Intended for healthcare professionals

News Roundup [abridged Versions Appear In The Paper Journal]

Private medical services in state hospitals in Israel to be shut down

BMJ 2002; 324 doi: (Published 02 March 2002) Cite this as: BMJ 2002;324:504

Private Medicine in Public Hospitals

When talking about Sharap-Sharam we mean letting doctors and nurses
offer "private services" within government hospitals. This is NOT straight
forward "private medicine". Thus the professionals who promote this idea
really mean selling their services for good money within goverment
property that belongs to the public who paid for it with tax-money. The
deviated idea is that doctors and nurses are entitled (why?) to run a
business on the risks and investment of government and well intending
public donors.

Private Medicine is a most wellcome idea provided it is performed in
facilities paid for by private for-profit investors. This is not what the
IMA and most doctors want. Rather they leave the government to take the
risks while they use the hospitals for their own purposes and profit.

In addition to the fact that this creates unacceptable inequalities
within the public system it has several untowards economic implications.
In Israel more than 60% of the public has "complementary insurance". The
hospitals which are engaged in those practices "persuade" such patients to
use this insurance to pay for the "improved" services of a "private"
doctor. This inflates the costs of the average care and thus diminishes
the buying power of the public in general . An integral phenomenon are the
artificially long waiting lists which create an incentive to reduce the
choice by patients of the less profitable public services. This amounts to
"concealed unemployment" during the hours which are allocated to the
general public, thus again increasing the pressure on patients to choose
the shorter venue.

While the proponents of Sharap-Sharam claim that there is an extra
income to the hospitals the truth is different. Today they speak of 10% of
the patients in Sharap-Sharam. In fact the IMA demanded officially that 30
-35% will be available for this practices. If we wanted to build special
wards for this kind of service the cost of construction of a general
hospital today in Israel is about US$ 2500 (making the total cost quite
prohibitive) , on top of this the hospital invests in labor costs and
other services for which it is not re-imbursed. The Sick Funds in Israel
refuse paying for the hospitalisation of such patients by the tax-payer

One major point is the lack of transparency of the flow of resources
from the general public budget of the hospital to cover the expenses for
the private services . If anything should be done is to have two legal
entities within the hospital, one that sells services ( the public
hospital) and one that buys them and provide them to the "private
patients". In other words a prerquisite for the implementation of these
programs should be transforming the government hospitals to independent
legal trusts with their board of directors, accountant and comptroller.
The "private trust" will also have a similar organisation. When fiscal
reports of the two trusts will become public it will be evident that the
costs to the public hospital will make the whole idea economically

Competing interests: No competing interests

02 March 2002
Dan Michaeli
Chairman, Board of Directors, Clalit Health Services
101 Arlozorov st, Tel Aviv 62098, Israel