Hadassah Hospital Gave Senior Staff Huge Wage Hikes in Midst of Financial Crisis

Treasury report shows some employees received double-digit raises in 2017, with increases of tens of percentage points, just as the struggling hospital was in the throes of restructuring, layoffs and cost-cutting

Hadassah Medical Center in Jerusalem, 2019
Emil Salman

In 2017, in the middle of a restructuring plan for the financially ailing Hadassah University Hospital, Ein Karem, in western Jerusalem, the salary of the medical complex's manager, Zeev Rotstein, shot up 32 percent – to 142,000 shekels (approximately $40,000) a month in gross terms. He had taken the job the year before with a gross salary of 107,000 shekels a month, according to a Finance Ministry report.

Sources at the ministry and hospital say Rotstein’s pay hike is based on the agreement the hospital signed with him, while Hadassah management says that his salary didn’t rise at all: The difference lies in the bonus he received that year.

Hadassah had been a private enterprise but after it sank into financial difficulties and needed state support, its books became a matter of public record. In 2014 the Knesset agreed to provide the hospital with 1.4 billion shekels by year-end 2020. After this, the medical center was included in the Finance Ministry’s public sector wages report for 2016 and then again in the recently published report for 2017 (wages reports are always published at a delay).

The 2017 wages report lists over 700 of the medical center’s 4,000-plus employees as earning 17,000 shekels a month or more. The 2016 and 2017 reports show that some employees received double-digit raises from one year to the next, with increases of tens of percentage points, just as the struggling hospital was in the throes of restructuring, layoffs and cost-cutting. During this time there were bitter fights between the workers and the management, and all the while the state was giving the medical organization hundreds of millions of shekels a year at the taxpayers’ expense.

The management’s steps during the seven-year restructuring plan were supervised by the Finance Ministry and an external committee. Yet doctors, department managers, nurses, technicians, administration staff and even the hospital rabbi received major raises.

Sources at the ministry and the hospital's management team say that some of the raises involved income from private medical services or overtime pay, and that some were based on previously signed employment agreements.

However, the ministry sources admit there were payment irregularities. Recent reports say that Rotstein and other top Hadassah officials were questioned at the Finance Ministry under caution, meaning as criminal suspects, for overpaying doctors recruited to the pediatric hematology-oncology unit in 2017.

At the top of the report on 2017 public sector wages was a Hadassah specialist earning 253,000 shekels a month. One doctor got a 30 percent raise, to 213,000 shekels a month, and another got a 6 percent raise to 216,000 shekels.

Hadassah says that it used to have doctors earning over 200,000 shekels a month, but that included pay for academic and private work. The hospital stated that nowadays, it has only one doctor who get this kind of pay, with the blessing of the Finance Ministry.

However, the wages report also revealed an X-ray technician whose pay rose 30 percent to 121,000 shekels a month, in gross terms. Even with overtime it’s hard to imagine how a hospital struggling to survive, two years into restructuring, can afford such an expensive technician. The hospital explained that this person is an “isolated irregularity” and that “most of his irregular pay derived from overtime, and the unique agreements he had in the past. The irregularities have been canceled.”

During 2017, the anesthetics department gained a new manager who was earning 96,000 shekels a month, 16 percent more than the outgoing one. That year the scanning department manager got a 16 percent raise, to 100,000 shekels a month. Again Hadassah pointed a finger at academic pay, private work and a retroactive one-time payment for a promotion that hadn’t been paid in 2016.

In 2017, when the pediatric hematology-oncology unit was in crisis over bone marrow transplants, among other things, the bone marrow transplant manager’s pay rose 76 percent, from 50,000 shekels to 85,000 shekels a month. The hospital explained that he is an example of someone receiving an academic promotion as an associate professor, and in 2017 he served as a department head on top of conducting private work and replacing senior doctors on duty.

The cardiology department chief received a 41 percent raise in 2017 to 85,000 shekels. The head of the nephrology department got a 24 percent raise to 70,000 shekels; the R&D department head, who does not engage in medicine, got a 12 percent raise to 67,000 shekels a month. The head of the dermatology department received a 255 percent raise to 57,000 shekels a month and the chief of the ultrasound department got a 30 percent raise to 62,000 shekels a month.

Hadassah blames these examples on wage creep, promotions on the academic scale and private medicine – or all three. But raises at Hadassah weren’t confined to medical practitioners. The head of the policy, administration and finance department got a 25 percent raise in 2017, which upped his pay to 95,000 shekels a month. Hadassah pointed to an old employment agreement from 1998, which will expire in two years.

The administration chief got a mere 2,000 shekel raise, to 57,000 shekels a month. The manager of public relations and employment, who probably had to advise a lot of employees that their pay was getting cut, received a 10 percent raise to 33,000 shekels a month. The wages and attendance manager got an 11.4 percent raise to 31,600 shekels a month, and the rabbi got a 10 percent raise to 34,000 shekels a month.

The restructuring agreement aimed to balance the medical center’s budget and stabilize it for the long run. The agreement laid down changes in its functioning and corporate governance, regulations for providing private medical care, and efficiency measures that included cutting positions – hundreds of jobs were eliminated. The agreement was executed under the supervision of an auditor and the health and finance ministers.

Labor disputes continue to wrack the hospital, which recently unilaterally withdrew from an agreement over teaching positions for doctors also employed at Hebrew University: The hospital says it can’t afford the cost, which is 40 million shekels a year. Firing nine doctors led to a two-day strike, but the court ruled that Hadassah had to honor the agreement signed with the practitioners.

Hadassah stated that in regards to the public's right to know, it conducts itself with transparency. It said that it works well with the supervisor, provides periodic accurate reports on salaries, and obtains the requisite permission for irregularities. It added that its efforts to freeze hiring and wage costs began to show results in 2018. “A lot remains to be done regarding the irregular salaries for some employees, and it is being done without violating collective bargaining agreements,” the hospital said.

Hadassah also stated that the irregular academic employment of doctors is a painful subject that hasn’t been finalized with the medical union, so the hospital has been suspending all academic appointments for a year and a half now. Arbitration is in process. Meanwhile, Hadassah increased its activity by “considerable percentages” without added manpower: It added more beds, operating theaters and more.

The hospital said that all in all, Hadassah is on the right road, including regarding its cost-production ratio and in the absence of “external bombshells” that it can’t prevent, and should be on a new path in a year and some. It added that the management is working on efficiency and economy, and said that most of the raises stemmed from collective agreements that it couldn’t break.

The Finance Ministry stated that its wages department supervises pay at Hadassah, and also said that many employee salaries derive from previous agreements or compensation for shift work and being on call. It said that any salary irregularities will be handled by its enforcement division, based on its multi-year working plan.