to Reorganize Mental Health Services in Israel, 1972: Factors that Help and Hinder the Reform to Community-Based Mental Health Services

Since the mid-1970s the mental health services have attempted to decrease the number of psychiatric beds and decrease the number of services given on an in-patient basic, while simultaneously developing community-based services that are accessible and available to the public at large. Despite all the efforts, the attempts at instituting this reform have not gone well. This article begins with a brief description of the social and organization state of the mental health service,s the reform plans, the major events that have occurred in attempts to institute the reform, and factors that have helped and hindered the process.

This paper appears as a chapter in the book Formulating Social Policy in Israel, Uri Aviram, Johnny Gal and Yosef Katan (editors).

This paper is in Hebrew only.

Health Care Services – 2006

The services are legislated by the National Health Insurance Law and are delivered at relatively low private cost. The achievements in respect of the population’s health status and satisfaction with the health care services provided should be credited to the public nature of the system and the level and quality of its personnel. However, the system still has some residual problems that overshadow its achievements and are reflected in declining public satisfaction. They include, in particular, the problem of inequality in access to services and rising costs of the system.

This year as in the past, various aspects of developments in the health care system are reviewed with emphasis on issues that, if dealt with, may improve the functioning of the system and prevent harm to the population’s health. The chapter is divided into two parts. Part A surveys the main developments in the health care system. Section 1 discusses the optimum level of expenditure for health care services, comparing Israel with the OECD countries. Section 2 examines the composition of funding for the system and its effect on equity, with emphasis on the upward trend in the share of private funding in recent years. Section 3 is devoted to manpower in the health care system, and the last section examines the health status in Israel in selected areas, including recent developments in infant mortality and life expectancy. The second part of the chapter (B) discusses the significance of inequities in health and health care services against the backdrop of the second war in Lebanon.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 2006, Yaakov Kop (editor).

Health Care Services – 2005

The credit for these achievements, as has been noted in the past, definitely belongs to the caliber and quality of the system’s personnel and also to the public nature of the health care system.

At the same time, though, the rise in the share of private funding in health care and the system’s growing susceptibility to conventional market failures have meant that the social and economic achievements of the system are being eroded and there are rising concerns that, ultimately, the public’s health will suffer. The private funding of services is claiming a growing portion of the household budget, especially among the low-income quintiles, and is making medical services less accessible due to cost. The cost of services has been rising and the public’s satisfaction with the system has been falling. In this chapter, the increase in private funding as a main health care system issue is examined. As in past years, there is also an assessment of several other issues that, if dealt with appropriately, may help the system to function better and to provide more continuity and better coordinated services.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 2005, Yaakov Kop (editor).

Preventive Medicine for Pregnant Women and Their Children: At a Crossroads

In the past this branch has dealt with regulating disease; in the past few decades the challenge has been widened to improving the health and quality of life of populations and to narrowing the health gaps between different populations. Preventive medicine is based on the principle of university service that is reliable and accessible to all.

This work examines the organization and budgeting of services; evaluation of the services and accepted national and international measurements; a brief history of mother and infant services in Israel; recommendations for future planning and improvement of the service.

The paper is available in Hebrew only.

The Relationship Between Community Medicine and the Hospital System

In practice, the relationships within the medical services – between hospitals and sick funds – is becoming ever more complex. Changes within and outside of the system  – like an aging population, increased longevity, greater numbers of chronic care patients, new medical technologies – impact on both the givers and receivers of service.

This paper examines the existing relationship between community medical services and the hospital system and recommendations for improving this increasing important and complex relationship.

This paper is available in Hebrew only.

Health Care Services – 2004

The challenge facing the system, primarily in view of changes towards increased private funding, is to maintain and improve the level of service.  Following these changes, satisfaction with the system has declined somewhat and there is concern that the changes in the composition of funding will impair the health of weak population groups, since these groups’ access to medical services is declining relative to others.

This year marks the tenth anniversary of the enactment of the State Health Insurance Law, which established every resident’s basic entitlement to a “basket” of medical services and created a funding system that would assure the fair and equitable realization of this entitlement. The law marked the first stage in the reform of the Israeli health care system as originally proposed by the Netanyahu Commission and, more recently, by the Amorai Commission. Other important elements of the reform, which pertain to the law directly and indirectly, concern issues that are not being implemented even though the system deals with them extensively. Three such issues are discussed in the second part of this chapter.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 2004, Yaakov Kop (editor).

