Jerusalem's Hadassah Hospital Worse Off Than Ever

Since receiving court protection from creditors, Hadassah Medical Center's finances have deteriorated even further.

The financial situation at Hadassah Medical Center’s two Jerusalem campuses continues to worsen. Since the hospital sought court protection from creditors in February, it has been losing money faster than expected.

Even the liquidation of the hospital in its current form does not appear to be out of the realm of possibility, though a shutdown is thought to be unlikely. Last week, the court trustees for Hadassah hospital, which is owned by the New York-based Hadassah women’s Zionist organization, advised the Jerusalem District Court that since receiving protection from creditors, the hospital’s revenue stream has been substantially lower than it estimated in its initial court filing. The trustees, Lipa Meir and Asher Axelrod, are expected to soon ask the court to reduce the three-month “stay of proceedings” protecting the hospital, so that a disposition of the case can be made sooner.

No one wants to liquidate the hospital, said one source involved in the negotiations. “It’s too extreme and unprecedented, certainly when it comes to a hospital of the size of Hadassah.”

On Tuesday, court trustees and representatives of the Hadassah hospital administration and the Hadassah women’s organization met at the Health Ministry to discuss the fate of the hospital. A source who was at the meeting said, on condition of anonymity, that all of the parties understand that the request for protection from creditors, known in Israeli legal parlance as a stay of proceedings, was a mistake. “It created stagnation rather than moving the parties toward a solution. The feeling is that there’s no movement,” the source said.

“The atmosphere was rough, and the picture painted by the trustees was rough,” said another source who attended the meeting, speaking off the record. “If the sides — the Finance Ministry and the [hospital] employees — don’t start showing flexibility, it’s possible that we will get to a situation of liquidation and closure.”

In a major change of tone, on Tuesday, representatives of the Hadassah women’s organization set up a protest tent opposite the Knesset and demanded that Prime Minister Benjamin Netanyahu intervene in the crisis. The organization had previously been more restrained in its criticism of the government. The demonstrators included members of the Hadassah women’s organization’s board from the United States.

Last week, Meir and Axelrod, the court trustees, informed the court that the main reason for the deterioration in Hadassah Medical Center’s financial situation was a 16-day strike by hospital staff in February, during which the Hadassah medical campuses at Ein Karem and Mount Scopus operated only on emergency footing. As a result, hospital revenues fell short of the projections included in the request for a stay of proceedings. Revenues were just 118 million shekels ($34.1 million) in February, compared to 208 million shekels in January.

Revenues from health maintenance organizations have also been smaller than anticipated since the stay of proceedings was granted, the trustees said, and the cash from medical tourism, private medical services and medical care for Palestinians has also fallen short of projections. A hospital source added that the departure of 15 operating-room nurses has resulted in a 20 percent decline in the number of surgeries being performed at Hadassah.

Despite numerous meetings with Hadassah management and staff, the trustees said there has been no substantial progress in negotiations and the sides remain far apart in their demands.

If the stalemate leads to a liquidation of the hospital as currently constituted, there are a number of possible scenarios regarding its future. The hospital could be reconstituted under the ownership of the Hadassah women’s organization, transferred to one or two of the country’s four HMOs, jointly owned by Hadassah and an HMO or simply turned into a government hospital. Given the size of the hospital’s facilities, the number of patients it serves and its role as a leading teaching center, few expect it to be shutdown.

Olivier Fitoussi