Intended for healthcare professionals

Education And Debate

The second phase of priority settingGoodbye to the simple solutions: the second phase of priority setting in health careFairness as a problem of love and the heart: a clinician's perspective on priority settingIsrael's basic basket of health services: the importance of being explicitly implicit

BMJ 1998; 317 doi: (Published 10 October 1998) Cite this as: BMJ 1998;317:1000

The second phase of priority setting

Editorial by Klein

This article was presented at the second international conference on priorities in health care in London on 8-10 October 1998

This week sees the second international conference on priorities in health care in London. To mark the occasion we are publishing three of the papers that will be presented at the conference. Each illustrates, in a different way, how thinking about priority setting in health care has developed over the past few years. No longer is the search for a rational set of decision making rules thought adequate: the process is seen to be more complex.

Goodbye to the simple solutions: the second phase of priority setting in health care

  1. S⊘ren Holm, senior research fellow
  1. Department of Medical Philosophy and Clinical Theory, University of Copenhagen, DK-2200 Copenhagen N, Denmark
  2. Center for Ethics in Managed Care, Harvard Pilgrim Health Care and Harvard Medical School, Boston, MA 02215, USA
  3. aHebrew University-Hadassah School of Public Health,Jerusalem91120, Israel,
  4. bHadassah Medical Organisation, Jerusalem 91120,
  5. cUnit for Health Rights and Ethics, Gertner Health Policy Institute, Tel Hashomer 52621, Israel,
  6. dDepartment of Epidemiology, Ben Gurion University, Beer Sheva 84105, Israel

    A picture of a famous statue of a small angry boy in Frognerparken in Oslo adorns the cover of the second Norwegian report on priority setting in health care, published in 1997 (figure).1 It is not evident what has made him angry, but maybe he is a youthful politician who is angry because yet another report has claimed that questions about priorities have no easy solutions and somebody dares to speak the word rationing. Or he may be a junior healthcare economist stamping his foot because the QALY has been maligned yet again. Or he may be a citizen unable to understand that an affluent society cannot give sufficient health care to all those in need. All these reactions could easily be caused by the Norwegian report1—and by the report from the Danish Council of Ethics in late 19962 and several less official interventions in the Scandinavian debates about priority setting in health care in the late 1990s.


    Crying Boy by Gustav Vigeland, 1926-33

    These debates are characterised by mounting disenchantment with simple solutions to the problems and by a shift in emphasis from the product of priority setting to the process of priority setting. In this article I distinguish between two phases in these debates to understand how and why the arguments put forward in the recent second phase of discussions about healthcare allocation differ fundamentally from the arguments in the first phase (box). This analysis is based on the debates in Scandinavian countries—societies with well developed social security and healthcare systems that exemplify publicly owned and financed systems. This fact influences the details of the arguments and discussions, but the substantive conclusions probably apply to a wide range of publicly funded healthcare systems outside Scandinavia.

    Summary points

    Priority setting activity in Scandinavia has gone through two phases

    The first was based on the idea that it is possible to devise a rational priority setting system that will produce legitimate decisions

    The second phase has followed the realisation that the idea of devising a simple set of rules is flawed

    Thinking is now focusing on the priority setting process itself and its transparency

    Goodbye to the simple solutions

    The first phase in discussions and reports on health- care priorities was characterised by a search for priority setting systems which, through a complete and non-contradictory set of rational decision rules, could tell the decision maker precisely how a given service should be prioritised in relation to other services. QALYs, the Oregon approach, the Dutch system (based on a definition of necessary care),3 the Norwegian system of 1987 (based mainly on the severity of disease),4 and the Swedish system of 19955 are more or less successful embodiments of this ideal. In such a system a given decision is legitimate because it is made by following the rules of the system, and, since the rules are rational, the decision is also unassailably rational.

    The second phase of Scandinavian reports on priorities have shown that systems of this kind run into several kinds of problems, which make it highly doubtful whether they can ever be a rationally compelling way of making allocation decisions.

