Key messages

  • Israel has better health outcomes with lower healthcare expenditure, compared to Denmark.

  • Israel has a different organization of its healthcare system, and a younger population, with a healthier lifestyle.

  • Israel’s younger and healthier population and lower alcohol consumption may play a large role in explaining its better health outcomes, and lower healthcare expenditure.

Background

This paper seeks to shed light on a subject of debate in the Danish healthcare community, about the balance of financial control between, primary care and the hospitals. The debate was triggered by the observed lower cost and better health outcomes seen in Israel, who has a different organisation in this area. Opinions vary widely between directly implementing features of the Israeli healthcare system due to the much lower cost and better outcome seen in Israel, and entirely dismissing the matter, attributing the observed Israeli advantages to differences between the two countries not related to the healthcare systems organisation. We aim to provide a more detailed picture of the two healthcare systems. Specifically, we addressed the points that debaters considered responsible, for the lower Israeli cost and better health outcome. These included differences in the number of community-based secondary care medical specialists, where it was suggested that better access to these specialists could improve community-based care. We use the term community-based secondary medical care here, in referring to community-based specialists other than General Practitioners (GPs). Another point of interest in the debate was the difference in health insurance coverage and co-payment, which may influence patient choices. Regarding healthcare expenditure, the Danish debate has focused on the absolute cost and the percentage of gross domestic product (GDP) spent on healthcare, disregarding the different age distribution, and without regard to purchasing power parity (PPP). While the Danish debate did include a discussion of the differences in the populations and the health risks and health outcomes, it was lacking in detail and included several misconceptions, and did not include healthcare quality indicators.

In Denmark, the remuneration of GPs is subject to national negotiations every few years, between the trade union of GPs and the national association of the five Danish Regions. Delegations with representatives from both these organisations do educational tours together, selecting countries with healthcare systems with potential to inspire; the tour of 2020 was to Israel. Both before, and after this tour, elected officials, scientists, and policy makers from both countries visited each other’s countries, and there was an intense debate among the Danish leaders and healthcare professionals, on what to learn from the apparently cheaper and better Israeli healthcare system [1,2,3,4]. This debate prompted us to provide a more in-depth description, and thereby offer the possibility of a better-qualified interpretation of the differences in the overall healthcare costs and results.

Both Denmark and Israel are known to have effective tax-funded well- integrated nationwide healthcare systems, covering the whole population, with strong primary healthcare sectors and universal digital medical records [5,6,7,8,9,10,11,12,13,14,15]. However, the two healthcare systems have important differences in performance and in their organization, with apparently better outcome at lower total expenditure seen in Israel [5, 16]. While both systems have drawn international attention, Israel is especially noted for its good health outcomes at modest expenditure [1, 2]. See “Appendix 1” for detailed information about the differences between the two healthcare systems.

Material and methods

Our reference for this study is the six areas that the World Health Organization (WHO) has defined as the building blocks of a healthcare system (service delivery; health workforce; information; medical products, vaccines and technologies; financing; and leadership and governance/stewardship) [17]. We have chosen to focus on service delivery, health workforce, financing, leadership and governance/stewardship. We also investigate the health risks and the health outcome of Denmark and Israel, considering demographic, administrative and cultural factors. We did not find other studies comparing just Denmark and Israel, but identified several studies, including both, as well as several other countries, with cross-country comparisons addressing relevant topics. None of these evaluated differences in inclusion and definition of long-term care. Only one study adjusted healthcare expenditure for the varying age distribution between countries [18]. In order to better identify relevant areas to explore and to appropriately direct specific searches, the Danish first author (DR) spent two weeks in Jerusalem, observing clinical encounters of Israeli healthcare workers, interviewing doctors, medical staff and healthcare managers. Additionally, telephone interviews were done with healthcare professionals and patients who had experience of the healthcare systems of both countries. The interviews were in-depth and semi-structured. Data was thematically analysed. Recruitment for this was through the Hebrew University of Jerusalem, social media groups for Danes in Israel, and Israelis in Denmark. In total, 51 interviews were conducted, and 19 healthcare professionals were accompanied in their daily work. One or more medical directors from clinics of each of the four Israeli Health Maintenance Organizations (HMOs) were interviewed, as were medical directors from Terem Urgent Care Medical Centers as well as the Medical Director of the ER at the Sha’are Tzedek Medical Center.

