Financing and Work Force Issues in Israel’s Healthcare System
Author: Dov Chernichovsky, Eitan Regev Policy Research

This chapter will discuss two structural problems in the healthcare system: the continued downward trend in the share of public funding for the system and the ongoing decline in the supply of the physician work force relative to the population, with particular emphasis on the aging of the physician population.

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).