    Firstly, there are practical problems about the amount and quality of information needed to make the systems work and the impartiality of the decision makers. Experience, especially in Norway, has shown that doctors interpret severity in different ways and that they are willing to reinterpret their patient's disease state if it will improve the patient's priority.6

    Arguments informing debate on priority setting

    Phase 1

    There is a principled way of making priority decisions, and it is possible to devise a rational priority setting system

    Decisions made by applying the correct priority setting system are thereby legitimate

    Phase 2

    There is no principled way of making priority decisions

    Decisions made through the correct priority setting process are thereby legitimate

    The correct priority setting process is characterised by transparency and accountability

    Secondly, and more damagingly, there are fundamental conceptual problems with allegedly rational decision making systems. For example, the purpose of a public healthcare system is unclear. It is not there simply to maximise the amount of health in society (however we choose to measure health). It is not there merely to treat diseases (however we choose to define disease). It is not there solely to meet healthcare needs (however we choose to define healthcare needs). And it is not there to ensure equality in health status (however we choose to conceptualise equality).

    The goal of a public healthcare system is a complex composite of many goals, including fuzzy goals such as maintaining a sense of security in the population. There is no natural way to balance these goals against each other. We can state that one goal is more important than another in specific situations, but an attempt to raise one goal as the most important in all situations is implausible. This means that it becomes impossible to use a simple maximising algorithm as a basis for priority setting (such an algorithm requires either a single goal or a principled way of balancing a number of goals). This problem can be illustrated by looking at one of the often mentioned allocation criteria: the severity of a disease.

    The severity of a disease is open to different interpretations. Whether a disease is lethal or likely to lead to permanent handicap or disability is an aspect of its severity, but severity also includes current state of health (for example, whether there is severe pain or current disability), urgency of treatment, and also the possibility of treating the disease. The severity of the disease thus turns out to be a multifaceted concept; consequently it is a problematical basis for a simple priority setting system.

    The priority setting process

    If our priorities cannot be directly legitimised as the rational results of following rational rules, what should we then do? We have to make decisions in some way, and we also have to be able to defend them publicly.

    Reports written in this second phase have tried to argue that if our decisions cannot be made legitimate through the use of specific priority setting rules then perhaps they can be legitimised by creating a set of “meta-rules” that govern the process of priority setting.

    The Danish report of 1996 looked in detail at the current allocation process and found it wanting in several respects.2 There was no long term planning, allocation decisions were made in a piecemeal way, and many of the decisions were made by processes that were opaque to the general public. The Danish Council of Ethics claimed that these problems with the allocation process led to a situation in which vocal and interesting patient groups could get more than their fair share while other groups (such as psychiatric patients) were left without decent treatment and care. The council therefore proposed guidelines aimed at ensuring that the priority setting process was conducted transparently and in a way that took account of the interests of all groups, not only the most vocal.

    The Norwegian report of 1997 went further in specifying the elements necessary to implement a priority setting system.1 In Norway such a system has been in place since 1990, based on a system outlined in the first Norwegian report of 1987. 1 4 This lays down five levels of priority based on the severity of the disease and the possibility of treating it. For example, patients who have a condition which untreated would lead to “catastrophic or very serious consequences in the long run” have a legal right to treatment within six months if such treatment is available in Norway. Experience with this system shows that it has many failings, partly because serious consequences can be interpreted widely by doctors and partly because vocal patient groups can circumvent the system by putting pressure on politicians.

    The 1997 report recommends a fundamental revision of this system.1 Instead of a top down system with one overarching definition of necessary treatment and care, the report recommends a bottom up system based on specialty specific working groups. Each working group is given the task of defining severity, utility, and efficiency in its own specialty, from which it ranks the conditions treated in the specialty and recommends changes in priority. These recommendations are passed on to government, which decides on priority. This should be a continual process and the membership of the groups should be broad. One of the effects of implementing this system would be that professional groups, politicians, and administrators would have to state explicitly their reasons for making allocation decisions. As yet, this new system has not been implemented, but if it is it will be a radical experiment in transparent and accountable priority setting in health care.


    The debate about priority setting in health care in Scandinavian countries has not been changed—as if by a magic wand—by the fact that various official committees have proclaimed that simple solutions are theoretically flawed and practically impossible to implement. Health economists still extol cost utility analysis as the instrument to end the woes of health- care administrators and politicians, claiming that the treatment of the most serious diseases should receive the highest priority.

