Israel Medical Association Journal

Background: It is not clear to what extent the drug economy in Israel's health maintenance organizations is responsive to major healthcare reforms.

Objective: To provide information on how drug expendi­tures, revenues, net costs and drug utilization have changed in the wake of the 1995 National Health Insurance Law in Israel.

Methods: This study compares trends in aggregate sick fund expenditures, revenues (patient co-payment) and net costs (expenditures less revenues) in Israel's four health maintenance organizations for the 3 year period 1992-1994 prior to the introduction in 1995 of the NHI Law, with that of the 4 year period 1995-1998 following its introduction. This analysis is similarly carried out for Israel’s largest HMO, Clalit Health Services, and for the three smaller HMOs combined.

Results: The pace of growth in the pre-NHI era in drug expenditures and particularly in drug revenues was drastically reduced in the NHI era - whether measured as totals or as per insured person (age-adjusted) or in real terms at constant medicine prices. These trends were mirrored to a large extent in

Conclusions: The impact of the NHI Law on the HMO drug economy has been substantial. The evidence suggests a decline in both the qualitative (basket of drugs consumed) and quantitative (volume of drugs consumed) elements of growth. These changes in expenditure and revenue trends are discussed in the light of the evolving involvement of the Israel Ministry of Health in drug policy within the framework of the NHI, with emphasis on the basket of drugs reimbursed and co­payments for prescriptions.

Background: On 1 January 1995 a new mandatory National Health Insurance Law was enacted in Israel, The new law fostered competition among the four major Israeli healthcare providers (HMO5 or sick funds) already operating in the market due to the possibility that an unlimited number of patients and the relative budget share would shift among the HMOs. This led them to launch advertising campaigns to attract new members.

Objectives: To examine newspaper advertising activities during the early stages of healthcare market reform in Israel.

Methods: Advertising efforts were reviewed during a study period of 24 months (July 1994 to June 1996). Advertisements were analyzed in terms of marketing strategy, costs and quality of information.

Results: During the study period 412 newspaper adver­tisements were collected. The total advertising costs by all HMOs was approximately US$4 million in 1996 prices. Differences were found in marketing strategy, relative adver­tising costs, contents and priorities among the HMOs.

Conclusions: The content of HMO5 newspaper advertis­ing was consistent with their marketing strategy. The mes­sages met the criteria of persuasive advertising in that they cultivated interest in the HMOs but did not provide meaningful information about them. Future developments in this area should include consensus guidelines for advertising activities of HMOs in Israel, instruction concerning the content of messages, and standardization of criteria to report on HMO performance.