Israeli Health System Dynamics in International Perspective

1
Israeli Health System Dynamics in International
Perspective

• David Chinitz, Hebrew University Hadassah
  School of Public Health
• Richard Saltman, Emory University School of
  Public Health and European Observatory on Health
  Care Systems.

2
Israeli Health System Dynamics in International
Perspective

• Structure
• Values
• Politics
• Path dependency
• Policy learning

3
Emphasis on Structure

• Most health reforms deal with structural issues
• Avoid tampering with underlying social values
• Avoid difficult political engagements
• Dynamics reflect path dependency and policy
  learning

4
Path Dependency (PD)

• History places boundaries on reform
• Inertia of previous decisions (or non decisions)
• Institutional structure
• Organizational behavior
• Organizational politics
• Punctuated Equilibrium

5
Policy Learning

• Policy makers and stakeholders deliberately
  adjust the goals, rules and techniques of a given
  policy in response to past experiences and new
  information.
• Helderman et al 2005

6
Structural Elements and Options

• Centralization
• Regionalization
• Markets
• Privatization
• Regulation
• Decentralization to primary health care

7
Different Emphases in Different Countries

• Regionalization (Spain, Italy, New Zealand)
• Markets (UK, Netherlands, Sweden, Germany,
  Israel)
• Regulation (UK, Netherlands, Sweden, Germany,
  France, EU)
• Primary Health Care and Public Health (New
  Zealand, UK, Finland, Sweden, Spain,
  Netherlands)

8
Structural ReformsFinance, Allocation and
Delivery

• Changes in finance relatively minor
• And only in Social Health Insurance (SHI) systems
• Allocation
• From historical to prospective budgets
• Citizen choice
• Delivery
• Vertical integration
• Shortened length of stay

9
Examples

• England
• Tax based system
• Netherlands
• SHI system

10
England

• The big bang of 1948 creation of the NHS
• Based on key values
• Universal
• Comprehensive
• Tax based
• Until 1992 regional structure with strong central
  control
• eg center establishes rules for cross boundary
  care

11
The 1991 NHS Reforms

• Part of trend to reduce role of government
• Convert NHS from command and control to internal
  market
• Purchaser/provider split
• Hospital trusts
• General Practitioner Fund Holding (GPFH)

12
Adoption and Implementation of the British
Internal Market

• The blitzkreig of adoption
• The problem of occupation (implementation)
• Social and political unwillingness to let
  providers close
• Collegial relations between GPs and hospital
  doctors
• Patient choice limited
• Contracting more about accountability than
  competition
• Despite expectation of new efficiencies, budgets
  grow (transaction costs)

13
England Implementation 2

• 1997 Labor Government
• criticizes internal market, especially GPFH
• but then introduces Primary Care Groups (PCG)
• A kind of super GPFH
• Eventually became Primary Care Trusts
• renewed focus on patient choice
• more power to NHS Foundation Trusts
• plan to grow 7 in real terms by 2008.

14
England Policy Learning

• Internal market lead to focus on health gain
• PCG purchasing accompanied by activities of
  National Institute for Clinical Excellence
• Strong recommendations regarding new technologies
• Renewed emphasis on public health and prevention

15
England Structure, Learning,Values

• Structural changes reflect a degree of path
  dependency
• Despite regime changes, purchasing and patient
  choice remain important
• While structural change goes on so does policy
  learning
• Prioritization of various conditions
• Focus on primary health care, public health, and
  prevention
• Activities of NICE
• Budgetary increases under both labor and
  conservatives reflects strong social value of NHS

16
The Netherlands

• A pluralistic system
• Numerous public sick funds
• Private insurers
• Corporatism
• Two main values
• Solidarity
• Subsidiarity

17
Dutch Health System Issues, 1980s

• Rising costs
• Strong government intervention clashed with
  corporatism

18
1987 Dekker Recommendations

• Unify public and private insurance under one plan
• Regulated competition among sick funds
• Risk adjusted capitation for 85 of costs
• Nominal premium to be paid by citizens
• Free choice of sick fund
• Selective contracting by sick funds

19
Implementation of the Dutch Reform

• Inability to unify public and private insurance
• Mergers in health insurance sector
• Sick funds only partially at risk
• Small absolute differences in nominal premiums
• Government continues to intervene to contain
  costs

20
NetherlandsStructure, Learning, Values

• Despite implementation problems, the vision of
  the Dekker Model survives across different
  political regimes (path dependency)
• The model is constantly being refined
• Pharmacy cost groups, diagnostic cost groups to
  capitation formula (policy learning)
• Attempts to regulate private insurance reflect
  the strong underlying value of social health
  insurance in the Netherlands.

21
Interim Conclusions

• New public management, internal market, regulated
  market, patient choice appear to survive changes
  of regimes.
• Never implemented in full.
• Regimes have multiple agendas, policy learning
  goes on.
• But reforms are always incomplete.

22
Evans Failure of Health Reform

• None of the recent health reforms are able to
  contain costs, and maintain equity of finance and
  of access.
• Is a breakthrough possible? No, because
• Evans RG Journal of Health Politics, Policy and
  Law, February 2005

23
Evans Evidence Based Medicine Meets Sisyphus

• But while more information is better than less,
  no amount of evidence on relative efficacy or
  cost-effectiveness will induce providers
  voluntarily to accept overall reductions in their
  activity levels and incomes.

24
Evans Cont.

• And in the struggle for the hearts and minds of
  the general population, or even politicians,
  professional assertions of needs are rarely
  countered successfully with mere evidence.

25
Evans on Coping

• Effective coping depends both upon the resources
  of the state in terms of bureaucratic and fiscal
  capability and public respect and cooperation,
  and upon the degree of democratic responsiveness
  of the state itself to broader public values.

26
Can Israel Find a Way out of Evans Path
Dependency?

• Can we get equity and efficiency?

27
The Israeli Reform

• The Big Bang National Health Insurance 1995
• Unique
• 100 of population insured by competing health
  plans
• No premium for standard basket
• Standard basket detailed and mandated by law

28
Israel Path Dependency

• No change yet in
• Capitation formula
• Creation of hospital trusts
• Long term care

29
Israel Policy Learning

• Mental health reform
• National Primary Care Quality Measurement System
• Basket of Services and Technology Assessment
• Public debate on prevention vs adding hospital
  beds

30
Israel Social Values

• Increasing share of private finance
• England 19 (2000, OECD 2003)
• Netherlands 35 (2000,OECD 2003)
• Israel 32 (2002, CBS 2004)
• Perhaps worsened by external shocks

31
Policy Lessons

• Take advantage of policy learning
• Focus on values and not only structural reform
• Evans
• State fiscal and bureaucratic capacity
• Public cooperation
• Democratic responsiveness to values