    This is not surprising. Talking about priorities and, by implication, rationing of healthcare resources is difficult. It means accepting that some citizens will not get treatment that is potentially beneficial to them. But it is, nevertheless, a public debate which every country with a public healthcare system will have to conduct. Otherwise rationing will take place without public input and control.


    Fairness as a problem of love and the heart: a clinician's perspective on priority setting

    1. James E Sabin (Jim_Sabin{at}, associate clinical professor of psychiatry
    1. Department of Medical Philosophy and Clinical Theory, University of Copenhagen, DK-2200 Copenhagen N, Denmark
    2. Center for Ethics in Managed Care, Harvard Pilgrim Health Care and Harvard Medical School, Boston, MA 02215, USA
    3. aHebrew University-Hadassah School of Public Health,Jerusalem91120, Israel,
    4. bHadassah Medical Organisation, Jerusalem 91120,
    5. cUnit for Health Rights and Ethics, Gertner Health Policy Institute, Tel Hashomer 52621, Israel,
    6. dDepartment of Epidemiology, Ben Gurion University, Beer Sheva 84105, Israel

      From the clinician's perspective cost effectiveness analyses and priority setting exercises are highly abstract compared with the experience of taking care of patients. We encounter the ill person directly, convey the priorities, and deal with the impact on patient and family. For those of us who take direct care of patients, priorities and rationing—at their deepest level—create what is ultimately a problem of love and the heart.

      Combining passion and logic

      • Priority setting and rationing will not work without the support of clinicians

      • Ethical clinicians can (and should) accept fair priority and rationing policies

      • Implicit rationing is not a viable strategy for the 21st century

      • Societies must deliberate about how to make priorities and rationing work best

      To be truly excellent clinicians we must love our patients, and that makes us want to do as much as possible for each person's health. To be truly responsible citizens, however, we must want to do as much as possible for the population's health within the available resources. This commitment to fairness requires us to embrace priorities and rationing. In the United States we call love for patients fidelity and seeking fairness for the population stewardship. Since priority setting and rationing inevitably deprive identifiable people of potential benefits, the question for practising clinicians is whether they can embrace fidelity and stewardship at the same time in their dealings with patients.

      I believe the answer is yes and disagree with Kassirer's recent argument that doctors should not adopt a population based ethic.1 Embracing both fidelity and stewardship, however, poses at least as much challenge to the heart as to the mind. Correspondingly, the four step analysis that follows emphasises passion as well as logic (box).

      Summary points

      Because they care for the patients who present to them, some clinicians think that their only duty is to those patients (fidelity) and eschew stewardship for society's resources

      In the United States this has led to an adversarial approach, splitting fidelity and stewardship

      Patients understand the need for priority setting if the case is made simply and honestly

      Clinicians and managers must share a common language with the public and be explicit about the limits of care

      Clinician support for rationing

      Political leadership is a key factor in helping the public to understand the need for priorities and rationing. In the United States Dr John Kitzhaber, now the governor of Oregon, was crucial in helping Oregon carry out its justifiably famous priority setting process. But clinicians are at least as important as political leaders in shaping public attitudes. Every clinical appointment, whether with a general practitioner, a specialist, or a district nurse, is an opportunity for patients to learn about priorities and rationing and for clinicians to learn what these policies mean in their patients' lives.

      When we clinicians support policies about priorities and rationing we can be educators and salespeople. But when we oppose the policies we can undermine them and foment resistance. We may not always be wise in our judgments, but no national approach to priorities and rationing will work without our strong support.

      Fair priority and rationing policies

      On the clinical front line we ask ourselves: Are these priorities ethical for the patient who is in front of me now? How can I discuss the policy openly and honestly? To be able to practise in a health system that sets priorities and rations we need a professional ethic that can give us guidance for these questions.

      The United States provides a useful test case here. It probably has the world's strongest culture based on individual rights. It certainly has the least inclusive healthcare system among developed nations. However, an experience at the health maintenance organisation I have practised with for 23 years taught me that even in a culture as individualistic as that in the United States clinicians and patients can understand and accept priorities and rationing if the rationale is clear and readily understandable.

