Researchers: Jonathan Mann¹, Mordechai Findler¹

Background: Israel's health services are provided to the public by the National Health Insurance law, in which Dental care is not included. In Israel, dental profession is considered to be economically stable and profitable. So it is surprising to see that the number of public dental clinics went bankrupt, due to low profit. This difference in net profit is unexplained, a paradox that can endanger financial strength of dental clinics in the public sector. Working hypotheses: Managerial decisions accepted by the management of dental service providers under continuous losses are derived by risk seeking behavior as the result of "Loss Aversion".

Objectives: To examine the activities of the various dental clinics in Israel and by comparing the profit and loss statements (P&L) of the all dental service providers: private and public while trying to explain the paradox abovementioned.

Method: Quantitative part: Comparison of accounting measures will be assessed by a regression equation. Hence, pointing out the correct explanatory variable.
Qualitative part: Interviews with stakeholders of dental service providers, using a "Top to Bottom" thematic analyses research process.

Findings: 1. Managers act as if they are not averted from money losses, continue to operate the chains and loose more money. We can argue that blindness to losses did not enable loss aversion.
2. Since the managers ignore loses, there is a mode of risk seeking activities that in turn cause the continuation of manager’s activity. That behavior resembles the behavior of a gambler.
3. The manager’s decision-making are derived by secondary gain of non-tangible assets such as: ego, the need to preserve their good reputation and the eagerness of being a manager of a health service company.

Recommendations: Controlling dental clinics that provides services under the National Health Law can limit public expenditure that may threaten the economic stability of these clinics.

Research end date: 04/2019