BGU | MY PATH, Haim Doron, MD

The Parallel Tax was abolished through the 1997 Arrangements Law. The significance of this was, first of all, conversion of the health insurance law from a law that realizes social security principles, to a law that only half realized social security, and half nationalized healthcare. It was nationalization because the health tax became part of income tax, only under the heading “health tax.” I have already mentioned that in western countries where the system is organized through national health insurance involving sick funds, the funding comes in part from the employer, and in part from the insured. With the 1997 Arrangements Law, Israel was the first country to abolish the part of the employer. At the time this was discussed, there was talk that abolition of the Parallel Tax would lower labor costs. In fact, it has been proven by Prof. Gabi Bin Nun that labor costs weren’t lowered by even a cent. 140 What the Ministry of Finance wanted, and succeeded in achieving by abolishing the Parallel Tax, was linking the health insurance law’s resources to the state budget, with its cuts and various priorities. The outcome of abolishment of the Parallel Tax was that the part of the health budget that the state budget earmarks for the health system doesn’t increase almost at all, while the scope of participation of the citizenry to underwrite health expenditures out-of-pocket continues to grow. Under the Parallel Tax Law, gradually, the employer came to pay 4.95 percent of wages towards health insurance. According to Prof. Bin Nun’s research, by the year 2000, the Parallel Tax would have contributed 40 percent of the outlays of the sick funds. In 2000 there would have been no need to top off funding for operation of the health system from the government budget, because revenue from the Parallel Tax (the employers’ payment) and from health insurance dues (the employees’ payment) would have been sufficient. It would be fitting here to discuss one of the lesser-known aspects of employers participating in health expenditures. The great importance of the employer participating in health outlays, even if it is only one percent, stems from the fact that a person spends at least a third of the day in the workplace. The workplace is a good place to educate about good health habits; and there are workplaces where this is done. I believe it is important to encourage an employer’s interest in the health of their workers. This is reflected not only in things like asbestos exposure in the workplace, but also many other aspects of industrial health and work safety. When we began to develop dental healthcare insurance in Clalit, I invited the chair of the secretariat of the workers’ committee at Israel Military Industries to meet, and we jointly established a dentistry clinic on-site. The clinic, due to its convenience, was associated with improved frequency of employees’ dental visits. At the same time, sick leave absences from work due to dental problems were reduced. At the time the Parallel Tax Law was being considered, Prof. Yuval and I advocated for it to include an 0.01 percent budget for industrial health research. This was incorporated into the law, and with the funding we were able to establish two research institutes: The first, an institute for employee health and rehabilitation at Loewenstein Hospital; the second, a more general research institute at Tel Aviv University’s medical school that deals with work injuries, occupational diseases, and work safety issues. After abolition of the Parallel Tax, the two institutes for research of occupational health were closed, dealing a blow to workers’ health and safety. There isn’t a day that one doesn’t hear on the radio or read in the papers about a worker falling in the workplace. In the absence of the institutes, it is now hard to know the state of work safety in Israel. 140 Gabi Bin Nun, “M-Hok Bituach Bri’ut Mamlachti ve’ad- Edan ha-Zahav veha-Platinum” (From National Health Insurance to the Age of Gold and Platinum) in Haim Doron (ed.) Ma’arechet Ha-Bri’ut L’ann? (Whither the Health System) Ben-Gurion University Press, 2009. pp. 7-48. Gabi Bin Nun, the author of this chapter and the study referred to above by Prof. Doron, is an economics graduate from the Hebrew University and health systems management graduate from Brandeis University. He is among the architects of Israel’s national health insurance law and one of the founders of the National Institute for Health Policy. Up until 2008, he served as deputy director-general for economics and health insurance at the Ministry of Health. Today, he is a lecturer in the department of health system management at Ben-Gurion University. He also is a co-editor of this book.

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