This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 12/3/2019

Overview
Israel’s public healthcare system is well-advanced by international standards but falls behind other Western countries in the number of hospital beds, doctors and nurses and public spending ratio. Israel spends only 7.5% of its GDP on healthcare, providing universal coverage to the entire population via four independent health management organizations and a network of hospitals, community clinics and specialized doctors. Israeli healthcare facilities are modern and are open to adopt new, cost effective technologies and procedures. Many Israeli doctors receive training in the United States and maintain personal and professional relationships with U.S. colleagues at major medical centers. Israel’s healthcare policy makers have been focusing on promoting healthy nutrition and lifestyle, preventive medicine and screening. In 2018, the Ministry of Health (MoH) announced it will establish new procedures to shift from hospital care to homecare. The MoH also continues to improve the national patient medical record system, both for the benefit of the patient and for clinical research purposes. 

Israel is a global technology research and development center. Its strength in this sector stems from inter-disciplinary capabilities, which bring together medicine, clinical expertise, materials science, electronics, software expertise and engineering know-how. Israeli development centers of multinational companies have an annual turnover of billions of dollars.

The primary healthcare industry opportunity for U.S. companies is within the area of healthcare technology, including medical devices and pharmaceuticals. Israel’s healthcare technology market is estimated at $6.2 billion, of which devices account for $2.4 billion and pharma $3.8 billion. Imports make up over 65% of the device market and about 60% of the pharma market. Top medical device imports are surgical instruments and other medical electronics, lab reagents, diagnostic equipment and catheters. Top pharma imports include medicaments in measured doses for retail sale, antisera and blood fractions and immunology products. The United States is Israel’s largest single-country source of medical devices and pharmaceuticals, followed by China and Germany. Total imports of medical devices from the United States to Israel in 2018 accounted for $458 million. Total imports of pharmaceutical products from the United States to Israel in 2018 accounted for $373 million. U.S. multinationals have production lines in Europe; therefore, the U.S. market share is larger when considering imports of U.S. brands that are being produced in Europe or shipped to Israel via a European country.

Healthcare Technologies Market Size and Trade Data ($ billion)

Year

2015

2016

2017

2018


Change %
2015-2018

 

Total Local Production

10.8

12

12

11.2 (Est)

+1.8%

Total Exports

9

10.3

10

8.9

-1%

Total Imports

3.75

3.8

3.8

3.925

+4.5%

Imports from the U.S.

0.464

0.490

0.530

0.832

+44%

Total Market Size

5.3

5.5

5.8

6.2

14.5%


Healthcare Market Trends and Demographics  
Local and International Competition
Israel is a sophisticated and mature market. U.S. suppliers face intense competition and should therefore be ready to compete and support their local distributors through educational presentations, material and lobbying/advocacy. Major multinationals and large companies have established direct sales and marketing offices in Israel. Other exporters operate through local distributors. There are hundreds of medical distributors that are well-established throughout the country.

Digital Health
Israel’s starting point in the digital world is especially good. There is a well-developed infrastructure and high-tech industry that offers innovative tools and applications. The Ministry of Health and Digital Israel are leading a national program that aims to harness and leverage the opportunity inherent in the digital revolution and progress of information and communication technologies. The system connects caregivers and allows them to watch the diagnoses and treatments performed by other practitioners in different organizations. The program also includes the deployment of an ER queues management application that notifies the progress of a patient’s treatment in the ER and increases the control on ER loads.

Aging Population
The aging population creates multiple challenges for Israeli society. The need to cope with the steadily increasing number of elderly people with dementia is one of Israel’s healthcare system major challenges. The Ministry of Health developed a national strategic plan to address Alzheimer’s and other types of dementia and age-related chronic diseases. The plan offers a holistic perspective and emphasizes collaboration among all relevant agencies: government ministries, the health plans and other organizations. The Strategic Plan aspires to cope with key issues that make it difficult for the current service system to provide an appropriate response to the unique needs of elderly patients.

Increasing Private Health Spending
The proportion of private financing in national health spending in Israel, on top of the health tax, continues to rise. According to the Israel Central Bureau of Statistics, the proportion of private spending is 40%, making it one of the highest rates in the Organization for Economic Cooperation and Development (OECD), in which the aggregate rate of private health spending is only 28%. The trend is clear and consistent, resulting from an erosion of the public healthcare system's resources. Private spending is composed of payments for dentistry (most dentistry in Israel is not included in the state health basket), supplementary and commercial health insurance, private care, purchases of medications, deductible payments and purchases of medical equipment.

