2017 - Dov Chernichovsky

Israel’s population is aging quickly; the share of seniors in the population, especially those aged 70 and over, is projected to double by 2035. Due to this, functional impairment — which is naturally higher among the elderly — is expected to rise 16 percent faster than growth in Israel’s population. This will increase the need for in-home as well as institutional long-term care. The changing ratio between age-groups — more people aged 70 and over, in relation to those aged 15-69 — is expected to increase the long-term care challenge as well as the burden on households and on the economy as a whole.

This paper discusses the main challenges currently facing long-term care in Israel: (A) the lack of universal coverage; (B) the multiplicity of authorities charged with overseeing and managing the sector; and (C) the lack of preparation for the changing demographics of the future. This paper also looks at current Israeli government proposals for regulating the field, and points out the inconsistencies and weaknesses in those proposals.

This introductory chapter is divided into several sections. The first part is about developments in financing of Israel’s healthcare system. The second part discusses several of the stated goals for improving the system, as they are outlined in the Ministry of Health Plan for 2016 (Ministry of Health, 2016b):

• Increasing access to services and choice in the public system (Goal 1.1 in the plan)

• Preparing the healthcare system for the aging of the population (Goal 4.1 in the plan)

• Adjusting the healthcare system to changes in the characteristics of the population due to chronic illness (Goal 4.3 in the plan)

Avialable in Hebrew here.

The health of the Arab Israeli population is improving, along with that of Israel’s Jewish population. In terms of life expectancy and infant mortality rates, the Arab Israeli population ranks highest in the Arab and Muslim world. However, there are still sizable gaps in infant mortality rates (4 per 1,000 live births) and life expectancy (4 years) between Jewish and Arab Israelis — especially Muslim Arabs. Moreover, these gaps are not shrinking in absolute terms; with regard to life expectancy, particularly for men, the gap is actually widening.

The relatively high incidence of congenital disorders in the Arab Israeli population may explain the infant mortality gap between the sectors. This gap is a major factor in the life expectancy disparity between the two populations, and in the disparity’s persistence. Additionally, a relatively high incidence of road accidents and chronic, smoking-related lower respiratory disease among Arab Israelis may explain the growing life expectancy gap between the two populations, especially for men. Diabetes also appears to be a major cause of mortality that distinguishes between the Arab Israeli and Jewish populations — accounting for a 2.25-fold difference in fatality rates.

In general, the socioeconomic advancement of Israel’s weaker populations, and the narrowing of economic gaps, with all of its implications for healthy behavior and healthcare services, will help reduce the average health disparities between the two groups, since the Arab Israeli sector is disproportionately represented in the country’s weaker populations. This long-term mission requires intensive preliminary activity on the part of the state to improve accessibility to healthcare services, especially to medical specialists, in Israel’s geographic periphery, through allocation mechanisms (risk adjusted capitation and investment) and incentives (specialist wages).

At the same time, the particular cultural issues and needs of Israeli Arabs and the various sub-populations among them cannot be ignored. Attention should be focused on quality care, including prevention, of risk and mortality factors that characterize the Arab Israeli population — congenital disorders, accidents and smoking-related diseases. No less important is a focus on obesity and diabetes. Community clinics in Arab Israeli areas should be invested in to implement this care. Regarding challenges in medical access related to language, the large-scale presence of Arab Israeli employees in the Israeli healthcare system should be utilized across the system’s entire array of professional services, to improve the health status of this population.

Pictured above: Knesset Meeting: Left to right: Prof. D. Chernichovsky; MK Rabbi Y. Litzman, Health Minister; MK Y. Perry; and MK T. Ploskov

While long-term care has been a pressing issue in Israel for some time, it assumed center stage in Israeli politics in recent weeks as the Ministry of Finance decided to abolish, as of Jan. 1st, 2018, the group insurance held by 1 million Israelis through their places of work. This action has exposed this group, in addition to 3.5 million other Israelis who have no private insurance, to under-coverage for long-term care. Earlier this year, a Taub Center research team -- Prof. Dov Chernichovsky, Dr. Avigdor Kaplan, Mr. Eitan Regev, and Prof. Yochanan Shtessman -- published a study on the state of long-term care in Israel. The study, which can be found here in Hebrew or here in English (abridged), concludes that long-term care in Israel is neither efficient nor equitable and sustainable due to a combination of fragmented entitlements and poor oversight, with heavy reliance on private finance. The research team proposed the establishment of a universal basic long-term care basket funded by mandatory contributions, and overseen by a single authority.

Since the publication of the study in February 2017, Prof. Chernichovsky, who led the work on the basis of previous work, which can be found here, met with the Minister of Finance, Mr. M. Kahalon, the Minister of Welfare and Social Services, Mr. H. Katz, and Minister of Health, Rabbi Y. Litzman. In addition, Prof. Chernichovsky has had meetings with parliament member MK Itzik Shmuli, who is leading an initiative to establish universal long-term care. Prof. Chernichovsky was also invited by MK Yaakov Perry and MK David Amsalem to speak as an expert at the Knesset Caucus to Advance National Preparedness to Support the Aging Population. Following the caucus MK Tali Ploskov invited Prof. Chernichovsky to serve as an economic advisor to a Knesset sub-committee that she heads regarding elderly wellbeing. Prof. Chernichovsky has also appeared on Israeli television regarding this issue. The segment can be found here (Hebrew).

For some additional background on the issue please follow this link to the Jerusalem Post article (English) from earlier this year, regarding the issue.

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The Risk Adjustment Network met in the Hague, Netherlands, from October 11th to 14th, 2017. The meeting’s program is attached, as is the presentation I gave titled, “Risk Adjustment, Big Data, and Machine Learning.” The presentation, co-authored with Alvaro Riascos, Los Andes University, Colombia and Ran Bergman, Deloitte, Israel, is our preliminary effort in this direction.

More work is planned with one of Israel’s sickness funds (health care plans) with the goal of (a) establishing the advantages and limitations of Big Data and Machine Learning vis a vis more conventional statistical methods, and (b) identifying big data typologies for consistent estimation across systems and over time.

My other work on risk adjustment includes:


        • “Changes in the Allocation of Healthcare in Israel to Advance Equality Between the Center and the Periphery: Are they affected?”(Hebrew)

      • “Health Status and Healthcare System Budgeting in Israel in the Context of Disability-Adjusted Life Years (DALYS)”(English)(Hebrew)


The first article concerns the underdeveloped nature of Israel’s risk-adjusted allocation formula, especially its inability to help combat growing regional disparities.The second piece suggests that, in spite of its shortcomings, the overall allocation – by age groups – is more consistent with combating years lost due to disability – measured in Disability Adjusted Years of life lost – Dalys- rather than combating mortality.


Additionally, last year I was part of a World Bank effort in Chile which dealt with risk adjustment. This was in response to a government request for assistance in organizing the financing of the health system. This work is another good example of using risk adjustment to finance health systems and solve real world problems.

b_470_0_16777215_00___images_17_10_RAN-Meeting_The_Hague_2_komp.jpgFor more information on the meeting's full program please see the first link below.

To view the full presentation given by Professor Chernichovsky, and co-authored with Alvaro Riascos and Ran Bergman, please see the second link below.

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