We examined the number of GPs and community-based secondary care medical specialists in the two countries by using OECD reports, as well as national reports. Using national guidelines and reports, we also explored the organisation of their cooperation. Similarly, we investigated the differences in health insurance coverage and co-payment using a combination of OECD numbers and national reports and guidelines.

We identified major differences in health risk factors between the two countries, such as diet, obesity, and alcohol consumption, but also factors which are known to surface in public debate with only minor differences, such as smoking and overweight. Furthermore, we explored administrative, demographic, and cultural differences.

Regarding expenditure we examined not just spending expressed as a percentage of GDP, but also expenditure in PPP adjusted US$, as we believe this better describes the purchasing power assigned. We also calculated these numbers both including and excluding long term care, as this is not standardized between countries. All these measures are presented as observed and for Israeli spending, age adjusted to Danish age structure. Regarding health outcomes we chose to focus on life expectancy, child mortality, cancer, and cardiovascular disease. The OECD database is our main source of information. It includes data and metadata for OECD member states and selected non-member states, who provide the primary data according to agreed data protocols. Data are assessed and validated by specific committees within the OECD. Regarding healthcare expenditure we use the numbers for 2016, which is the latest year on which Israel has yet calculated its long-term care expenditure. Even though OECD Health Statistics report expenditure data for calendar years 2017, 2018 and 2019, these numbers include provisional statistics, and for 2019 mainly estimates. We use 2016 data because they are less likely to be altered by later revisions. We made the calculations for 2017, 2018 and 2019 with the long-term care for Israel in 2016 carried forward and found that using later data hardly affected the ratios between the two countries’ healthcare expenditure. Our findings in the discussion should be considered in relation to the methods we applied; when healthcare expenditure is compared between countries, it is commonly expressed in two ways. One, is by means of total healthcare expenditure per capita, i.e., dividing the total cost of healthcare by the population number, and then converting to a common and purchasing-power corrected currency such as PPP US$. The other way is by presenting the total healthcare expenditure as a proportion of GDP. Market currencies are subject to fluctuations and do not necessarily adjust for general price differences between the countries. Therefore, health care expenditure per capita is usually measured in PPP as this adjusts for differences in general price levels between the countries.

When comparing healthcare expenditure between countries, we assume that healthcare is defined similarly in those countries. Eurostat, OECD and WHO have developed a common set of methods defining healthcare and measuring healthcare expenditure [19]. Even using these methods, known as A System of Health Accounts, caution must be exercised in individual comparisons, since definitions of long-term care as either healthcare or social care continue to vary between countries [20]. Therefore, we compared healthcare expenditure with and without long-term care for both countries.

Usually, healthcare expenditure is compared without standardising or adjusting for demographic factors such as age; this contrasts with the way in which mortality and morbidity is compared. If we compare healthcare expenditure between countries to illustrate financial burdens, we should not adjust for age distribution. If the purpose is to compare the efficiency of healthcare delivery, it is necessary to adjust for age distribution since we know that national healthcare expenditure increases by the proportion of elderly in the population [21].

Healthcare expenditure in different countries is compared by percentage of GDP or by PPP adjusted per capita expenditure. Percentage of GDP is used more often, because as a proportion, it does not need to be adjusted over time due to inflation, cost of living, etc. The number “percentage GDP” directly represents how big a share of the country’s GDP has been assigned to healthcare expenditure. However, PPP adjusted per capita expenditure, while requiring periodic adjustment, better reflects the actual investment made in healthcare, because it more directly represents the purchasing power assigned to the healthcare system. Since we focus on cost-effectiveness rather than prioritization, we therefore prefer comparison by PPP adjusted per capita expenditure rather than a percentage of GDP.

Data analysis

We compared healthcare expenditure both with and without the cost of Long-Term Care for both countries. In international account systems [19], the term “Long-Term Care” covers nursing and residential care homes, home nursing and social services, e.g. home aid. Many countries, including Israel, categorize most of these services as Social Services, thereby excluding most of them from the healthcare expenditure, whereas Denmark consider most of these services to be part of the healthcare expenditure [20].

We used estimates of the health care expenditure’s age growth factor to the proportion of elderly (65+) population, to age-adjust Israeli health care expenditure to the Danish proportion of elderly (18.8%); the Israeli proportion is 11.2%. With an age growth factor of 3.1% the age adjusting factor is 1.26 [18].

