ISRAELI HEALTH SPENDING DECLINES

According to Israel's official statistics office, the country is trailing Western and advanced Asian economies in terms of health spending. The latest surveys indicate that health spending declined from 8.5% to 8.3% of GDP in 2004. Pharmaceuticals account for roughly 14.5% of this total.

As is to be expected, the US share was the highest in the world, at 15% of GDP, while most Western European states spent between 10% and 12%. South Korea spent 5.6% of GDP on health in 2004, while Poland spent 6%. Adjusted for purchasing power, Israel's per capita spending was on a par with that in Greece and New Zealand, at some US$1,953 in 2003.

The breakdown of Israel's healthcare financing structures is significant. In 2003, taxes paid by households accounted for a quarter of health spending, with the government directly contributing 42% of this total. Israel's sick funds accounted for 40% of the cost of health services, although their spending has been falling in recent years. Meanwhile, it seems that the wider economic situation has impacted healthcare in Israel, with per capita expenditure falling by 1% in 2003 and 2004, after rising 1% annually between 1999 and 2002.