      Six years ago my colleagues in mental health—with the advice of the population we serve—concluded that we needed to offer more outpatient care to our sickest patients. Although we were not given any new money to do this, we were allowed to reorder our service's priorities. We concluded that we could increase services to our sickest patients only by requiring a new payment from the less sick after their eighth outpatient appointment.2

      After we made this change my colleagues and I had innumerable conversations with our patients about the new policy. With patients who were eligible for more services we said something like: “The bad news, as we know, is that you have the misfortune of suffering from a severe illness [schizophrenia or a similar severe ailment]. The good news is that we now have more outpatient treatment resources available to us.” With our healthier patients, who now had to make a payment after eight outpatient sessions, we had the opposite conversation: “The good news is that even though you have some significant problems you do not have a severe illness like schizophrenia or manic depression. The bad news is that after eight sessions there is now a new fee.” No one was happy about paying the new fee. But virtually no one thought that the policy was unfair.

      We did not explain the priority system by presenting cost effectiveness analyses or complex ethical arguments. We used simple, commonsense terms that made fundamental human sense. The policy had the same kind of obvious reasonableness as when we interrupt an appointment with one patient to attend to an emergency with another.

      To support priorities and rationing, clinicians must be able to see the policy rationale with the same emotional clarity and immediacy with which we see our individual patient's needs. To explain the policy we must be able to put it in simple terms that do not presuppose a university degree in economics or philosophy.

      We clinicians can love our patients and the population they are part of only when we can comprehend the needs of both in emotional as well as clinical and epidemiological terms. Being able to do this depends partly on whether our clinical education and professional ethics include public health as well as individual care values.3 But it depends at least as much on a political process that addresses priorities and rationing in the same caretaking spirit that the best clinicians apply in the care of their patients. This requires a form of political leadership that has been comparatively rare to date.

      Implicit rationing is not viable

      Although I strongly support openness about priorities and rationing, there are two strong arguments for implementing them implicitly—that is, not discussing them in the clinician-patient relationship.4

      Firstly, withholding benefits is socially divisive. Being explicit about priorities and rationing requires acknowledging that there are good things that a healthcare system could do for identifiable people that it will not do.5 In the United Kingdom explicitness leads to shroud waving. In the United States it leads to lawsuits. Neither is pleasant for policymakers.

      Embedded Image

      Secondly, patients (and clinicians) prefer to see clinicians as giving, not withholding. We clinicians chose our careers to care for patients, not to implement priorities. And sick patients need to see their clinicians as devoted caretakers, not as coldly utilitarian cost effectiveness analysts.

      Since the kinds of expectations patients in the United States have about disclosure and active participation in treatment planning almost certainly predict the worldwide trend for the next century, the United States can provide useful lessons about implicit rationing. Fifty years ago the phrase “doctor's orders” was used with great seriousness. What the doctor said, the patient did. Now we use the term only in quotation marks, as a quaint and humorous relic. Patients in the United States expect to be told the medical facts about their conditions and the policy facts about what the healthcare system will and will not do for them.

      Personal computers and the internet drive the nails into the coffin of implicit rationing. The internet gives patients immediate access to worldwide information about healthcare policies and choices. This means that within a short time implicit rationing will be impossible. Explicitness is the inevitable direction for priorities and rationing. Clinicians and political leaders will be wise to shape the process rather than waiting to have it forced on them. I believe that this is the best climate for practice. But even if it is not it is nevertheless the direction all societies will be moving in.

      How to make rationing work

      Setting healthcare priorities and rationing is an unavoidably messy, conflict ridden, ultimately tragic social process.5 Different societies will conduct the process in accord with their own political culture. But whatever approach a society chooses, it is not likely to succeed without some form of deliberation among the concerned stakeholders.6

      We in the United States have conducted a social experiment in which we tried to shape health care without explicit priorities or deliberative process. Motivated by the reluctance of the medical profession to accept the need for priorities and rationing, and the conviction held by influential physicians that ethical clinicians must advocate any intervention of possible benefit to their patients,7 the United States has experimented with what is best described as an adversarial system of priority setting. We have asked our insurance companies—the United States version of district health authorities—to set priorities for us.

