The German Committee on strengthening the public health system is converging on an agreed plan for supplementary insurance. Recommendations have already been announced on changes to the regulatory structure, such as the establishment of a separate authority to manage the state hospitals.
According to the draft that is emerging, the health funds (equivalent to HMOs in the US) will be required to make the first level of supplementary insurance available as a basic insurance product, at a lower rate than today’s. It will include what are considered to be the most essential components: the option to choose a surgeon, and the option to consult a prominent specialist. Choice of surgeon accounts for 42% of the supplementary insurers’ medical expenses (NIS 1.2 billion annually), and consultations account for 13% of expenses (NIS 362 million annually). The terms of the first level will be standard across all the funds, and they will probably be allowed to compete only on the monthly premium, which will be regulated. Any change in the monthly premium will require approval from a committee, which will include representatives from the Ministry of Finance and the Ministry of Health, as well as public representatives. Today, rates are regulated only by the Ministry of Health.
In addition to the first level of services, the funds will be allowed to market two additional, more expensive packages: a second level, which will include important services, such as dental care, prenatal tests, fertility treatments, and more, and a third level, which will include what are considered “nice to have” services alternative medicine, plastic surgery, “lifestyle services,” and the like.
The logic behind the German Committee’s recommendations is that most policyholders buy supplementary insurance in order to receive services that are considered essential, but which are not included in the state healthcare package. However, today, they are forced to pay high monthly premiums for “marketing gimmicks,” which are included in the insurance package - for example, a personal trainer, or a 50% discount on plastic surgery. The committee further argues that the current mix of supplementary insurance packages creates confusion among policyholders, to the extent that they are unaware of many of the benefits to which they are entitled.
Sources at both the funds and the Ministry of Health expressed concern today over the apparent conclusions. According to one of the sources, the perceived “marketing gimmicks” are what enable insurance services to break even (some are in deficit), and if the funds are forced to weed out various services from the first level, it is possible that these policies will lose money.
Former Ministry of Health Deputy Director General and supervisor of the health funds Yoel Lipschitz claims that this is a forced move that is liable to cause the opposite of the intended effect: “There was a historic opportunity here to effect real change, and to budget the system properly. Instead, a mess is being made of the supplementary insurance programs. The HMOs are being pushed into a new marketing frenzy in order to launch a third level, and the public will again lose faith in the supplementary insurance packages, and will buy private insurance, because this measure will necessitate a reduction of benefits for some of the insured. I remind you that once private insurance policies are marketed, they cannot be changed, and, as we know, this committee does not affect the private insurers."
The reduction in benefits about which Lipschitz is concerned touches on a no less dramatic initiative that the German Committee may recommend: requiring the funds to transfer 15% of their annual income from supplementary insurances, currently NIS 2.5 billion, to the state hospitals. This sum, NIS 180 million, is intended to go towards financing the implementation of additional expected German Committee recommendation, about which “Globes” reported earlier this week: the establishment of a “full-timers” model, which will allow hospitals to employ specialists at salaries over NIS 100,000 per month, in exchange for their commitment to work only in the public system. The idea is that this model should help make it possible for a certain degree of selection among surgeons with no additional payment, and without using supplementary or private insurances. In any event, it appears that the German Committee does not intend to cancel the option of selecting a surgeon who can only operate in private hospitals from the supplementary insurance - a fact that may ease the nerves of both the funds and the private hospitals Assuta and Herzliya Medical Center.
Published by Globes [online], Israel business news - www.globes-online.com - on March 20, 2014
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