Israel: #5 in the 2021 World Index of Healthcare Innovation
Israel has achieved universal coverage through vigorous competition among private health insurers.
By Gregg Girvan and Avik Roy
Introduction
Israel ranks sixth in the World Index of Healthcare Innovation — and first in Asia — with an overall score of 55.72. Israel’s performance was consistent across all dimensions, with particular strength in Quality (#2, 63.21).
The country achieves a #7 ranking in Science & Technology (38.38) despite a relatively parsimonious deployment of medical advances, owing in large part to a robust scientific community supported by its world-class university system.
Background
Health insurance in Israel predates the establishment of the Jewish state. The country’s four private health insurers — Clalit, Maccabi, Meuhedet, and Leumit — were founded in the first half of the 20th century, and modeled after Germany’s sickness funds. By the early 1990s, over 90% of Israeli residents had health insurance.
Beginning in 1995, based on recommendations from a commission led by Shoshana Netanyahu, Israel covered the remaining uninsured, by mandating enrollment in one of the four private insurance funds. Enrollees are able to switch plans every six months, facilitating vigorous competition among insurers. Each year, the Ministry of Health publishes a standardized list of benefits that all insurers must offer, along with a baseline prescription drug formulary. Many Israelis purchase supplemental insurance to pay for services not covered by the standard benefits package.
Israel’s innovative health care sector is dominated by Teva, the world’s largest generic pharmaceutical manufacturer, which also sells a number of branded, innovative drugs.
Quality
Israel comes in at #2 overall for Quality. Israel has gained notoriety worldwide for its speedy and highly organized COVID-19 vaccination campaign, effectively halting the pandemic. While it struggles with potential overcrowding at hospitals, Israel scores highly on measures of preventable disease (#2), led by its high cancer survival rates. The country also gets high marks for providing patient-centered care (#2), influenced by short waiting times for specialty care. Israel was the first country to successfully vaccinate the vast majority of its citizens against COVID-19.
Choice
Israel ranks #10 overall for Choice. clearly driven by its affordable health insurance system (#5). Despite a limited number of companies from which to select health insurance, there is free choice of providers. Finally, though Israel’s system is among the most affordable in the Index, it achieves this by restricting access to the newest innovative medicines (#20).
Science & Technology
Israel achieves a great deal in Science and Technology relative to its size. Though Israel approves very few innovative drugs through its Institute for Standardization and Control of Pharmaceuticals, the country is still an incubator of medical advances (#10) due to a continuing surge in the number of health care patents. Israel also ranks high in scientific discoveries (#4), with a high number of cited research as well as Nobel laureates — on par with countries like Germany and France. As an example of how Israel’s scientific culture works well with its private health care system, in August 2021 researchers from Maccabi published a widely-cited study tracking COVID-19 incidence in people who had recovered from a prior SARS-CoV-2 infection, relative to those who had received the BioNTech/Pfizer vaccine.
Fiscal Sustainability
At #11, Israel ranks among the middle of the Index for Fiscal Sustainability. Though Israel generally does well to limit public health spending (#11), growth in public health spending (#17) has picked up in recent years. Though Israel ranks lower in national solvency relative to others (#18), it effectively contained growth in new debt heading into 2020 and its economy contracted less than other countries in the Index due to the pandemic.