Results

Leadership, governance, service delivery and the health workforce

Denmark has more doctors per capita than Israel, but the headcount for specific sectors may not be directly comparable, as individual Israeli doctors frequently divide their worktime between hospital and community-based care, a practice rarely seen in Denmark, see Table 1. This applies particularly to community-based secondary care specialists, where the headcount for Israeli community-based specialists is three times that of Denmark. Since many of these specialists work only part- time in community-based secondary care, the Israeli specialist capacity is not actually three times that of Denmark. In both countries, patients in central areas have better access to health services, and healthcare positions can be filled with more ease. Travel distances for medical care are generally shorter in Israel, due to the country’s smaller size and contiguous landmass in contrast to the Danish bridge-linked archipelago, but overall both countries have excellent infrastructure with short travel times to healthcare providers [22].

Table 1 Overview of the structure of the four Israeli health maintenance organizations and the Danish regions [23, 24]
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In Denmark, all permanent residents are offered a designated General Practitioner (GP), who has obligations towards them regarding availability, follow-up for their medical conditions and responsibility for incoming correspondence and test results. For Israeli GPs it is similar, but with even stricter guidelines regarding the GP’s responsibilities for follow-up correspondences and test results, and with automated reminders related to quality indicators integrated into the digital filing system. Danish GPs perform primary paediatric, as well as obstetric and gynaecological care, while in Israel this is commonly managed by community-based specialists of these specialities. Israeli patients usually receive their primary care from GPs or for children, paediatricians. Referring to GPs we include Israeli paediatricians performing primary care. Israeli patients can obtain obstetric and gynaecological care, ENT (ear, nose, and throat), orthopaedics, and dermatological consultation without referral, but usually require referral for other specialities, depending on HMO.

The Danish GP are financially incentivized by procedural fees, which are also the Danish Regions main control mechanism. The Israeli GP’s work is monitored by quality indicators which their management have incentives to optimize. Danish GPs have no similar quality program. In both countries GPs have similar responsibilities for a list of patients, and have comparable workloads. While Israeli GPs are obliged to offer more evening consultations, Danish GPs have more urgent-care obligations. See “Appendix 2” for further information.

Both Danish and Israeli GPs offer remote consultation, by means of video, text messaging or telephone, where photos can be sent as a supplement. In both countries all laboratory and imaging results and discharge letters are directly available to the patient’s GP. Both countries have implemented national standards to enable digital communication in-between hospitals and with other health care providers. In Denmark all GPs and community-based secondary care medical specialists can choose any compatible digital filing system. In Israel the GPs use the digital system of their HMO, which is also compatible with the national standard. Some Israeli GPs allow patients to communicate with them through the GPs private cellphone including SMS, WhatsApp and Messenger; this is very uncommon in Denmark.

In Denmark GPs are reimbursed with a combination of an unweighted unconditional capitation fee, usually comprising 25% of the GP’s income, and by consultation and procedural fees, making up the balance. Danish secondary care community-based specialists only receive consultation and procedural fees, whereas the public hospitals` doctors are all salaried employees, regardless of specialist status. Conditions and remuneration are negotiated every few years, resulting in nationwide contractual agreements, with little room for individualization. Danish community-based secondary care specialists are usually forbidden to work in the hospitals. Secondary care specialists who are able to acquire a private fee license can see patients in a community setting remunerated by the public health insurance but must cease working within the organizational framework of the hospitals within two years. Though they can apply for being allowed to continue working part-time less than 10% have currently been granted this. Danish GPs rarely perform clinical hospital work. Part-time employment is uncommon for both hospital- and community-based doctors in Denmark.

In Israel each of the HMOs contract with individual doctors on reimbursement, resulting in a wide selection of options, ranging from salary, the most common, to a selection of procedural, consultation and capitation fees. The most common of these among GPs, is weighted capitation requiring at least one visit per quarter, with no additional pay for further visits. If the patient sees other GPs, the quarters capitation fee is divided. Both GPs and secondary care physicians may make agreements with one or more HMOs and other employers, on how much and where to work.

