Policy responses for Israel - HSRM


Policy responses for Israel

4. Paying for services

Adequate funding for health is important to manage the excess demands on the health system. This section considers how countries are PAYING FOR COVID-19 SERVICES. Health financing describes how much is spent on health and the distribution of health spending across different service areas. The section also describes who is covered for COVID-19 testing and treatment, whether there are any notable gaps (in population coverage and service coverage), and how much people pay (if at all) for those services out-of-pocket.

4.1 Health financing

The government has approved a program for COVID-19 relief to support hospitals and HPs which will cost millions of shekels and has already transferred some of the funds to hospitals to help them procure medicines and equipment. In a second stage, the plan is to have the Ministry of Finance (MoF) provide special funding to the health plans, according to how many of their members have been diagnosed with COVID-19.

Currently, the funds used to diagnose and treat COVID-19 come from HP’s savings from their usual budget due to a large reduction in other services which have been put on hold (such as elective procedures and outpatient care). HPs are paying hospitals for the care of COVID-19 patients on a per-diem basis, as is the case with any other patient in internal medical wards. The regular tariffs apply: the tariff for ICU care is higher than the tariff for internal medicine (IM) wards, and the tariff of the first three days in IM is higher than the tariff for day 4 and beyond. The MoH produced and purchased some ventilators from its own funds and has allocated them among the hospitals.

It is too early to be able to observe the changes in the distribution of healthcare spending, and so it is difficult to know if hospital inpatient care spending will change. While activity levels in medical and ICU wards have increased substantially, all elective procedures for patients in surgical wards have been put on hold. There might be shifts of spending from outpatient to inpatient care, although outpatient visits via online consultations are being paid as regular visits.

Private hospitals do not have internal medicine wards or emergency care. They are not performing elective procedures, for the time being, because patients refrain from going to public spaces. There is a plan to lend ventilators from private hospitals to public hospitals.

28.4.20 – health system funding for the foreseeable future:
Israel has been without a functioning elected government for the past year, hence no budget proposal has been approved for 2020 (instead, the budget is based on the 2019budget). This poses difficulties in planning for the long term. There has been an injection of 1 Billion NIS for the health system to cope with the pandemic, mainly for hiring more personnel, buying pharmaceuticals and personal protective equipment (https://www.calcalist.co.il/local/articles/0,7340,L-3800371,00.html).

April, 15th 2020: New payment tariffs and regulation for treatment of COVID-19 patients in hospitals
Since the beginning of the pandemic, the Ministry of Health has not changed the payment method for hospitals treating COVID-19 patients, but has revised the tariffs and procedure-related group (PRG) codes for certain services and visits to providers. PRGs are similar to DRGs, but classify patients based on the main treatment they undergo instead of the diagnosis.

Special COVID-19 wards were built in general hospitals during the first wave of the pandemic (between March and April, 2020). On April, 15th a new (special) per-diem payment code was set for COVID-19 patients. The COVID-19 PD tariff includes inpatient hospitalizations at COVID-19 special wards in geriatric and general hospitals, for patients tested positive for COVID-19 in moderate, severe conditions or ventilated. The tariff is higher than the regular PD tariffs of internal medicine wards, but lower than the ICU wards tariff. Moreover, the tariff is the same for any period of hospitalization (different from other PD tariffs, that are lower from the 4th day and over). The tariff was applied retrospectively for all COVID-19 patients, including those treated before the creation of the new tariff. 

The new COVID-19 PD code is excluded from the capping mechanism, i.e. there is no upper limit to number of treated patients or length of hospitalization. However, the lower cap still applies, meaning that hospitals have 95% of 2019’s income secured for 2020.

New PRG codes were created for virtual services both in- and out-patient visits (in hospitals and in the community), to be used temporarily during the pandemic. Virtual services include phone and video calls and were priced identically as physical encounters (despite some arguments that these encounters are shorter and do not involve use of medical equipment). For psychotherapy and allied medical professions, a minimum duration of the encounter was determined, identical to that of physical encounters.

In addition, the Ministry of Health provides personal protection equipment (PPE) to hospitals at no cost.