Hadassah Medical Center Denies Treasury’s Claim of Financial Woes

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Hadassah hospital in Jerusalem.Credit: Shiran Granot

Jerusalem’s Hadassah Medical Center on Monday denied the treasury’s assertion that it is still suffering serious financial difficulties three years after it neared collapse.

“Hadassah hospital’s situation is extremely serious. The hospital has cash-flow problems that are expected to worsen soon because revenues and expenses are not aligned and the hospital’s CEO has been making investments,” Michal Abadi-Boiangiu, the treasury’s account general, said in a letter.

“The government has to be prepared to address financially a further deterioration of Hadassah,” she told Finance Ministry Director General Shai Babad.

The medical center, however, denied that there were any problems at all. “The hospital has completed its best year since it signed a recovery agreement,” it said in a statement.

The exchange was prompted by the resignation of Raz Zontag, an accountant who had been appointed to monitor the recovery program in 2014. Zontag said his authority had been undermined by Prof. Zeev Rotstein, who was named the medical center’s CEO just over a year ago.

“I can no longer continue to accept the responsibilities given me as the hospital’s outside comptroller,” said Zontag, who is an accountant with the Israel office of the global accounting firm Ernst & Young.

Zontag was appointed as part of the government’s conditions in the 2014 bailout in which the state injected 1.3 billion shekels ($340 million) into the famed institution. Zontag and his team were asked to ensure that the aid conditions were met and received considerable authority over how Hadassah was managed.

He was entitled to attend board meetings, negotiate with suppliers and approve all hiring. He also received the right to see all relevant documents.

But with Rotstein’s arrival friction developed with Zontag and Abadi-Boiangiu, a continuation of the rocky relations he had with Abadi-Boiangiu when he headed Sheba Medical Center.

In her letter, Abadi-Boiangiu accused Rotstein of “mounting a campaign against the gatekeeper that has come in the form of personal attacks, name-calling, derogatory expressions and offensive remarks on a personal level.”

She called all this “an attempt to put pressure on the outside comptroller and government officials to force concessions in favor of the hospital in order to prepare for a failure to meet the terms of the restructuring agreement.”

Abadi-Boiangiu accused Hadassah of failing to meet the terms of the restructuring agreement and of spending on development and equipment purchases without Zontag’s approval. She said the hospital was using cash in a way that endangered its long-term financial stability and of failing to reduce spending as promised.

Rotstein countered that “Zontag will be remembered in the annals of Hadassah as doing everything he could to cause it damage and bring about its collapse.” He said bed occupancy was at 120% and operating rooms were being used at full capacity.

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