      Here is how the adversarial form of managed care works. Physicians recommend services for their patients. Insurers decide whether the service will be covered. Physicians act as pure advocates. Insurers make decisions in the light of the available funds. Physicians hold to fidelity. Insurers take care of stewardship.

      The United States's experience shows that this adversarial approach results in a high degree of public distrust of the system itself.8 How could it be otherwise? Since patients largely trust their clinicians then of course they distrust a system in which their clinicians petition the insurer for coverage and get turned down. Whether or not the insurance decisions and policies can be justified by ethical reasoning and cost effectiveness analyses, splitting fidelity from stewardship and placing them in opposing camps invites patients to see their clinicians as impotent and the system as unfair. A system that splits fidelity from stewardship simply doesn't work.

      The American system commits itself to providing medically necessary treatment. We have skirted, however, the fundamental question of how to define medical necessity. Is any intervention that physicians believe will benefit their patients medically necessary? Many doctors define the term this way. Does medically necessary mean worthwhile in the light of the available resources and needs of the population? Many insurers define the term more like this. Except in the state of Oregon, however, the United States has had no open debate on what standards we will use for necessity in medical practice. In the absence of debate, the public, sensing the wide disparity among definitions and realising that unacknowledged rationing decisions are being made, has responded with anger, cynicism, and distrust.

      To create the necessary dialogue about priorities and rationing, societies must learn how to do what a popular book on corporate management calls “replacing the tyranny of the OR with the genius of the AND.”9 American clinicians call the managers who concern themselves with budgets and priorities bean counters. A British physician told me that management is the syphilis of the NHS. I am sure that clinicians from other countries can add choice terms in other languages. And I am equally sure that managers have just as many disparaging terms for clinicians.

      Until clinicians, managers, and other stakeholders find a common language for deliberating together about priorities and rationing, we cannot expect the public to understand and accept limit setting policies.10


      I believe that our path towards societal resolution of the conflicts between individual and community needs and desires demands more of the heart than the brain. Clinicians are inextricably in the midst of these conflicts. Our distress with priorities and rationing must be understood as crucial data on a social process, not as resistance to be overcome. Patients and society need clinicians to love both the individual and the collective and need to join with them in deliberating about solutions to this painful but ultimately unavoidable conflict of the heart. The key requirements are an expanded healthcare ethic11 and courageous political leadership.


      Israel's basic basket of health services: the importance of being explicitly implicit

      1. David Chinitz, lecturera,
      2. Carmel Shalev, directorc,
      3. Noya Galai, lecturerd,
      4. Avi Israeli, director generalb
      1. Department of Medical Philosophy and Clinical Theory, University of Copenhagen, DK-2200 Copenhagen N, Denmark
      2. Center for Ethics in Managed Care, Harvard Pilgrim Health Care and Harvard Medical School, Boston, MA 02215, USA
      3. aHebrew University-Hadassah School of Public Health,Jerusalem91120, Israel,
      4. bHadassah Medical Organisation, Jerusalem 91120,
      5. cUnit for Health Rights and Ethics, Gertner Health Policy Institute, Tel Hashomer 52621, Israel,
      6. dDepartment of Epidemiology, Ben Gurion University, Beer Sheva 84105, Israel
      1. Correspondence to: Dr Chinitz

        Yours is not to complete the task,

        Yet neither are you free to desist from it.

        Ethics of the Fathers, chapter 2

        Israel's national health insurance law, which came into effect in 1995, is a major policy reform. 1 2 In this article we focus on one aspect which, as in the case of health policy reforms elsewhere, has emerged as both central and problematic—namely, determining and updating the basket of services guaranteed to citizens under the law. We conclude that the Israeli case suggests a proposition somewhat different from that proposed by Mechanic at the last conference on priorities in health care.3 In particular, it supports the notion that health reforms driven by concerns about efficiency inevitably lead to a perceived need for explicit rationing, which in the end is carried out implicitly. The myth of explicit rationing lends legitimacy to decisions made implicitly.