Israelis pay for more health services through supplementary private health insurance and through out-of-pocket co-payments. In Denmark most medical service is free at the point of delivery, and co-payments apply mostly for non-medical services. Danish private healthcare insurances cannot buy or expedite procedures in the public system but are intended for Denmark’s much smaller private healthcare sector. Israel has a large private healthcare sector, where the patients use of private healthcare insurances is integrated into the public system. See “Appendix 3” for further details about the above, Covid-19 handling and GP income and job satisfaction, and Table 2 for more about service delivery and the health workforce.

Table 2 Service delivery and health workforce
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Financing

Our health care expenditure reports are summarised in Table 3. Comparisons depend completely on our adjustments, i.e., with or without long-term care, and with or without age adjustment. This is due to the Israeli health care expenditure including only a small fraction of the long-term care expenditure included by Denmark, and because Israel has a younger population [5, 19, 20]. Furthermore, since the Danish GDP per capita is 37% larger than the Israeli GDP, the difference in health care expenditure as a proportion of GDP shrinks further. In fact, our health care expenditure comparisons range from 92% higher Danish expenditures to 9% lower expenditures compared to Israel, depending on the inclusion or exclusion of long-term care, whether the number is age adjusted, and whether it is expressed as PPP or as a percentage of GDP.

Table 3 Health care expenditure in Israel and Denmark, 2016: US$ PPP in 2016 and % GDP
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Demographics, health risks and health outcomes

Israeli and Danish lifestyles differ, including in areas with significant health impact. We chose key numbers pertaining to diet, showing large differences especially regarding alcohol, but also sugar and vegetable intake, see Table 4. The number of overweight and obese people were similar for the two countries, while obesity alone was more common in Denmark. Smoking prevalence was similar for both countries. Life expectancy may appear similar, but Israel ranks high—11th and 12th—in the OECD for life expectancy in 65-year-old women and men respectively, and Denmark ranks low, 35th and 30th out of 38 [33]. Figures for cancer incidence, cancer survival rates [34, 35] and cancer mortality, are significantly better for Israel, compared to Denmark, while figures for cardiovascular mortality are more similar, albeit still in Israel’s favour. Potential Years of Life Lost is significantly higher in Denmark. While infant mortality is lower in Israel, mortality for older children is somewhat higher.

Table 4 Health risks and outcomes
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Regarding the OECD database Health Care Quality Indicators, some indicators were clearly in favour of one country, others showed fluctuating results over time, sometimes without a clear trend [36]. Overall performance was similar; see “Appendix 5” for more information on healthcare indicators and patient satisfaction.

Israel is home to a more culturally and ethnically diverse population, with greater income variation, compared to Denmark. The GINI index is the accepted way of describing income variation. A method similarly scoring ethnic fractionalization and cultural diversity was also found [51] (Table 5); see “Appendix 4”. Denmark is a largely monocultural state, with 86% of the population being Danish, 9% being immigrants from non-western countries or their descendants (mostly North Africa, Middle East and Central Asia), and 5% being immigrants from western countries or their descendants [52]. Israeli demographics are complicated. While there can be controversy on how the population is classified, it is safe to say that around three quarters of the citizens are Jews, split between a small majority of Mizrahi Jews (those descending from refugees and immigrants from the Middle East) and with Ashkenazi Jews (those descending from refugees and immigrants from European countries) being the second largest group. There are also many smaller distinctive groups, such as Ethiopian, Yemenite and Georgian Jews. The vast majority of the Jewish Israeli population is born in Israel, and the cultural differences between the various groups wane, as families live there for generations, and start to intermarry. Today the most visible division is by religious affiliation. The ultra-orthodox Jewish community, which includes Jews of many ethnicities, is notable for its significant difference from mainstream Jewish society. The differences are cultural and economical, and in the general approach to health and to the healthcare system. The non-Jewish population is mostly Arab, and is also split along religious and ethnic lines, with a large cultural difference between the rural and urban population. The main groups are Arab Muslims that can be divided into urban, rural and Bedouin, Arab Christians, and Druze. There are also small groups of various other affiliations, such as Armenian Christians and Black Hebrew Israelites, as well as working residents from all around the world [53]. In both countries, citizens performing national service can choose to serve in the public healthcare system, instead of the armed forces, and both countries receive donations to the healthcare service. While both types of contribution are more common in Israel, the numbers are very small compared to the total healthcare budget. See Table 5 and “Appendix 6”.

