The Battle Against the Coronavirus From the Perspective of the Healthcare System: An Overview
Author: Dov Chernichovsky, Benjamin Bental, Rachel Arazi, Elon Seela Policy Research

Executive summary

Israel’s population is relatively young providing it with an advantage in responding to the coronavirus crisis; however, the healthcare system entered the crisis with a scarcity of resources and an unclear division of responsibilities between the Ministry of Health and other bodies that are responsible for responding to a crisis like the coronavirus pandemic. With the outbreak of the pandemic, an additional NIS 17 billion was allocated to the health system, part of which was invested directly in the system and part of which was used for equipment and medicine. Even if the additional beds and personnel allocated to dealing with the crisis become permanent, the effect will be negligible in face of the rapid growth and aging in Israel’s population, and the dismal state of the health system, including lasting neglect of community-based healthcare.

Israel’s experience of the pandemic

Israel is in a relatively good position in terms of Covid-19 mortality per million inhabitants thanks to several factors: only 10% of the population is aged 65 and older, the inhabitants of Israel enjoy universal health insurance, there is only one main port of entry  to the country; it has a high level of readiness for emergency situations, and it is characterized by a high level of solidarity.

Virus morbidity and mortality rates are age-dependent and therefore greatly vary across sectors in Israel according to their age structures. As an illustration, only 5% of the Haredi population and 8% of the Arab population are over age 60. In contrast, 20% of the non-Haredi population are over 60. Applying uniform age-dependent rates to the various sectors of the population, and looking at this indicator alone, would imply the following results:

  • Given their age profile, the proportion of hospitalizations among non-Haredi Jews – who constitute about 67% of the population – would theoretically be expected to be about 79%, and their proportion of deaths would be expected to be about 86%.
  • While the proportion of Haredim in the population is about 12%, their expected proportion of hospitalizations, all other things being equal, would be only about 6.5% and their proportion of total deaths would be less than 4%.
  • Among the Arab population, which constitutes about 21% of the population, the proportion of hospitalizations and total deaths would be expected to be about 15.5% and 10%, respectively.

Within the limited boundaries of the study’s discussion and ignoring many other factors, the tribal behavior of compliance or, more importantly, non-compliance with the rules of the lockdown makes some sense since it reflects the a-priori relative risk that each population group perceives and takes on. The realized high morbidity, hospitalization and death rates among Arabs and Haredi Jews reflect their erroneous risk perceptions.

Health 3

Intergenerational friction

Israel’s national health insurance scheme is based on an intergenerational transfer of resources from younger, relatively healthy individuals to older individuals, whose health is generally less stable. In practice, the most economically active age group, 21 to 57-year-olds, subsidizes young people under the age of 21 and older people over the age of 57. The coronavirus crisis may, however, put intergenerational solidarity in Israel to the test for two main reasons:

  • Those in the 60+ age group consume about 85% of the total cost of responding to the pandemic, double their consumption during normal times.
  • The additional resources poured into the healthcare system to finance a direct response to the pandemic (NIS 17 billion) is equivalent to imposing a tax of about 2% on the income of the working-age population.

“The value of a life”

The first lockdown, roughly concurrent with the second quarter of 2020, was successful in terms of limiting mortality but caused a significant loss of GDP. However, given the early assessments of the deadliness of the coronavirus, and based on a standard accepted economic value of NIS 340,000 per life year as implied by decisions of the Health Basket Committee, the balance between the economic cost and potential life years indicates that the lockdown was “worthwhile.”

This changes when one considers the summer months of July to September, between the first and second lockdowns, when the increase in GDP was much larger than the value of the life years lost as a result of the opening of the economy during that period.

  • During the period between the lockdowns the death toll rose by an additional 1,232 relative to what it might have been had the lockdown continued – a cost of 9,270 life years valued at about NIS 3.1 billion.
  • In exchange for every life year that was lost the economy “gained” NIS 2.9 million, an amount that is eight times that of the aforementioned value of a life year.

Managing the coronavirus crisis

The Taub Center researchers examined the model of the healthcare system’s response during the coronavirus pandemic.

  • The legal framework is inconsistent, and it is difficult to determine who bears responsibility during a crisis among, for example, the Ministry of Health, Ministry of Defense, National Emergency Authority, and National Security Council.
  • National expenditure on healthcare and resources were low even prior to the crisis: in 2019, expenditure stood at about 7.5% of GDP, which is lower than the OECD average of 8.8%; In 2018, the number of beds in the general hospitals was 2.2 per 1,000 inhabitants (as opposed to 3.6 on average in the OECD); this led to a high average hospital bed occupancy rate of 93% (as opposed to 75% in the OECD on average).
  • With the onset of the pandemic, the healthcare system was allocated an additional NIS 17 billion, although only NIS 4 billion was invested directly in the system while the rest was designated for investment in respirators, drugs and personal protective equipment.
  • Most of the resources were invested in the hospitals and diagnostic centers and no significant resources were directed toward care in the community.
  • As part of the preparations for the spread of the virus, an addition of about 3,200 beds (an addition of 16%) were added to the hospital system, of which about 1,000 were standard beds and the rest temporary (in parking lots and other protected spaces). Even if these beds were made permanent, the addition would only minimally raise the number of beds per 1,000 inhabitants from about 2.2 in 2019 to 2.23.
  • The system was reinforced with about 500 new positions for physicians (an addition of 1.7%), which, if they remain permanent, will raise the number of physicians per 1,000 inhabitants only marginally – from 3.22 in 2018 to 3.28.