State-owned Wolfson Hospital has received a "going concern" warning on its second-quarter financial statement.
The hospital's auditor indicated the institution was in danger of financial collapse due to its heavy debt burden. This is the first time a hospital in Israel has received such a warning.
Nevertheless, seeking to ally concerns, the Health Ministry said it would shore up financing to ensure that the hospital, which is located in Holon and serves a vast population in the greater Tel Aviv area, would continue to provide service.
Auditors use the "going concern" warning to relay the message that the company being audited may not be able to continue operating. Wolfson Hospital's warning on its June 30, 2007 financial report was included after the hospital accumulated an operating loss of NIS 26 million in the first half of 2007. For the year 2006 it ran an operating loss of NIS 63 million.
The hospital's regular loss on June 30, 2007 was NIS 38 million, and NIS 29 million in the end of 2006.
The hospital's current debt totals NIS 216 million (NIS 82 million to the Health Ministry), with current assets of only NIS 148 million. Of these assets, NIS 23 million are a debt owed by the hospital's health corporation to the hospital - a questionable debt considering that the corporation itself has been operating with a "going concern" warning since the end of 2006. The health corporation is a sort of hospital subsidiary, which collects donations.
Wolfson has been in financial straits for years now. Due to the hospital's financial difficulties, the Health Ministry has been trying for years to transfer control of it from the state to the Maccabi Health Maintenance Organization. However, negotiations with Maccabi have not born fruit thus far and also, the idea does not lack opponents. In October the Knesset's Labor, Social Affairs and Health Committee refused to countenance transferring Wolfson to Maccabi unless the healthcare provider actually paid for the hospital.
Over the years, serious accusations have been leveled at the hospital management and its outgoing director, Prof. Moshe Mashiah. Accusations have also been raised by the Health Ministry's accountancy division, responsible to the treasury, as well as the Health Ministry's comptroller, who has conducted a number of investigations into the hospital's operations.
Mashiah was replaced by a new director, Dr. Yitzhak Berlovitch, about six months ago.
"The hospital has been functioning according to the decision to transfer its operations to the Maccabi HMO. As a result, the scope of HMO Clalit, Maccabi's competitor, has been declining.
This situation is detrimental to the hospital's financial strength. The treasury and Health Ministry will be asked to deal with this, and are holding ongoing discussions with the aim of reaching the best decision that will provide quality medical services to area residents, and are currently allocating funding to ensure its smooth operation," said a Health Ministry spokesman.
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