        Summary points

        Israel's attempts to control costs in health care led to an explicit rationing process, which in the end was carried out implicitly

        The National Health Insurance Law 1995 specifies a comprehensive basket of services that sick funds must provide

        Because of huge funding deficits virtually no new services were added to the basket, despite many requests

        Attempts to restrict services provoked political and public reaction,and ultimately the government allocated funds to admit a further 15 drugs to the basket

        Eventually, sick funds were given the ability to levy copayments and have begun to limit access and choice

        Framework of national health insurance

        The National Health Insurance Law 1995 was designed to build on longstanding features of the Israeli health system while correcting aspects that were seen to be contrary to equity and efficiency. Until the introduction of the law, 96% of the population (nearly six million people) were insured by four non-profit sick funds. With a high level of medical services and a good endowment of doctors (more than 3 doctors per 1000 population), Israel was spending about 8.8% of its gross domestic product on health.4 Despite nearly universal coverage and favourable health input indicators, pressure for reform built up during the early 1990s because of increasing financial deficits in the largest of the sick funds, inequity due to selective enrollment by some of the funds, and growing private financing of health services.2

        Under National Health Insurance all citizens are required to join one of the sick funds, which now must accept all comers. Citizens may switch sick funds once a year, introducing an element of competition. Sick funds receive a risk adjusted (based on age) capitation payment from the government for providing a standard basic basket of services defined by law. The basket is comprehensive, covering preventive care, as well as almost all acute care in the community and in hospitals. There is no price competition among the funds over provision of the basic basket: sick funds may charge extra premiums only for supplemental insurance that does not cover services included in the basic basket.

        Financing the basic basket

        The law sets the cost of the basket together with an index for updating this amount each year. If revenues from earmarked health taxes are insufficient to cover this cost the government is required to make up the difference. For reasons described elsewhere,5 the amount the government is required to provide from general taxes is a constant source of controversy despite this attempt to guarantee adequate funding. Partly as a result, the health system under national health insurance has a large deficit. Financial pressure has thus made the question of updating the basket both more salient and more difficult. In particular, arguments rage over whether and by how much the budget should be adjusted each year, over and beyond inflation, to cover new medical technologies as well as the growth and aging of the population.

        The law states that services may be removed from the basket only by approval of parliament and that new services may be added on the recommendation of the minister of health, subject to approval by the minister of finance and parliament. The law entitles the minister of health to set up a committee dedicated to detailing the law in terms of physical and temporal access, and it also establishes a multisector national health council charged with advising the government on health issues, including the basket of services.

        Stagnating explicitly

        The main result of these legislative provisions was almost total stagnation in the basket of services. Despite numerous requests to expand services, especially by adding new drugs, only two drugs had been added by December 1997. Their inclusion was due to aggressive legal action taken by an organised group of patients with multiple sclerosis. Attempts by the ministry of health to attach administratively mandated clinical guidelines as conditions of access never withstood legal challenge. Such guidelines can supersede a doctor's orders only if they are explicitly included in the list of services attached to the National Health Insurance law.2 In the meantime, the special committee created to detail the law met infrequently, had no major impact, and ultimately was dismantled as part of legislative activity described below. The national health council was equally ineffective.

        During this time sick funds either kept strictly to the letter of the defined basic basket or offered services beyond the basket only as part of competitive behaviour. For example, some funds offered coverage of the cocktail of drugs for AIDS before it was officially covered. Later on, however, these funds withdrew coverage, creating confusion among the public and a groundswell of demand for inclusion of these services.6

        Expanding implicitly

        While the policy instruments defined by the National Health Insurance law failed to function, the deficits of sick funds continued to grow, partly through the provision of services not included in the basic basket. Budget officers from the ministry of finance tried to fill the policymaking deficit by including major structural changes in the National Health Insurance law in the annual Economic Arrangements Bill, which accompanies the annual state budget proposal. Passage of this bill is a condition for passage of the entire budget; its defeat is tantamount to a vote of no confidence in the government.2

        The ministry of finance explored several approaches to cutting or restructuring the basic basket as one way of reducing pressure on health budgets. A proposal to remove “non-essential” services from the basic basket and transfer them to voluntary supplemental insurance was withdrawn under charges that this would create a two tier health system. The ministry then suggested removing the detailed list of services from the law, leaving only general categories in the basic basket. Opponents claimed that this undermined the basic principle in the law of a guaranteed basket of services. The Economic Arrangements Bill 1998 included a proposal to allow the sick funds flexibility in determining their own service basket, subject to regulation by the minister of health.