Table 5 Population
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Discussion

Comparing healthcare expenditure depends on how and what is compared. Comparing observed expenditure per capita, Danish healthcare expenditure is 92% higher than Israeli expenditure. We see in particular that the sub-category Long-term care (Health) differs substantially, and it is known that reporting standards differ between OECD member countries. Some countries register most long-term (or social care) expenditure to the statistics of social services while other countries register the same expenditure as long-term care for the elderly and the handicapped, and hence as health expenditure. We believe this to be the case for Israel and Denmark respectively. Therefore, it makes sense to subtract those expenditures for both countries. Subsequently health care expenditures are only 57% higher in Denmark compared to Israel. Part of this difference may be due to different age distributions in the two countries; Denmark has more elderly residents. A crude age adjustment makes the difference shrink to 53% (for total health expenditure) and 25% for health care expenditure minus long-term care. Health expenditure in different countries is compared either per capita in purchasing power parity (PPPs) US$ or as a percentage of Gross Domestic Product. Since Denmark has a 37% higher GDP per capita compared to Israel, the differences and ratios between the two countries’ healthcare expenditures shrink further when using percentage of GDPs as measures rather than PPP per capita. Total expenditure on health ratio shrinks from 92 to 42%, health care expenditure ratio (i.e., subtracting long-term care) shrinks from 57 to 25%. And age adjustment shrinks the ratio further, to 11% and -9% respectively. So, the comparative span for the two countries’ expenditure on health ranges from 92% higher to 9% lower in Denmark compared to Israel, depending on how and what is compared.

As described in the method section, we believe that a comparison in PPP is better than percentage of GDP, when considering cost efficiency. Our best assessment is that the 9% higher expenditure in Denmark only expresses the difference in prioritization of healthcare, and that cost-effectiveness is best considered by using the number of 25% lower cost in Israel, calculated by using PPP, age adjusting, and subtracting long term care.

Israelis have much better access to community-based secondary medical care, compared to Danes. Danish GPs have a broader scope of treatments and are exclusively specialists. While these two factors may somewhat outweigh each other, with regards to which healthcare system is better, they are both commendable, and should serve to inspire healthcare leadership in both nations. The differences in management, working conditions and quality monitoring also include many points that could serve as mutual inspiration. In Israel the dynamic pace of change in regulatory mechanisms may be appealing to Danish healthcare organizers. In Denmark the almost universal self-employment and resultant obligation, liability, and continuity of the GPs, regarding their patients could be interesting to Israeli GPs and patients.

The Israeli patient has more choice of providers within the public system, particularly if co-payment and/or supplementary or private healthcare insurances are utilized. In Denmark almost all consultations by GPs are done by specialists in family medicine, except those done by younger doctors in training, but Denmark lacks a quality indicator program similar to that of Israel. Despite a shorter Israeli GP training program, only a little more than half of Israeli GPs are specialists, and of these less than a third are specialists in Family Medicine. The most marked difference, however, is that the four Israeli HMOs can compete for patients by delivering healthcare differently, while the Danish Regions are encouraged to similar healthcare delivery, and Danish patients usually treated in their home region.

Large economic disparity within a society can make it harder to provide equitable care to that society. The larger the cultural and ethnic differences are in a society, the harder it is to provide equitable care to that society. The larger Israeli economic disparity, together with the more widespread requirement for co-payment for medical services and supplementary health insurance in Israel, may be a challenge to equitable healthcare. This may worsen Israeli health outcomes if patients seek healthcare later, leading to more advanced disease at the time of treatment initiation, which may increase cost. However, it might also lead to reduced cost if the delay is so severe that treatment is too late. We do not believe that this latter scenario is common for either Denmark or Israel, as both have a low total cap on co-payment and neither has co-payment for hospital treatments [60]. The greater ethnic and cultural fractionalization in Israel can present challenges to the Israeli healthcare system, which must adapt to a greater number of different approaches to health, compared to Denmark. This may lead to decreased health or increased cost [61, 62]. Hence, we believe that the better Israeli health outcomes and lower cost, is despite a greater economic, cultural, and ethnic disparity.

