Two weeks after "Globes" revealed that Minister of Finance Moshe Kahlon and Budgets Department executives seek to limit hospital department heads' engagement in private practice, in order to deepen their commitment to the public healthcare system, an unprecedented agreement was reached between Kahlon and Minister of Health Yakov Litzman. Yesterday (Monday), the two referred to this decision as "a national move for Israel's patients," and are expected to make a joint announcement today.
Despite significant reservations, from both the Ministry of Health and Ministry of Finance legal staff, Kahlon was determined in leading this effort in the past few days, and managed to gain Litzman's cooperation by making two budgetary commitments: providing heads of departments with significant salary boosts as a compensation for barring private practice and increasing the annual addition to the National List of Reimbursed Drugs from NIS 300 to 550 million for the next five years (NIS 2.75 billion overall).
Due to this impressive budgetary achievement, Litzman has withdrawn his demand to enable supplementary insurance services to market insurance coverage for life saving treatments, similar to the coverage provided by commercial insurance firms. Although Israel's National List of Reimbursed Drugs is considered one of the world's most generous, it has significantly eroded in the past few years, as the fixed budget addition failed to match drug market development rates and the resulting increase in costs. Therefore, even the Ministry of Finance has agreed that expanding the List of Reimbursed Drugs is unavoidable. The question now is to what an extent and what will be gained in exchange, in terms of organizational changes and reforms that would benefit healthcare consumers.
Naturally, the Ministry of Health was also interested in seeing greater department head presence in public hospitals, but has had reservations about the means. The ministry is aware of the harsh sentiments experienced by senior doctors of late, particularly after the private operations reform came into effect. The reform did not only result in a drop in surgeon salaries, forcing them to negotiate with insurance companies and healthcare providers rather than the patients themselves, but also led to what they perceive as unjustified animosity towards them. The ministry is concerned that, at least at the current timing, another move targeting senior doctors may lead to a rebellion, causing senior doctors to refuse serving as department directors.
Until now, being appointed head of a department has been more than a source of prestige and status for a doctor it presented an impressive income potential via private practice (at least in some fields of medicine). If department directors will be barred from using their status for income from private practice, they may be left with nothing but the managerial headache. In such a turn of events, only very high salaries of about NIS 100,000 may appease those currently enjoying the financial benefits of private practice, a sum the Ministry of Finance will probably be unwilling to pay. At present, according to the Ministry of Finance and the Israeli Medical Association, a head of department makes about NIS 48,000 per month, without additional income.
It seems that Litzman and Kahlon have agreed to adopt the mandatory model, supported by the Ministry of Finance, according to the which department directors will be obliged to forfeit private practice. The Ministry of Health preferred a voluntary model, similar to the 'full-timer' model they are about to propose to a line of senior doctors in the near future. According to this model, the doctor will agree to forfeit private practice, in exchange for a high salary for additional global hours during the afternoon. The Ministry of Health believes that the latter model will be lucrative to younger hospital doctors, leading to a more gradual and proper effort. In contrast, the Ministry of Finance did not consider any consent necessary. They have claimed that since department directors hold a senior position not only in professional terms, but also in the educational and ethical sense, they must fully commit to one job.
As big as the compensation
There have been significant objections in the Ministry of Finance as well, mainly of Wage and Labor Agreements Department legal advisors. They know that the rights of doctors (including department heads) to engage in private practice are defined in the collective agreement signed with the Israeli Medical Association, when it will be opened to negotiations only in 2020. This means that if the change is not voluntary, it will only be possible by legislation. The recent private insurance reform has shown that the Minister of Finance is capable of pushing for tough legislative moves, despite the doctor's appeal to the High Court of Justice, but no one in the ministry thinks it will be particularly easy.
According to healthcare system sources, the success of such a change depends on only two people: Moshe Kahlon and Yakov Litzman. The latter was not in favor of the insurance reform, but consented after the Ministry of Finance promised to provide hundreds of million. In this case, it also seems that the size of the check will decide the strength of determination.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016