For the first time, private hospitals, such as Assuta, Herzliya Medical Center, and Elisha in Haifa, will have to pay a special tax on their income, under a draft Economic Arrangements bill obtained by "Globes." The tax is one of the recommendations by the German Committee for strengthening the public health system, reported exclusively in "Globes" six months ago. Another recommendation by the committee included in the draft bill states that another tax will be levied on any income received by any public or private hospital derived from medical tourism.
Sources inform "Globes" that Minister of Health Yael German asked that a long list of the committee's recommendations be included in the bill, headed by the reform in complementary and commercial health insurance. This recommendation, however, was prevented by the opinion of Assistant Attorney General Avi Licht, who held that these changes were too dramatic, and required a more orderly legislative process.
According to the draft bill, the Ministers of Finance and Health will be authorized to determine by themselves the amount of the special tax to be levied on the private hospitals, subject to approval by the Knesset Finance Committee. Until they do so, the tax will be calculated according to a special method that appears difficult to implement: if the income of a private hospital exceeds the agreed income ceiling to be determined by up to 107% of the ceiling, the hospital will pay 30% of its surplus income above the ceiling. If the hospital's surplus income exceeds the ceiling by more than 107% of the ceiling, the hospital will pay 67% of its income in excess of 107% above the ceiling. How will the ceiling be determined?
This is the real problem. According to the formula in the draft, the income ceiling will be 95% of the private institution's income in 2013, excluding the public payments it received (in other words, excluding services provided through a commitment to pay form from one of the health funds), plus 51% of what is defined as "presumed payments" received by the doctors last year directly from their patients (the doctor's remuneration independent of the payment to the hospital). Health industry sources believe that this model cannot be implemented, because even Assuta does not have a database for the payment received by the surgeon from the patient. For this reason, the draft Economic Arrangements bill includes another German Committee recommendation that the private hospitals themselves collect the full payment for medical treatment, with no economic connection between the doctor and the patient - the same principle set forth in the bill for the public health system.
Medical tourism: encouragement or restraints?
The draft Economic Arrangements bill contains another German Committee recommendation for a special levy on both public and private hospitals on income from medical tourism. Under the draft bill, the Finance and Health Ministers will be authorized to determine a tax of at least 15% on all income from medical tourism. In addition, the bill stipulates that the tax benefit currently granted for hospitalization of medical tourists will be canceled. The German Committee recommended that medical tourism be encouraged under arrangement and supervision, so that it will not be at the expense of Israeli patients, but this section in the draft Economic Arrangements bill deals mainly with constraints in the medical tourism market, with an emphasis on its negative effects on Israeli patients.
Published by Globes [online], Israel business news - www.globes-online.com - on October 1, 2014
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