Audrey Shimron, executive director of the Israeli office of the Hadassah women’s organization says she was unaware of the golden parachute given to hospital director general Shlomo Mor-Yosef at the time, nor was the organization even able to get a handle on the extent of the hospital’s deficit until its accounting firm was replaced. But Shimron is adamant that ownership of the flagship hospital be kept in the hands of her organization and blames the Israeli government and some of the hospital’s board members for its financial woes.
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Hadassah University Hospital is struggling with a deficit of 1.25 billion shekels ($360 million), striking staff who have not received their full salaries and is under a court-ordered trusteeship. Last week the world renowned institution with two medical centers in Jerusalem won court protection from creditors.
In a wide-ranging interview with TheMarker, Shimron said members of Hadassah, the Women’s Zionist Organization of America were united around the mission of restoring the world-renowned hospital to a firm footing, but resented the all-too-prevalent attitude that her organization is “a cow to be milked.”
“For a considerable number of years, the organization has demanded that the hospital administration present a recovery plan, and when no decision was taken [by the hospital] in that regard, [Hadassah women’s organization] decided to make changes. When even following the changes, there was no satisfactory recovery plan, an outside firm was brought in. The Hadassah women are very professional and united, so it’s astounding what has been said, as if they weren’t okay [in their conduct],” said Shimron, referring to charges that the women’s organization was to blame for the hospital’s sorry financial state. “In addition, the government needs to inject funds because it didn’t do what it should have, and it’s responsible for a significant portion of the deficit due to its policies,” insists Shimron.
Government is to blame
“There is a deficit at Hadassah [hospital], but just a tiny portion of it is the result of management problems, and most of it is due to unfair treatment by the government.” Referring to a ceiling on the provision of services provided by the hospital, beyond which the hospital gets much less in the way of government compensation, Shimron cited the failure to raise the cap, as well as fee discounts that the government imposed, as the major cause of the hospital’s plight. “There are things that the hospital has to do, but the government also needs to lend a hand,” she said.
Shimron dismissed out of hand suggestions that ownership of the hospital be transferred from the women’s organization to the Israeli government. The leadership of the organization, which she said was working hard to implement a recovery plan, felt insulted over the suggestion. The organization did not seek government help until after committing itself to a recovery plan, she said. “Relating to the Hadassah women as if they don’t understand is very easy, but people don’t grasp that the Hadassah women are professional women -- accountants, lawyers, social workers, doctors, businesswomen, women who are soberly realistic and ready to give, to contribute to the State of Israel, but they expect cooperation.”
There is a sense, Shimon said, that the Hadassah women’s organization is seen as “a cow that can be milked,” and there is a lack of understanding that the organization sees itself as Israel’s partner rather than a charitable group. “We invest money here to build infrastructure, and women give money not for themselves but out of love for the country and so that Israel will have the best medical care.”
'Didn't know about retirement package'
The organization fought to replace Shlomo Mor-Yosef, former director general of the hospital. If her organization was so dissatisfied with Mor-Yosef’s performance why was he given a severance package that included a 75,000 shekels a month until he reaches retirement age? “I wasn’t involved with this agreement,” she said, “and I didn’t know about it. The agreement was signed vis-à-vis the board of directors at the time. Clearly this doesn’t make us feel good at all.”
In fact, Shimron says the Hadassah women’s organization was unable to get full information about the hospital deficit until the hospital switched accounting firms, from Deloitte Brightman Almagor Zohar to KPMG Somekh Chaikin.
Shimron was also critical of members of the board of the hospital, which consists of Israelis and Americans.
Every few years, a group of the Israeli members resigns. In one instance, it was in defense of then-director general Mor-Yosef .
“When Hadassh women decided to establish a [hospital] board of directors, it was because they wanted some of the leading people in the economy to be there and bring an Israeli frame of mind. They got up and resigned, instead of bringing their experience and connections to remedy all of the things that I have now noted vis-à-vis the government. Their suggested solution was always that we bring in more money and they opposed replacing the management. The people who we brought [onto the board], who were former Finance Ministry directors general, instead of resigning, they should have said: ‘Let’s go together to the government and demand that things be fixed and that a license be issued for additional beds that Hadassah and the population of Jerusalem have coming to them.’”
“I am disappointed, and as a citizen of the State of Israel, I am uncomfortable when it comes to an American organization that contributes so much money and gets such a tough reaction -- and a government that is not attentive until the end, and doesn’t focus on the real problems," she said.
The two developments that hurt Hadassah’s ability to fund the hospital were the global economic crisis that began in 2008 and reduced the interest the organization was getting on its investments, and falling prey to Bernard Madoff, the American investment advisor who lost considerable sums of Hadassah’s money in a Ponzi scheme. “In any event, we warned the hospital and didn’t reduce [our allocations to the hospital] all at once. We told management: ‘We’ll deal with it and you need to cut expenses,’ but it didn’t happen,” she says.
Shimron argues that the women’s organization should not be paying the operational costs of the hospital.
“At one time, Hadassah women raised money through altruism and Zionism. In 2014, people still give for altruistic reasons, but they are focused on specific purposes — equipment, research, new construction. On this level, we are still successful in fundraising. The different story is money for day-to-day [operational costs], money that in my estimation a philanthropic organization doesn’t need to give for operational [costs].”
Even though her organization is the owner of the hospital? “Every organization needs to be balanced, to provide services and to receive money in return that covers its expenses. When we give money for operational costs, it’s only because the State of Israel is not giving what it should, so philanthropists’ dollars need to pay for the health care system’s deficit.”