Israel’s Two Tiered Health Care System

Foreigners are in the top tier:

People from Easmedical-travel1tern Europe, Cyprus and the United States have been flocking to Israel’s public and private hospitals over the past five years for inexpensive, high-quality medical treatment.

But this cash cow for the Israeli health care system may be in jeopardy.

…[M]any worry that the lure of foreign money is creating a two-tiered medical system, where hospitals shift the best doctors and facilities to the high-paying customers and lessen service to Israelis. (USA Today)

Comments (12)

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  1. Adam says:

    That seems like it would be a constant danger, not just when medical tourism is occurring but also when there is significant inequality in a country.

    • JD says:

      The question is, is it a bad thing? Or is everyone better off because of it? It depends a lot on how Israel’s health care system is structured. There are definitely benefits to letting this system develop. If Israel decides to act against this system, these benefits will be foregone.

      • Adam says:

        It depends how it functions in practice. If it leads to a diminution of care for the less-fortunate then it is bad. If the capital is used to boost the whole system then it can be good.

  2. Jimbino says:

    What a nutty thing to worry about. It’s like your mother finding out that others outside the family want to buy her home-baked bread.

    Selling to them doesn’t mean her family needs to go without bread: she can raise the price and use the proceeds for other things her family needs or desires, she can teach her kids to participate in the baking, she can hire and train bakers and she can sell franchises.

    Speaking of franchises, we Amerikans should encourage these Israelis to open clinics in Walmart and Costco instead of throwing our wealth down the Obamacare rathole.

    • JD says:

      Right, the way this debate is being predicated is ridiculous. Like I said previously, the effects of this really depend on how their system is structured. I think they be better off letting this develop and “wrapping” the “second-tier” around it. By that I mean that they should try to maximize the benefits of the externalities.

    • Adam says:

      “Speaking of franchises, we Amerikans should encourage these Israelis to open clinics in Walmart and Costco instead of throwing our wealth down the Obamacare rathole.”

      Yeah, because corporate monopolies are sooo much better than government ones.

  3. JD says:

    I would say that that worry is way overblown. By having a health care market place that attracts people from around the world you are putting the best doctors and most cutting edge innovation in the world in Israel. The externalities from this are so powerful that even if there is a two-tiered system Israelis are much better off.

  4. Dewaine says:

    “Israel’s Health Minister Yael German is set to decide whether Israel’s hospitals should be forced to curtail a business that has become an increasing part of their profits.”

    I think that they are overlooking the fact that profits result in the expansion of the business, which means that Israelis will get better health care as a result.

    • Dewaine says:

      I guess I am going along with JD. The existence and profitability of the first tier makes the second tier better.

      • Kevin says:

        Unless too many resources are allocated to the first tier, which will lead to contractions in the second.

        • Dewaine says:

          That is assuming that there is a finite amount of resources. If resources are able to grow, then the second won’t suffer negative impacts.

          • Kevin says:

            It’s also matter of incentives. Why spend time working for the second tier when the first is demonstrably better?