Regulated competition and health plan payment under the national health insurance law in Israel-the unfinished story

Shuli Brammli-Greenberg, Jacob Glazer, Amir Shmueli

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


In 1995, a competitive national health insurance system was launched in Israel. Four health plans compete on quality of care and service experience with a uniform package of benefits. As in other reformed systems, Israel adopted prospective age-based risk adjustment to pay the health plans. However, while other systems moved on to adopt sophisticated prospective and retrospective mechanisms based on socioeconomic and health-based risk adjusters; the Israeli risk-adjustment scheme is still based on age, gender, and place of residence, supplemented by specific payments for five severe health conditions. Furthermore, while in most systems the risk-adjustment weights are derived from actual expenditures of the health plans, the Israeli methodology consists of a patchwork combination of several national surveys and datasets. Consequently, the payment system provides incentives for (implicit) selection and distorts the envisioned competition. This chapter critically reviews the Israeli system, discusses its weaknesses, and proposes ways to improve it.

Original languageEnglish
Title of host publicationRisk Adjustment, Risk Sharing and Premium Regulation in Health Insurance Markets
Subtitle of host publicationTheory and Practice
Number of pages31
ISBN (Electronic)9780128113257
ISBN (Print)9780128113264
StatePublished - 1 Jan 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier Inc. All rights reserved.


  • Health plan payment
  • Israel
  • National health insurance law
  • Regulated competition
  • Risk adjustment

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)
  • General Business, Management and Accounting


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