Hadassah Hospitals Need Fast Cure as Stay of Legal Proceedings Wanes

Workers at two Jerusalem facilities are quitting, operations are being canceled, the deficit is growing, and the Hadassah women's organization is slamming the state.

Olivier Fitoussi

Nurses are leaving, medical services are being cancelled, money is dwindling, and negotiations between Hadassah Medical Center's management and doctors and other workers are far from any breakthrough. Hadassah is at a critical juncture and if nothing changes soon, its trustees have warned the Jerusalem District Court – its two Jerusalem hospitals could be liquidated.

In updating the court at the end of last week, attorneys Lipa Meir and Asher Axelrod said the present 90-day stay of proceedings against the hospitals is reaching the end, and the Passover vacation is fast approaching. “This situation, if it does not change soon," they cautioned, "will force the management and the trustees to make decisions and take far-reaching steps ... in the absence of an agreed-upon recovery plan.”

Liquidation could lead to a number of possible outcomes, including full nationalization of the hospital, partial management by the state, transferral of management to one or two of the larger health maintenance organizations – or closure, the least likely scenario.

The general feeling at Hadassah, on almost all sides, is that the period of court-ordered protection – i.e., the stay of proceedings – has not brought the parties any closer to finding a solution.

In a meeting of hospital employees on Sunday, Hadassah director general Avigdor Kaplan called on doctors to reach an agreement this week. “If we don’t come up with a recovery scheme," he said, "we will quickly find ourselves in an even worse situation.”

Kaplan criticized the government's unwillingness to resolve the crisis, and accused the Meuhedet HMO of acting to hasten Hadassah’s demise so as to take control over the Mount Scopus facility.

“The stay of proceedings has done nothing good and also makes the operational and business side of running the hospitals very difficult,” said a senior government official. The scope of services at the two facilities is dropping, personnel are leaving, new residencies are not being started and young doctors are moving elsewhere, he said. “A hospital is not a factory,” the official added. It is a much more complicated and dynamic system.

The number of births at the hospitals has dropped 20% in recent weeks and it will take years to rectify that, he said, plus 15 nurses have already left and the number of operations has dropped by 30%.

What exactly is happening during this difficult period at Hadassah?

1. Finances: The money is running out faster than expected. Hadassah Medical Center will run a deficit that is 30 million to 50 million shekels ($8.6 million to $14.3 million) higher than predicted during the 90-day stay of proceedings period. The reasons: the 16-day strike in February and the drop in medical services being provided.

February revenues were 45% lower than in January: 118 million shekels compared to 208 million shekels. The drop continued in March, and daily revenues from services that month averaged 5.9 million shekels a day compared to 6.8 million shekels before the 90-day period.

At the same time expenses unexpectedly increased for various reasons. Hospitals reduced the salary cuts it originally proposed from 10% to 6% on average. May is supposed to be even worse, as employees will receive even less than April's wages because Hadassah Medical Center will deduct nine days of work due to what it calls a past “human error.”

Moreover, the trustees have decided to deduct money from the monthly salaries to be paid in May – plus employees will see a further cut because pay for the days of the strike will also come out of that month's wages – unless an agreement is reached before then.

2. The doctors: The doctors say they strongly oppose liquidation, which they view as a “financial/legal trick intended to break them.” But they are also preparing for the morning after. The head of the union of department heads, Prof. Dror Mevorach, said the doctors are considering creating some form of joint ownership of the hospitals in case of liquidation, a sort of medical cooperative, which is something that does not exist in Israel,

Mevorach added that the workers are the largest creditors of Hadassah, and are owed about 70% of the hospitals' debts. The doctors have lost faith in management, the government and the Hadassah women's organization.

The doctors know their strength, since the hospitals cannot function without them, no matter what happens.

3. Retired employees. Director Kaplan told doctors Sunday that he is embarrassed about the situation of some 200 former hospital employees, who took voluntary early retirement in recent years as part of various rehabilitation schemes – but have not been receiving the money. They were supposed to receive pension payments from Hadassah until they reach mandatory retirement age, when their official pensions will kick in, but this has not happened since the beginning of the stay of proceedings period. For many this payment is their only means of financial support.

On Thursday, the trustees asked the court to urgently approve a 50-million-shekel outlay for these retirees. The trustees told the court that they could even claim their agreement was null and void, and Hadassah would have to rehire them; in addition, nonpayment would make it likely that other employees would not agree to any other plans proposed to Hadassah to encourage workers to leave voluntarily.

4. The Hadassah women. Hadassah, the Women’s Zionist Organization of America, has presented a most detailed and critical report on the situation to the committee studying the crisis. In its harsh, angry and aggressive indictment, the organization accuses the state for the medical center's predicament: The root of the crisis is the state’s discrimination against Hadassah hospitals, as compared to government-owned facilities, in the form of the unfair regulatory conditions that exist between the two Jerusalem hospitals and the country's health services.

The women's organization also charges that the state has a built-in conflict of interest: It protects the budgets of the HMOs and government hospitals at the expense of the Hadassah hospitals and the organization. The organization recommends establishing separate wards for public and private patients at the hospitals, and increasing the amount of private services offered. The women's group also accuses the state of not really wanting to solve the current crisis, and of a desire to take the hospitals away from the organization.

A number of factors led to the collapse of the Hadassah Medical Center, but the government is at fault for all of them, said the organization. The two Jerusalem hospitals do not receive the grants that other hospitals receive, but are still subject to Health Ministry’s regulations, price levels on services set by the state, collective bargaining agreements and the requirement to run a public emergency room. If Hadassah Medical Center had received equal treatment from the government, the group charged, it would not be in the state it is in today.

The document includes almost no criticism of the women's organization or of the hospitals, except for saying that no one disagrees that the medical center must undertake significant efficiency measures, but even the strictest recovery plan will not prevail, and even the most successful management will not succeed in the task of recovery as long as government policy does not change.”

A senior government official said in response: “The Hadassah women are still concentrating on finding those at fault and not on solutions. They need to tell the state: ‘Come in as joint owners in return for regular funding, oversight and long-term stability.’ The state must also understand that it has no choice but to put its hand into its pocket [and pay]. In return it will receive a part in management, and a role in supervising wages and in decisions as to how the private medical services will look.”