Israeli health official: We are a market economy but socialist when it comes to health

The director general of the Israeli Ministry of Health explained that while Israel is a free economy, when it comes to healthcare, the overarching philosophy is socialist, and even communist.

Moshe Bar Siman Tov, director general, Ministry of Health, Israel, speaking at the MedinIsrael conference in Tel Aviv last week.

Editor’s note: This is the first in a series of articles emerging from an invitation by the Israeli Export Institute to Arundhati Parmar, editor-in-chief of MedCity News, to participate in the MedinIsrael conference, the 5th international digital health conference and expo, March 25-28 in Tel Aviv. Parmar participated both as an attendee and speaker. All travel and related expenses were covered by the Israeli Export Institute, a quasi-governmental entity.


Better dead than red.

That was a phrase that gained currency and popularity during the time of Joseph McCarthy who ruthlessly targeted anyone he suspected to have communist sympathies. While the saying has definitely lost its appeal in America as the Red Scare has long subsided, the term “communist” is still not kosher. However, in Israel, a free economy where the government plays a big role in the nation’s healthcare system, it is a term that is actually being embraced – at least by one senior government official.

Moshe Bar Siman Tov, director general from the Ministry of Health in Israel, delivered a keynote at the MedinIsrael conference last week where he talked about how the Middle Eastern nation has a national health information exchange platform – OFEK – to allow data to be shared easily across competing healthcare stakeholders. Now, the system is being enhanced to be more dynamic to include alerts for instance, he explained.

But to appreciate the details of what Bar Siman Tov’s keynote it’s important to understand the Israeli healthcare system. He explained the structure of the industry in a press briefing to international journalists following his prepared remarks.

Israel has four healthcare management organizations (HMOs) that are comparable to the set-up of Kaiser Permanente – an integrated healthcare system providing both care and coverage. Of the four healthcare funds, as they are called, the two biggest are Clalit Health Services and Maccabi Health Services. Clalit is responsible for covering 55 percent of the Israeli population of roughly 8.9 million, all of whom have coverage under a universal coverage program, Bar Siman Tov pointed out. Maccabi covers another 25 percent while the other two funds cover roughly 10 percent each. The other two that he didn’t name are the Meuhedet Health Services and Leumit Health Servies, per the Jerusalem Post, although the 2017 Post article identified that Leumit as the smallest health fund of the four.

All Israelis are free to switch among the four HMOs. In other words there is a level of competition, per Bar Siman Tov. It’s important to note that other than the Israeli government funding healthcare, taxpayers do too. An Israeli citizen on my return flight explained that he pays a “healthcare tax” based on a percentage of his salary.

When it comes to hospital beds, half is owned by the government, while Clalit owns about one-third, which means that 80 percent of the hospital beds are owned by the two organizations. The genesis for the interoperable healthcare platform emerged from Clalit, Bar Siman Tov said.

“They wanted a platform that would allow them to connect the clinics and the hospitals and about 8 years ago, the Ministry of Health — I wasn’t in my position — but the Ministry of Health decided to scale it up to the national level so now all the hospitals in Israel and all the HMOs in Israel are connected to this platform,” he said.

In fact the platform is so centralized that you could get 10-20 people into a small room and they would be able to manage it expertly, he said.

Given the fragmented system that is our expensive, for-profit healthcare system where interoperability remains a pipe dream, I asked Bar Siman Tov if he had any message for U.S. regulators. He responded gingerly, only too aware that he wanted to extol the positives of the Israeli system without criticizing its American counterpart too harshly which, after all, is the prime market for so many Israeli entrepreneurs and companies. Here’s what he said:

I will try to leave politics outside this room. I think that – I hope that I am not making any mistakes – because in my conversation with the [Israeli] prime minister [Benjamin Netanyahu] we are talking about health as the goal in the Israeli healthcare system. We are always talking about the United States – sorry to say – as an example of how not to run a national healthcare system.

The bottom line that is always repeated is that they are a market-oriented system and we are not. Israel is a free economy and we incentivize entrepreneurs in every way. But we are a little bit not just socialist, sometimes I say even communist when it comes to [the] healthcare system. Due to [the possibility] of all the market failure, you need a very strong and powerful intervention of the government. It [doesn’t work] when it’s only market oriented. There is competition. We have four HMOs. These HMOs are competing with one another. I am with one but I can move tomorrow to a different one. There’s a certain level of competition among the hospitals as well but it’s very controlled in the hospital.

The free market economy to which Bar Siman Tov alluded was in display for all to see at the MedinIsrael conference. The exhibit area had numerous companies touting their products and services with a healthy buzz ever present. Nearby the b-to-b meetings took place. International delegations from Brazil, Kenya, China, India, Ghana and many more countries buoyed by individual Israeli trade officers in those countries were present to learn from Israeli innovations and transfer technologies that would fit their respective country needs.

And yet, while encouraging market-based innovation, Israel has been able to build a national healthcare system with universal coverage without much controversy. It has an interoperable data platform that has remained an elusive dream in the U.S. The naysayers might say that it is all very well in a nation of a $8.9 million and much more complicated in one with a population nearly 37 time more.

But then, those are the naysayers. For the rest, perhaps it is wise to acknowledge that even roundly-disavowed and largely-failed national organizational principles like communism may have some good ideas that may be applied to capitalist nations.