Israel: #6 in the 2020 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 51.14. Israel’s performance was consistent across all dimensions, with particular strengths in Quality (#8, 63.89) and Choice (#10, 43.20).
While Israel has a robust scientific community thanks to its world-class university system, the country ranked 15th (38.79) in Science & Technology, due to its relatively parsimonious deployment of medical advances.
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 funds, but enabling members to switch plans every six months, facilitating vigorous competition among them. 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 manufacter, which also sells a number of branded, innovative drugs.
Quality
Israel comes in at #8 overall for Quality. While it struggles with potential overcrowding at hospitals, Israel scores highly on measures of preventable disease (#4), led by its high cancer survival rates. The country also gets high marks for providing patient-centered care (#8), influenced by short waiting times for specialty care.
Choice
Israel ranks #10 overall for Choice, clearly driven by its affordable health insurance system (#3). Despite a limited number of companies from which to select health insurance, there is free choice of providers. In addition, the country’s low level of national health expenditures is due in part to restrictive access to the newest innovative medicines (#15).
Science & Technology
Of all dimensions in the Index, Israel’s lowest ranking comes in Science and Technology at #15. While it produces a high number of health care patents for the size of the population, Israel approves very few innovative drugs through its Institute for Standardization and Control of Pharmaceuticals. However, Israel ranks high in scientific innovation (#4), with a high number of cited research as well as Nobel laureates — on par with countries like Germany and France.
Fiscal Sustainability
At #12, Israel ranks among the middle of the Index for Fiscal Sustainability. Though Israel generally does well to limit public health spending (#11), public health spending growth (#17) has picked up in recent years. Especially amidst the pandemic, Israel is at a crossroads in terms of national solvency (#19); a rapidly rising debt-to-GDP ratio may threaten its ability to finance health care in the near future.
