Many Israeli citizens hold commercial health insurance, spending significant amounts of money out of pocket for it. A household with a commercial health insurance policy spends an average of about ₪400 per month on commercial health insurance, with a considerable portion of the expense directed towards commercial surgery policies, either “from the first shekel” or “supplementary to Kupat Holim’s (health fund) supplementary insurance.”

The report is intended to assist the public, policymakers, and relevant parties in gaining a clear and comprehensive picture of the issue. It examines the added value offered by commercial surgery insurance, including in relation to the supplementary insurance plans offered by the health funds – specifically concerning the choice of a surgeon from the approved list.

The report offers an in-depth look: Surgery Insurance in Israel – Comparison of Surgeon Lists in Kupat Holim Supplementary Insurance and Commercial Insurance >

The report’s data indicates that no significant added value was found for “from the first shekel” type policies compared to supplementary Kupat Holim insurance policies regarding surgeon lists, as they provide identical access to the same list of surgeons. In light of this, the Ministry of Health recommends examining the most cost-effective insurance based on the client’s risk aversion.

against the backdrop of the reform to reduce insurance duplication in health insurance (the “First Shekel” reform), the report presents, among other things, data regarding the gaps between surgeon lists in Kupat Holim supplementary insurance and those in commercial insurance – in order to reflect the actual added value of commercial insurance relative to Kupat Holim supplementary insurance.

• The comparison between surgeons in commercial insurance and those in Kupat Holim supplementary insurance concerns three main aspects: actual surgeries performed, professional profile, and the geographical distribution of clinics where surgeons operate.
• While individual “first shekel” policies are tens to hundreds of percent more expensive than Kupat Holim supplementary insurance, they provide lower reimbursement rates and relatively lower actual surgery performance rates compared to Kupat Holim supplementary insurance.
• The report also reveals an overlap of up to 84% between surgeons included in commercial insurance lists and those who also operate within the framework of Kupat Holim supplementary insurance – meaning relatively limited added value from commercial insurance in choosing a surgeon; there is a high probability that the insured will encounter the same surgeon in both frameworks.
• The number of surgeons who performed surgeries through Kupat Holim supplementary insurance is slightly higher than in commercial frameworks – with Clalit policyholders leading in utilization rates, followed by Meuhedet.
• The proportion of surgeons in commercial insurance who hold management positions in hospitals is similar to that in Kupat Holim supplementary insurance.
• The report indicates that the advantage in the number of surgeons in commercial insurance exists in only a few fields, primarily ophthalmology, gastroenterology, and plastic surgery.
• Kupat Holim supplementary insurance also has an advantage in the geographical aspect – it provides broader access to pre-operative consultations in the south and north, with a higher rate of clinics in the periphery.

In recent decades, there has been a sharp upward trend in the penetration rate of commercial health insurance in Israel. This trend significantly impacts the public and private healthcare systems and is also reflected in the rise in household health expenditures – both in real terms and as a percentage of consumption, partly due to the significant increase in premiums for commercial health insurance and the deepening phenomenon of health insurance duplication.

The 2022 Ash Committee report indicated that commercial surgery insurance policies, particularly “first shekel” type policies, create expensive duplicate coverage for policyholders who also hold Kupat Holim supplementary insurance, leading to excess expenditure without real medical value.

In order to reduce the phenomenon of insurance duplication, the “From the First Shekel” reform was implemented in June 2024. Under this reform, policyholders who held these commercial policies were transferred to the “Kupat Holim Supplementary” track, with the option to return to a “first shekel” policy. Although nearly 600,000 policyholders were shifted, a roughly 40% increase in premiums for “first shekel” policies and incentives for insurance agents, who are often compensated as a percentage of the premium, led to a return flow of policyholders, so that “first shekel” type policies continue to hold the main share in the surgery segment. Thus, the phenomenon of insurance duplication remains widespread.

The Ministry of Health, through its Senior Department of Economic Regulation, aims to provide the public with relevant information about the private healthcare system, both in terms of funding and provision, in order to enable policyholders to make informed decisions. The report is intended to assist the public, policymakers, and relevant parties in gaining a clearer and more comprehensive picture of the surgeon lists in the health funds’ supplementary insurance programs and in commercial insurance policies.

The analysis presented in the report focuses on three main aspects: the actual surgical activity volume of the surgeons, their professional profile characteristics, and the geographical distribution of the clinics where they operate.

The report’s findings indicate that commercial surgery insurance, particularly “from the first shekel” type policies, generally provides limited value to policyholders compared to the coverage provided by Kupat Holim supplementary insurance regarding the actual supply of surgeons. This is despite the high cost of individual policies, especially the “first shekel” type. The added value is also relatively low in terms of the doctors’ professional profile, as sought-after surgeons likely tend to be included in the Kupat Holim supplementary insurance framework from the outset.
In many cases, policyholders holding both coverages are expected to encounter the same surgeons in both frameworks, especially when it comes to senior surgeons with management backgrounds. The report’s findings show that the quantitative advantage presented by commercial policies in surgeon lists sometimes reflects a theoretical supply, whereas in practice, more surgeons performed surgeries within the Kupat Holim supplementary insurance framework. This is due to the fact that the utilization rate of surgeries within commercial insurance is relatively low compared to its counterpart in Kupat Holim supplementary insurance. Geographically, Kupat Holim supplementary insurance offers broader and more accessible distribution in the periphery, while commercial insurance is more concentrated in the Tel Aviv area.

The totality of the findings reinforces the conclusion that Kupat Holim supplementary insurance constitutes a central, efficient, and accessible mechanism for financing private surgeries in Israel, both in terms of the number of surgeons who performed surgery under its arrangement and the volume of surgeries performed within it. In terms of surgeon selection, Kupat Holim supplementary insurance offers broad and significant lists, also with regard to the surgeons’ professional profile, specialization fields, and geographical distribution.

Therefore, policyholders who wish to hold private coverage in any case should be aware that no significant added value was found for “from the first shekel” type policies compared to supplementary Kupat Holim insurance policies, especially given that both policies offer access to the same list of surgeons. The report’s findings reinforce the need to carefully consider the necessity of these policies and the suitability of the insurance portfolio to the citizen’s risk aversion. This is because reducing the phenomenon of insurance duplication is expected to reduce household expenditures on health without compromising access to quality medical services, thereby offering good news to the insured public and alleviating the cost of living.

Chaim Hofart, Head of the Economics, Regulation, and Innovation Division at the Ministry of Health: “As part of our commitment to provide the public with relevant information about the private healthcare system, in order to enable policyholders to make informed decisions, we are publishing this report, which includes lists of surgeons in the health funds’ supplementary insurance programs and in commercial insurance policies, thereby providing the public with an important tool for financial management in this area.”

Assaf Avda, Senior Director of Economic Regulation in the Division: “The reform that came into effect in mid-2024 differentiated between insurance coverages and its purpose was to reduce the double expenditure of Israeli households on health insurance. The report we are publishing today provides the public with essential information to realize and understand the healthcare services they are funding. I am confident that this tool will be of assistance to all policyholders.”