family costing $1,000 a month, and which provides roughly half these services. Under the Israeli system, the law set up a system of public funding for the health services through a progressive health tax, administered by BITUAH LEUM, which is the Israeli equivalent of Social Security Administration. It transfers funding to the HMOs according to a formula based on the number of members of each fund, the age distribution of the membership and several other indicators. The government also provides additional funding to cover the disabled, the aged and the poor.

The law also allowed the four HMOs to avail supplementary insurance to their members, insurance that includes services and treatments that are not included in the basic publicly-funded package, as well as long term insurance. This provides a good source of additional revenues for the HMOs.

The largest of the four HMO's is the Clalit (Kupat Holim Clalit) with more then 50% of the total population enrolled and the other three HMO's—Maccabi, Meuheded and Leumit—splitting the rest of the country's membership. The entire system is based on a regulated competition among the four HMO's, with their profits rising as the membership levels do.

The Israeli health system was established to provide preventive medical care, and maintain the health needs of its citizens and decrease as much as possible the need of hospitalization, which is a key to keep cost manageable.

In the Israeli health system every permanent resident is part of the member pool in the four HMO's. Every member pays monthly dues directly to the Bituah Leumi. For employed tax-payers, the cost is 4.9-5% of their monthly gross income, which is automatically deducted for medical insurance coverage. This is similar to the American system, where Social Security and Medicare costs are automatically deducted from workers' paychecks. Self-employed Israelis are responsible for paying the Bituah Leumi directly for their health insurance.

Prof. Arthur Leibovitz, geriatric advisor of Medical Wing at Kupat Holim Meuheded hospital and an expert on the geriatric services in Europe and the US, considers the Israeli system is superior to other developed nations.

"Beside the high quality and availability of medical care services, there is a very strong support system that is available to the elderly" he said.

One can argue that Israel has only seven million residents, compared to the United State's roughly 300 million citizens, but parts of their model could be applied on a larger scale. By using a similar system, the United States would have a chance to unify record keeping, putting controls on pricing and cost, reduce cost to the insured and the government, while still leaving a reasonable margin of profit to the insurance companies.

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