I. User-Owned Comprehensive Health Insurance & Services by Coop Subsidiaries

 -------------------------------------------------------------
   This document has been made available in electronic format
      by the International Co-operative Alliance ICA
 -------------------------------------------------------------

                   Advance Unedited Version

----------------------------------------------------------------
  REVIEW OF NATIONAL EXPERIENCE IN PROMOTING AND SUPPORTING
   THE CONTRIBUTION OF CO-OPERATIVES TO SOCIAL DEVELOPMENT:
 
  CO-OPERATIVE ENTERPRISE IN THE HEALTH AND SOCIAL CARE SECTORS
      A GLOBAL REVIEW AND PROPOSALS FOR POLICY COORDINATION
----------------------------------------------------------------

CHAPTER II.

I.   USER-OWNED COMPREHENSIVE SYSTEM OF HEALTH AND SOCIAL CARE
     INSURANCE AND SERVICE DELIVERY OPERATED AS SPECIALIST
     SUBSIDIARIES OF CO-OPERATIVE ORGANIZATIONS [TYPE 1.1.1.5]

In Israel probably the most comprehensive co-operative health
system to have existed in any country originated in 1926 and
expanded until by the early 1950s, and thereafter until 1995,
when it was fully nationalized, it provided comprehensive health
insurance and service coverage to more than 70 per cent of the
population. This was provided as a benefit of membership in the
national trade union organization, Histadrut, which operates as
both trade union and co-operative apex organization, and which
includes 85 per cent of wage earners and all members of
cooperatives.

All members of Histadrut are simultaneously members of and
shareholders in a parallel system of co-operative business
enterprises, of which the apex and holding organization is Hevrat
Ha'Ovdim (General Co-operative of Labour in Israel Ltd.). This
has a considerable number of subsidiary organizations engaged in
many sectors of the economy. A significant proportion of the
remainder of the economically active population are members of
independent co-operative organizations which are affiliated with
Hevrat Ha'Ovdim, and are also members of Histadrut.

One of the specialist subsidiary organization of the Histadrut,
Kupat Holim, was one of a number of mutual aid service
organizations of Histadrut. It was responsible for provision of
health insurance and services to all members of Histadrut (who
were simultaneously, through Hevrat Ha'Ovdim, its members and
owners). Founded on the mutual aid principle, each member paid
progressive fees based on salary and size of family but without
regard for the scope of medical needs, in return for which they
and their wives/husbands and children up to 18 years of age were
eligible for all required health services, including primary
care, hospitalization, etc.

At its peak, this co-operative health system employed about
30,000 persons, including over 8,000 doctors. It owned and
operated more than 1,300 family clinics, which also provided
paediatric care; more than 800 specialized clinics; and 14 major
hospitals, including two geriatric hospitals and one psychiatric
hospital.  All members of Histadrut were also eligible for
membership of one of seven pension funds. These owned
convalescent homes and holiday resorts operated by Kupat Holim.

In 1995, after a period of intense debate, and with opposition
by many of those associated with trade unions and co-operatives,
the health system in Israel was fully nationalized. Health care
is now government financed; its costs are covered through a
universal health tax. There is no linkage between the payment of
this tax and membership in the Histadrut. Kupat Holim and its
institutions continue to serve as a major supplier of health care
but it is now no longer a co-operative framework. The Histadrut
continues to hold some share in the ownership of Kupat Holim but
this is not seen as a long-term situation. 80/