        The bill then became the focus of intense public debate and activity on the part of interest groups. Coalitions of consumers' groups, specific disease groups, and human rights organisations lobbied for defeat of the health clauses in the proposed budget.7 At the same time a delegation of patients seeking coverage of drugs not included in the basic basket was received by President Ezer Weizman. In a nationally televised event Tal Levi, a young girl with cancer, pleaded to receive drugs not currently covered (figure).8 A few days later the government approved the addition of 15 drugs to the basic basket, at an estimated cost of 150 million shekels (£22.9m; $38.9m), or about 1% of the cost of the basic basket.9 The list of drugs to be added was based, in part, on the work of internal ministry of health committees relying on cost effectiveness studies to develop priorities for adding services to the basic basket. A drug for the treatment of Alzheimer's disease, which had been sought by families of patients with this disease, was not included—and the protests of the families were well covered in the news.


        Tal Levi with President Weizman appealing against cuts to the health budget

        In the wake of these developments the minister of welfare demanded to be part of a ministerial committee on health affairs, together with the ministers of health and finance. The minister of foreign affairs similarly demanded to be included (perhaps because the minister of welfare was from a rival political party). The very suggestion of such a committee elicited cries of politicisation, and the idea was abandoned. In the end the proposals of the ministry of finance were altered to allow flexibility while maintaining the current basic basket as a firm standard minimum: thus the only flexibility allowed is to add services. This essentially repeated the existing situation. Since early in January 1998 no more services have been added to the basic basket, though AIDS has been added as one of several conditions reimbursed separately from the overall capitation payments. Moreover, 150 million shekels will be allocated in the coming budgetary year for new services. A committee made up of representatives of the sick funds, relevant government ministries, and public figures will deliberate on allocation of these resources. Whether the increment will become a permanent annual adjustment remains to be seen.

        What did pass in legislation were proposals to permit sick funds to levy additional charges, subject to approval of the parliamentary finance committee. Sick funds have proposed, and received parliamentary approval, to levy new copayments for drugs as well as for visits to specialists and outpatient clinics. At the same time sick funds have stepped up their efforts to limit access and choice for insured people—for example, by seeking to channel them to their own, as opposed to hospital, outpatient clinics. These attempts are perhaps a form of implicit rationing and have evoked some public protest.

        Explicit supports implicit

        Seen pessimistically, these two processes—nearly three years of stagnation followed by intense debate that led to rapid and episodic expansion of the basic basket—simply reflect the brutal realities of budgetary politics. Seen optimistically, as an example of the “intelligence of democracy,” the system has arrived at the conclusion that 150 million shekels should be an annual allotment for new services to be added to the basket. Ministry of health committees can now suggest priorities for use of the funds. Services not included in any given round are not rejected explicitly: they may have their day in another round. The discussion of additions to the basket was explicit, while the system has implicitly imposed some limits. The process received unprecedented media coverage. We are unaware of any studies on public reaction to the process, but our own research suggests that, while the Israeli population places high priority on almost all health services, there is some willingness to consider limitations in the face of budgetary constraints.

        Needless to say, the situation is far from stable. Budget deficits in the health sector continue to grow, and pressures to add new services to the basket do not subside as the needs of a growing population and the continuing growth of medical technology stoke demand. There are obviously no simple answers. The question is whether the policy process concerning the basic basket described above represents a viable and accountable means of combining explicit professional methods of priority setting with the implicit “muddling through” of political processes.10 The Israeli case suggests that explicit and implicit approaches to rationing and priority setting are not exclusive alternatives but rather complementary tools which support each other.


        This paper benefited from interviews and discussions with officials from the ministry of health and ministry of finance, members of parliament, and consumer representatives, and we thank all of those concerned for their time and input.


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