The rate of public spending has not changed since 1995. The government refrains from increasing the health system's financial resources, despite population growth and technological requirements. Among other things, every purchase of an MRI machine, or a machine used in cancer radiology treatments, requires a special license. The rationale for this policy on diagnostic imaging devices like an MRI may very well be understandable, since increasing the supply can increase the demand, including unnecessary diagnoses.

Hospitals, Procedures, and Healthcare Professionals

Number of hospitals:

354

Public

172

Private

182

Number of hospital beds

44,715

  • Available beds per capita

.003

  • of which in general hospitals

15,487

  • of which in specialized clinics and rehabilitation centers

29,228

Physicians

35,000

Dentists

6,545


Demographics

Population

9 million

Life expectancy men/women

80.3/84.1

Infant mortality rate

3.1 per 1,000 live births

Percent of population older than 65

11%


Registration Process
The MoH has an overarching regulatory and policy making role. U.S. companies interested in exporting medical devices or pharmaceuticals to Israel need to appoint a local distributor, agent or other legal representative to register their products. The device registration application should be accompanied by a 510(k), Pre-Market Approval (PMA) or an Investigational Device Exemption (IDE). Pharma registration is more complex and requires additional testing and clinical investigation on top of the product file and FDA certification. The average time it takes to obtain a market approval from the Ministry of Health is 150 days for medical devices and about 360 days for pharmaceuticals.

Technical Standards
The Standard Institute of Israel (SII) is the agency responsible for the development of most product standards, compliance testing, and certification of products and industry quality assurance system. Israel has stated its intention to follow international standards whenever possible. However, it has been reported that some standards still exist that tend to favor domestic producers over foreign manufacturers. Electronic medical devices must comply with Israel's electric standard of 220 V, 50 Hz and are subject to an electric safety test in Israel.

Reimbursement
Israel’s Reimbursement System is called “The Healthcare Basket.” It includes all the services, medications, supplies and medical equipment that the insured is entitled to receive according to the National Health Insurance Law. It was originally determined based on the health services that were provided by the Ministry of Health and the Clalit Health Fund as of January 1, 1994 and has been regularly updated by the Ministry of Health, based on recommendations by a public committee.
The following fields of service are included in the healthcare basket:

  • Diagnosis, consultation and medical treatment;

  • Medications according to a list, some of which are provided only for a particular indication;

  • Hospitalization in a general hospital;

  • Rehabilitation, including hospitalization;

  • Accessories and medical supplies; and

  • Medical services in the work place 

There are several health services that, as of now, have not been transferred to the health funds and remain the responsibility of the state:

  • Well-baby clinics and inoculations

  • Certain general rehabilitation devices, walking and other mobility devices, for which the Ministry of Health participates in the cost

  • Health services for schoolchildren

  • Nursing home stay

Leading Sub-Sectors
Israel has a growing elderly population and limited resources. As a result, the MoH announced shifting hospital care to homecare when possible. This shift will continue increasing the demand for cost-saving products and for products that help patients monitor their health at home. Wound care, advanced diagnostics and minimal invasive procedures continue to be a high priority in the public healthcare market. In addition, a well-developed private sector health care in the areas of dental, eye laser surgery and plastic/aesthetic surgery keep up the demand for advanced medical instruments and appliances. Israel has an excellent digital health tech base and is a world leader in mobile and E health implementations. Opportunities exist however, in further advancing drug monitoring and disease surveillance. Other best sales prospects include minimally invasive surgical instruments and technologies that are integrated with imaging capabilities, cardiology equipment, equipment and supplies for plastic surgery, smart implants, dental instruments, equipment and technologies for pain management, physiotherapy, ozone & oxygen therapy, OR equipment & cost-saving, single-use products, point of care diagnostic kits and wound management technologies.

Opportunities
The U.S. Commercial Service at the U.S. Embassy, Tel Aviv Branch Office, in Israel helps American exporters enter the Israeli market through partner search and trade promotion programs. For additional information, please contact Commercial Specialist Yael Torres at: Yael.Torres@trade.gov.   

Web Resources

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