U.S. policymakers looking to create a health system with a competitive private insurance market could look to Israel, which has has used its regulatory power to establish robust health coverage as a baseline protection for its citizens, according to a new Health Affairs blog.
Rachel Nisanhotz, David Chinitz and Sara Rosenbaum write that while there are obvious differences between the two countries -- Israel is comprised of only 8 million people -- there are ways that U.S. lawmakers could essentially "Americanize" the Israeli system to work for its specific population.
The nation could standardize benefits for qualified health plans, while plans should be allowed to assume measured risks on behalf of beneficiaries while holding benefits constant.
Policymakers, the authors said, should establish a true budget for basic health coverage and then adjust the actual terms of coverage to reflect budgetary realities.
Any reference plan, they said, should incorporate these basic coverage concepts, coupled with a mechanism for periodically updating the model as technology, population health needs and local circumstances warrant. States should continue to assume the primary role in determining coverage.
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Using a similar approach, Israel guaranteed universal coverage to its citizens, all while keeping costs in check and building in incentives to provide efficient care.
Perhaps mirroring the Affordable Care Act's individual mandate, as of 1995 every Israeli citizen is required to be insured through enrollment in one of four qualified, private, nonprofit health plans. The government pays the full premium, risk-adjusted to health status, which is financed through a combination of taxes and general revenues.
The Israeli system, according to the authors, facilitates good health outcomes by international standards while keeping costs largely in check -- healthcare comprises 7.5 percent of Israel's gross domestic product, or $2,300 per capita.
"Americans place great value on individualism, but so do Israelis," the authors write. "The Israeli case demonstrates that a system based on competing private but not-for-profit health plans providing standard coverage but with room for innovation can result in high levels of health status, consumer satisfaction, and democratic accountability."
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