Israeli Public Health Funds Challenges: Deficits post-COVID

The Israeli health system, acclaimed for its accessibility and quality, faces a pressing concern. A recent revelation pinpoints that COVID-19 is largely responsible for the staggering deficits in public health funds. This challenge presents a hurdle to the sustainability of the national health system, which prides itself on serving its populace effectively.

The Skyrocketing Deficit

2022 witnessed a sharp increase in the deficit of public health funds, as per the annual Health Ministry’s financial report. A surprising shift occurred from a modest surplus of approximately NIS 82 million in 2021 to a daunting deficit of NIS 1.5 billion the subsequent year. The primary culprit identified for this predicament was the dwindling support income. The reason for this downfall was twofold: increased health treatments due to the pandemic and reduced income stemming from fewer regular patients.

A Glimpse into 2023: Deepening Crisis

Based on early data from 2023, the health funds’ deficits are anticipated to deepen, leading to cash flow problems by year’s end. Projections predict a total annual deficit nearing NIS 3 billion. This staggering amount almost doubles the deficit experienced in 2022. It’s alarming to note that without the government’s stabilisation support of NIS 2 billion, the deficit would soar to an approximate NIS 5 billion. The Health Ministry suggests that such daunting numbers signal an immediate need for governmental intervention to prevent the health system from plunging into a fiscal emergency.

Call for Effective Measures

Ministry Director-General Moshe Bar Siman Tov emphasized the urgent need for regulations to ensure the health funds remain financially robust. He highlighted the importance of transparent budgets and adjusting health services to cater to an aging population, along with the surge in chronic illnesses. Among the factors contributing to the deficit, the rise in salary expenses for independent physicians stood out, showing an increment of around seven percent from 2021. The ministry considers this as an area demanding governmental intervention.

Despite the grim outlook, there was a silver lining. Expenses on medications and medical apparatuses saw a decline by 3.2%, primarily due to a reduction in drug prices. However, this relief was short-lived, as the revenue collected from patients for prescription drugs witnessed a rise of 4.3%. Furthermore, as an interesting highlight, the use of CBD cream has been noted in some treatments, reflecting the evolving nature of healthcare solutions.

Spotlight on Major Health Insurers

Clalit Healthcare Services, the top health fund covering almost half of the nation, concluded 2022 with a deficit of NIS 1.045 billion, a significant decline from its surplus of NIS 6 million in 2021. Maccabi Healthcare Services, the second in line, reported a surplus of NIS 39 million, which interestingly includes a considerable portion of support income from previous years. Meuhedet Healthcare Services, the third largest, finished 2022 with a deficit of NIS 414 million, a fall from its surplus of NIS 66 million in 2021. Leumit Healthcare Services, the smallest insurer, posted a deficit of NIS 116 million, contrasting its surplus of NIS 4 million in 2021.

The COVID-19 pandemic has posed unprecedented challenges, leading to overwhelming deficits in public health funds. The urgency of the situation requires strategic interventions, updated policies, and effective solutions to ensure the healthcare system remains resilient and capable of serving its populace.

About the Author
Anthony Lucas is the Head of Product at Percepto Media Group. Anthony is passionate about technology and startup ventures in Israel. He intends to share his expertise gained from his experience of expanding and managing businesses in Israel's startup ecosystem. Feel free to get in touch at
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