1. Politics, Values and Interests: the Debate over Supplemental Insurance in Israel Prof. Revital Gross The Smokler Center for Health Policy Research, Myers-JDC-Brookdale Institute and Bar-Ilan University June 2008

2. 2 Israel’s Health Insurance Market National health insurance: Provided by one of four non-profit health plans that provide a uniform basket of services Supplemental insurance: Uniform extended basket marketed by the health plans Commercial insurance: Policy tailored to individual needs; marketed by for-profit insurance companies Supplemental Insurance Commercial Insurance Including LTCI National Health Policy National Insurance (uniform basket) The Structure of Israel’s Health Insurance Market 1

3. 3 Background Supplemental insurance was introduced as part of the 1995 National Health Insurance legislation; provides additional services not included in the mandatory basket; premium determined by age only; must accept all applicants Perceived as a tool for encouraging competition and responding to consumer demands for expansion of services within the growing constraints on public funding Concerns raised regarding effect on equality

4. 4 Goal of the Study Analyze the politics affecting changes in the role of supplemental insurance (SI) in the Israeli health care system

5. 5 Methods The study employed multiple research tools: Population surveys conducted periodically between 1995-2005 to assess the rates of SI ownership Analysis of SI programs in 1996 and 2006 to examine changes in content of programs over time Interviews with stakeholders & Analysis of published documents to understand the political processes affecting changes in the SI programs

6. 6 Private Insurance Ownership % Source: Gross, Brammli-Greenberg & Waitzberg 2008

7. Supplemental Insurance Ownership by Income Quintile % Source: Brammli-Greenberg, Gross & Matzliach 2007

8. 8 Supplemental Insurance Ownership by Health Status Healthy Chronically ill Source: Brammli-Greenberg, Gross & Matzliach 2007

9. 9 Expansion of Supplemental Insurance Benefits 1996-2006 127 new services added overtime –33% preventive (checkups, immunization, life style counseling, accessories for chronic patients) –33% for treatment of chronic and other illness (e.g. second opinion, procedures abroad) –16% other services (e.g. sport medicine) –10% other medical care (e.g. dental care, IVF) –8% diagnostic services (e.g. ADHD) About 50% relevant mainly for the ill; 10% for the elderly; 20% for the young Source: Brammli-Greenberg, Gross & Matzliach 2007

10. 10 Strategic Changes in Sick Funds' Supplemental Insurance Benefits 1996-2006 Change in type of services: from "nice to have" benefits to services with clinical value Change in target population: from the young and healthy to the elderly and ill 2007 Sick Funds expanded coverage of SI to include "life saving" and "life extending" medications not included in the mandatory benefits package

11. Sick Funds Expanded SI Coverage Sick Funds Expanded SI Coverage Ministry of Finance Ministry of Health Members of Parliament Social Advocacy Groups Commercial Insurance Companies Stakeholders' Response

12. 12 Sick Funds' Rational for Expanding Coverage of Medications Rhetoric –Provide better care for ill members –Public funds are limited; can improve service with minimal low cost for members –Increased equality in access to medications –Shame to see patients at need asking for contributions to buy medications –Do not believe govt. will update basket overtime Interests –Increase income from SI (higher premium; extended coverage) –Tool to attract more wealthy members (able to purchase more expensive policies) –Reduce confrontation with patients –Less dependent on govt. allocation of funds

13. 13 Ministry of Finance Rhetoric Restricts transfer between funds (wary to loose eligibility) Undermines prioritization process and lead to growth in national expenditure on health Conflict of interests if SF manage both public and private insurance Interests Want to maintain power in defining overall health budget Do not want to grant sick funds more autonomy in management (maintain power vis a vis sick funds)

14. 14 Ministry of Health Rhetoric –Undermines the centrally-defined uniform health basket –Undermines the value of equality & solidarity –Creates a two tiered system –Weakens the public health system Interests Strengthen position vis a vis MOF in negotiating yearly budget updates for expansion of health basket Improve public image of the Minister (advocating for strengthening public system)

15. 15 Social Advocacy Groups, Patients' Organizations, Israel Medical Association Rhetoric – Undermines the value of equality & solidarity – Weakens public pressure for expanding mandatory health basket –Weakens the public health system Interests –Improve public image by supporting consensus values (equality, solidarity, public health care system, update of health basket) –Increase support among members and sponsors

16. 16 Members of Parliament Rhetoric –Undermines the value of equality & solidarity – Weakens pressure for expanding mandatory health basket –Weakens the public health system Interests –Improve public image by supporting consensus values (equality, solidarity, public health care system, update of health basket)

17. 17 Commercial Insurance Companies Rhetoric –SI policies were not priced correctly –Sick funds do not have the necessary actuarial reserves for catastrophic insurance Interests –Safeguard their market share –SI new policies put pressure to offer more competitive (less profitable) policies

18. 18 End of story – December 2007 A rare coalition between stakeholders achieved a compromise which enabled them to reject Sick Funds' initiative –Regulation prohibiting health plans to offer life- saving medications approved by parliament –Yearly funding for updating the mandatory basket of services increased significantly (2% of budget for three years)

19. 19 Reflection The rhetoric used framed the debate as an ideological value-based confrontation defining the future of the public health care system However, a political analysis of the process reveals the role of underlying organizational interests and power struggles among stakeholders as crucial in shaping health care policy Has the public truly benefited from what was achieved in the name of equality? Or is it simply that now more people are unable to purchase certain life-saving medications?

20. 20 What does the future hold? Will the public benefit? –Will the extended update of the health budget continue over time? –Will the new funds suffice to include necessary new medications to meet medical needs? –Without coverage of medications in SI, will only the rich and healthy have access to new medications? –Time will tell…

21. Thank you!