Mental Health Reform in Israel

Israel, like many other countries in the world, is in need of mental health reform. Wise implementation of reform will require an understanding of the societal processes as well as an accommodation to professional attitudes.

This paper is in Hebrew only.

Health Policy and Legislation: Changing the Rules of the Game

Despite these improvements, there are gaps between population groups in Israel on every one of these indicators – in terms of risk-factors and morbidity rates. In addition, there are indications that these gaps are widening.

This paper reviews the the passing of the National Health Insurance Law in 1994 and processes of change since then.

This paper is in Hebrew only.

The Health System – 2001-2002

We then examine national expenditure on health and the funding of the health system. Developments in the hospitals and health funds gives a picture of overall changes in health care, and the degree to which the health system meets users expectations and needs is also explored. The remaining sections of the survey deal with specific sectors of the health system, with emphasis on developments in the past year. In addition, we will devote a separate discussion to trends in the use and regulation of medicines, dental health care, and mental health care.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 2001-2002, Yaakov Kop (editor).

Action Plan – Long-Term Care Services

First, we describe the extent of the problem occasioned by the exclusion of long-term inpatient care from the services covered by National Health Insurance. Second, we present the value and organizational perceptions that are crucial in policymaking. Several issues are taken up in this context. The first concerns the kind of health expenditure that policy should address – should it assure a given level of national expenditure or only a given level of public expenditure? The second issue concerns funding and, especially, whether long-term inpatient care and general health insurance should be funded separately. The third issue is which institutional player to prefer as the manager of long-term care insurance, in view of the challenges in regard to coordination and continuity of health services. Some of the discussion of these issues is enriched by other countries’ experience.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1999-2000, Yaakov Kop (editor).

Action Plan – Health Services

Another goal was to create an inclusive and comprehensive package of services – including components that the health funds had not offered before the law was enacted – to which all residents would be entitled. Has the law attained these goals? Not yet. Most of the recommendations of the CSPS health team wish to make progress toward these goals. The recommendations also explain the main reasons for the non-attainment of these important goals thus far.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1999-2000, Yaakov Kop (editor).

Health System – 1999-2000

Is Israel’s national health expenditure high by the standards of the industrialized countries to which Israel is usually compared? What major outputs, in terms of residents’ health, does Israel gain from its investment in health services?

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1999-2000, Yaakov Kop (editor).

Health Services – 1998-99

Truth to tell, even before the law was enacted the health system suffered from ongoing crises, but this law was intended to solve the system’s problems, at least from the financial standpoint, and has not done so. One of the salient parameters of the health system during these years has been the continual and consistent attempts by the government to cut back its budgetary involvement and increase the public’s share in the funding of national health expenditure.

In our review this year, the presentation of health expenditures has been modified in order to bring it closer to the changes that have occurred in the past few years in the structure of system funding. One of the main changes was the elimination of health-fund membership dues and their replacement by the health tax. According to the principles of national accounting, there is an essential difference between these two types of levies: the former is voluntary, the latter obligatory. In the course of the changeover, various parameters of course changed, leading to a different incidence of funding. However, to permit a multi-annual comparative survey, the health tax can be presented as the successor of the direct private insurance (membership dues) in effect before the passage of the law. Accordingly, this study does not include National Insurance transfers on account of the health tax as part of government expenditure.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1998-99, Yaakov Kop (editor).

National Expenditure on Education and Health

The study shows the the performance of expenditure on civilian public consumption declined markedly in 1994-1995, meaning the the public did not receive its full due for the heightened burden foisted on GDP for the delivery of these services.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1996, and is available upon request.

Government Expenditure on Social Services 1994-1995

This report analyzes actual government outlays for social services in 1994 and the budget for 1995. The findings are analyzed in the context of development in the 1980s and 1990s.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1994-1995, and is available upon request.

Israel Towards the Twenty First Century – Social Report

The overarching examples of change looked at here in education, health, and income maintenance point to the emergence of new patterns in the operating environment of the social services. Systematic inspection of each of these social systems shows that in order to continue nurturing the Israeli welfare state, it will be necessary to reexamine the objectives, the goals, and the means for attaining them.

This paper appears as a chapter in the Center’s annual publication, Israel’s Social Services 1994-1995, and is available upon request.

National Expenditure on Education and Health – 1985

First, we expand the discussion to include expenditures on social services by all active participants in the social field in addition to the central government. In other words, we explore national expenditure, including the activity of the private and the non-profit organization sectors, which complement the government activity.

This paper appears as a chapter in the Center’s annual publication, Changing Social Policy: Israel 1985-1986, and is available upon request.