'Catastrophic' growth of health care burden pushes families into poverty

from the Jerusalem Post

Judy Siegel-Itzkovich , THE JERUSALEM POST Jan. 21, 2008

The government's reduction in subsidies for medical services is forcing more and more Israelis below the poverty line as they struggle to cope with these expenses.

A new report released Monday by a senior researcher at Jerusalem's Taub Center for Social Policy Research found that 2.4 percent of Israeli households - 48,000 families and 161,000 people - spend more than a fifth of their expenditures on health care.

"This expenditure is catastrophic," asserted Prof. Dov Chernichovsky, the author and a leading health economist at Ben-Gurion University of the Negev, "as it is liable to become a heavy and impossible burden" on the income of these families at the expense of their many other needs.

In addition, the report said that some 28,000 households and 93,000 people have dropped under the poverty line because they have to pay out of pocket for vital medical services, including co-payments demanded by health funds and supplementary health insurance from their health funds. Private expenditures for these services "deepens poverty, and is equal to levying an additional 7% tax on poor families," said Chernichovsky.

The study found that a growing number of Israeli poor avoid
purchasing important medical services and medications because they can't afford the co-payments. In addition, the growing share of private expenditure for health care has led to inflation in the costs of these health services, increasing the effect of public-sector cuts.

Prof. Ya'acov Kop, director of the independent Taub Center (which is funded by the world Joint Distribution Committee), explained that subsidies for health services are intended to promote social equity and control the growth of national health expenditures. Public subsidies are meant to give the poor the chance to get the same basic medical services as those available to the wealthy and to reduce the consumption gap between the rich and poor.

Chernichovsky criticized the fact that national health expenditures by the state as a percent of the gross domestic product have declined since 2001. The government's rate of health expenditures is among the lowest in the OECD (developed) countries.

In 2006, only 64% of health expenditures were covered by the government, compared to 74% in 2001.