National Health Insurance (NHI) grants Israeli residents’ free choice of providers. Health plans (HPs) contract with providers for provisions of specialist care, from which their members can choose. In practice, the choice of hospitals is limited, and HPs refer patients to specific hospitals for elective treatment. This is not only based on the hospital’s quality, but also based on the HP’s financial considerations such as negotiated discounts. Exceptions are women in labour and patients needing emergency or oncological care, who are free to choose any public hospital.
The limitations on choice of provider imposed by the HPs’ “selective contracting” with hospitals leads to several issues:
- Patients may not be referred to the most appropriate hospital, resulting in sub-optimal care.
- Limited choice of provider also means limited availability of care for patients. This is a barrier to access, as patients cannot choose a closer hospital or a hospital with shorter waiting times.
- The limitations imposed by selective contracting sometimes contradict sections of the NHI law that mandate choice of provider and access within reasonable time and distance.
- Israelis that can afford it skip the queue and pay out-of-pocket for private care or obtain VHI cover, which exacerbates inequities. The more patients seek care in private hospitals, the more funds are diverted from the public to the private system. This has adverse effects on the public system, for example, crowding out of workforce (MoH, 2014; MoH, 2023a).
- There is some evidence that in clinical areas where there is free choice of hospitals, competition is greater, the responsiveness of providers is greater, and so is the satisfaction of patients (MoH, 2023c).
To mitigate some of the issues of selective contracting, the Ministry of Health has approved a reform to enhance patient choice in selecting hospitals for elective medical treatment, planned to be implemented on 1 September 2023 (MoH, 2023b). Four services will be offered with full freedom of choice: mental health, gynaecological surgery, IVF, and neurosurgery. Referrals to other services will include a list of at least four listed hospital options. At least two of these hospitals must be tertiary referral centres (called “supercentres”), of which one needs to be located close the patient’s home. At least one other hospital needs to be close to the patient’s home.
The objective of this reform is to foster competition among hospitals and to allow patients to choose their provider. These changes are expected to enhance the quality and responsiveness of care and reduce inequities in access to services. A central drawback of the reform is that transparent and up-to-date information on waiting times for different hospital services is not publicly available (see update “Waiting times for elective surgery are still not publicly available”). This makes patients’ choice of hospital less meaningful and may not reduce waiting times.