The Danish system, based on geographical regions, is intended to allow a high nationally standardized level of care and organization, despite lower population density, dispersed in a bridge and ferry linked archipelago. Israeli population is more concentrated, and situated in a continuous landmass, so Israel does not need to geographically fragment its healthcare system to the same extent to provide a better level of managed care and organization. For both countries central areas can recruit sufficient healthcare staff with more ease, and thereby better offer the required level of care. In Israel this refers to the coastal plain between Haifa and Tel-Aviv together with the Jerusalem area, where most of the population reside. Danish population centres are more dispersed with greater travel distances in between them. The distribution of Danish healthcare facilities, and the provision of sufficient patient flow to make these facilities economically viable and able to maintain expertise, has resulted in stricter control of both the location of healthcare providers, as well as patient choices.

Danish accountability for both finance and delivery of health services is more political, with elected officials bearing responsibility in elections. While officials are bound by the financial frame set by the ministry of health, they do have some degrees of freedom. Regional election results follow national voting patterns, but may differ somewhat, depending on which regional politicians are running, and what their policies are. Within the different parties, good performance of individual regional healthcare politicians can further their career, thus being a strong motivator for providing good leadership in the health politics of the Regions. As well as personal differences between the candidates, there are differences in the political parties’ approach to healthcare policy. These include placement of healthcare providers and cooperation with private healthcare actors.

In Israel there is competition for patients among the HMOs, and patients can change HMO due to healthcare services being delivered differently. This leads to more rapid changes in the HMOs, often causing other HMOs to adopt similar changes in order to better attract patients. Thus, Israeli healthcare has some of the traits of a free market, including the self-improving mechanism resultant of the HMOs being pitted against each other, but may also entail the drawbacks of populism and resources used on advertising.

We asses that donations and national service in the healthcare system do not significantly impact the difference in healthcare expenditure and outcomes, between Denmark and Israel. While donations and national service in the healthcare system can be assumed to decrease national healthcare spending or better outcomes, the total amount for both countries is low, though with marked differences. Donations are much less common in Denmark, but account for 2% of the total healthcare budget in Israel. Even these small numbers can be misleading, as donations can incur long-term running expenses for acquisitions that might otherwise not have been made. Regarding national service, even the higher Israeli rate is very low compared to the total number of people employed in the healthcare system, and since almost all the draftees are untrained, the impact may be insignificant.

In Israel, Potential Years of Life Lost is lower, Longevity is higher, and Survival from Cancer is better. Is this partly due to the healthcare system? Maybe, since Israel has a different organization in its primary healthcare, but first the higher Danish alcohol consumption should be recalled. The better Israeli outcome and lower expenditure could be partly or mostly due to other factors, especially the Israeli citizens’ lower alcohol intake. Israel also has a lower sugar consumption, higher vegetable consumption and a generally healthier diet [5, 63], together with a more hilly terrain, a warmer climate and less precipitation, all factors that improve health outcomes and decrease healthcare expenditure, albeit on a smaller scale [64, 65].

Regarding the healthcare quality indicators, it is not clear which country is better. Registration of the data is influenced by differences in organisation and medical culture. For instance, a COPD or asthma patient with a severe exacerbation, will receive the same care at the hands of doctors of same level of training; in Denmark this will be in the framework of a hospital Emergency Room (ER), while in Israel this will often be in an urgent care community setting, and thus not be registered as a hospital admission.

Conclusion

Is the Israeli healthcare system better organised, and therefore cheaper than the Danish Health Care system? While healthcare expenditure is lower in Israel than in Denmark, the latter ranks better in other areas, such as less economic barriers to secondary and tertiary medical care. Furthermore, the gaps in expenditure are minor when adjusted for age and long-term care. While the organisational differences between the Israeli and Danish healthcare systems are interesting, the influence of cultural factors on healthcare expenditure and outcomes, particularly the more than three-fold higher Danish alcohol consumption, should not be underestimated. Our best assessment is that this may explain most of the 25% lower cost, that remains after adjusting for age and excluding long term care, as well as explain most the observed differences in health outcomes. A large alcohol consumption is known not only to increase the incidence and severity of most diseases, but also to diminish the therapeutic response and prolong treatment, all factors that may contribute to greater healthcare expenditure and poorer outcomes. While we believe that our paper should cause Danish policy makers to focus on decreasing Danish alcohol intake, further analysis should also investigate what the two countries could learn from each other’s organisational structure, as we find both to have many unique and interesting features.