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Who switches sickness funds in Israel?



A competitive national health insurance system was introduced in Israel in 1995. Comsumer mobility has been traditionally a signal of market (managed) competition. However, since 1998, sickness funds’ switching rate has been stable at around 1% of the population. The low switching rate is explained by limited real options and similarity in the sickness funds functioning, and reluctance to change providers. The paper aims to characterize the 1% of the population who switches sickness fund in relation to the stayers, and to examine the implications for public policy. The National Insurance Institute Health Registry was used to conduct two analyses: (i) bivariate comparisons on selected socio-demographic characteristics of the switchers to those of the stayers in the years 1999–2000, and (ii) a multivariate logistic analysis of the propensity to switch for the entire adult (21+) population in the years 2005–2006. The main result is that switching is an inferior good. Both the bivariate and the multivariate analysis show that persons with lower labor-income, receiving income support or unemployment benefits are more likely to switch. Switchers have more children up to age 18. Arabs and Orthodox Jews are more likely to switch sickness funds. The 1% of switchers does not form a random draw from the age–sex-adjusted population. The over-representation of poor persons among switchers is unique to the Israeli scene, which might have resulted from demand-side initiatives, but also from implicit risk-selection strategies exercised by the sickness funds under the Israeli incomplete age-based risk-adjustment system.


Corresponding author

*Corresponding author: Amir Shmueli, Department of Health Management, The Hebrew University, School of Public Health, POB 12272 Jerusalem 91120, Israel. Tel: (972) 02 675 8514; Email:ashmueli@


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An earlier version of this paper was prepared for the Risk-Adjustment Network (RAN) project on comsumer mobility among sickness funds in competitive national health insurance systems. We thank the RAN members for their comments and discussion, without making them responsible for any shortcomings. Two referees provided very useful comments on an earlier draft, and Miri Engblad-Sabag assisted with the logistic analysis.



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Achdut, L.Shmueli, A., and Sabag-Endbeld, M. (2006), ‘Financing health care during the first decade of the national health insurance law’, in Bin Nun, G. and Ofer, G. (eds), The First Decade for the National Health Insurance Law in Israel, Tel Hashomer: The National Institute for Health Policy.
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Shmueli, A.Chernichovsky, D., and Zmora, I. (2003), ‘Risk adjustment and risk sharing: the Israeli experience’, Health Policy, 65: 3749.
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Health Economics, Policy and Law
  • ISSN: 1744-1331
  • EISSN: 1744-134X
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