Sometimes we lose perspective in the health care debate, so maybe it would help to look at how other countries have addressed health care delivery and funding. This month we take a look at Israel and Switzerland. >>

There was a time in the United States—in the 1990s—when health maintenance organizations were the biggest thing in health care. Many hospitals and private practices were moving toward an HMO model of care, and it seemed as though the U.S. health care industry as a whole would shift to an HMO-driven system—which is how health care is deployed in Israel, a country that's been using HMOs as major care providers (and, later, the country's primary care provider) since before the state's inception.

The most obvious benefit of an HMO system is the coordination of care the organizations facilitate. There is a sophisticated level of communication that takes place between hospitals and practices; patient information is shared among care providers, so the surgeon in the hospital knows exactly what a patient's primary care provider has done for him or her in terms of tests and medication prescribed, and clinicians also have access to the patient's health history.

For a variety of reasons, HMOs did not become the savior of the U.S. health care system some predicted—although Kaiser Permanente remains a popular provider.

In Israel, labor unions established HMOs before the Israeli state was founded in 1948. The membership-based organizations became increasingly important as Israel implemented mandatory employer-provided health care for all working citizens in 1973; in 1995, the National Health Insurance Law in Israel made participation in one of the four Israeli HMOs compulsory for all Israeli citizens.

A progressive health care fund was set up through Israel's social security organization, the National Insurance Institute; the Israeli HMOs are overseen by the state, and Israeli citizens have the option of switching from one HMO to another once a year.

The National Insurance Institute collects and distributes funds to the HMOs based on the number of citizens covered by each plan and myriad other factors, including age distribution. Through these funds, every Israeli citizen is guaranteed health care—and like in Switzerland, supplementary health care plans also can be purchased, but directly from the HMO instead of through a private carrier.

Today in the United States, the Patient Protection and Affordable Care Act is attempting to address the lack of care coordination that's developed in the American health care system by providing incentives for medical practices and hospitals to adopt new procedures and technologies that lend themselves to increased coordination. It's also doing this by creating provisions for accountable care organizations, coordinated groups of health care providers that provide care for specific populations of patients and are accountable for the quality, cost and outcomes of that care.

The ACO component of the PPACA is tied to Medicare; PPACA has authorized the Centers for Medicare and Medicaid Services to create what's known as the Medicare Shared Savings Program.

There are some good reasons why PPACA might have gone the route of establishing an ACO program instead of treading the HMO path like Israel has done—one of them being sheer size.

“The pure volume and diversity of our constituency plays a role, including impoverished people, the elderly and other people living in rural and suburban areas. This makes any kind of universal health care difficult,” says Cyrus Chowdhury, chief executive officer and managing director of consulting firm CBPartners. “And culturally, we're so big on choice and difference—that kind of mentality is what drives Americans, and that's why I don't think a consistent benefits structure would really work across the entire American population.”

Furthermore, Chowdhury adds, although the structure of the HMOs in Israel and the United States might be consistent, how Israel funds their health care is very different.

“They don't rely 100 percent on employer and individual contributions to pay for the benefits,” he notes. “The government is providing the majority of funding to HMOs. So it's not really fair to say that Israelis have a private program with HMOs.”

And in terms of highly specialized care, Israel does have to outsource some of its health care. Certain rare diseases might require patients to travel overseas to treat their conditions—particularly to Asia, where many countries have highly specialized medical infrastructures through their medical tourism industries.

“The way their system is set up, you can still pursue specialized medical care in Korea or Malaysia,” Chowdhury notes. “You have to pay for your own flight, but your care will be subsidized through your HMO in Israel.”

Instant Insights /

Health Care Abroad Israel

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