Hospital Crisis Nears End as Hadassah, State Edge Toward $870 Million Recovery Plan

Health and finance ministries object strongly to some parts of proposal, which calls for hundreds of layoffs - including dozens of doctors.

Ronny Linder
Ronny Linder
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Hadassah hospital in Jerusalem.
Hadassah hospital in Jerusalem.Credit: Shiran Granot
Ronny Linder
Ronny Linder

The court-appointed trustees handling the case involving the future of Jerusalem’s financially troubled Hadassah Medical Center submitted a recovery plan early Friday that would call for an injection of funding of nearly 3 billion shekels ($869 million) over the next seven years, to be provided equally by the government and the New York-based Hadassah women’s organization.

Health Minister Yael German and a top Finance Ministry official have already taken exception to some details of the plan, and it may be subject to adjustments. The plan would involve substantial changes at the medical center’s two Jerusalem hospital campuses, placing them under stricter government supervision and changing how private medical treatment – known in Hebrew as “sharap” – would be dispensed and supervised. It would even change the composition of the medical center board and the government’s involvement in it. However, in a major achievement for Hadassah, the Women’s Zionist Organization of America, it will remain under the ownership and control of the women’s group.

There will be a new nine-member hospital board of directors, including the chairman. Four members will be appointed by the Hadassah women’s organization and four by a public committee. Nominations for chairman will be made by the New York-based organization, but the Israeli government will have the right to veto proposed candidates.

Seven of the nine members will be Israeli, including the four appointed by the public committee, two of the women’s organization’s nominees and the chairman. The new board will have greater authority than the existing one.

The plan calls for the layoff of hundreds of staff, including dozens of doctors, the closure of a hospice care facility for terminally ill patients at the Hadassah Mount Scopus campus, and a halt to some other services. There will be no layoff of nurses, who are already in short supply.

The proposed recovery plan, which it is believed will probably be approved with some possible changes, was submitted to the Jerusalem District Court by trustees Lipa Meir and Asher Axelrod based on a late-night agreement reached with the Hadassah women’s organization. A creditors’ meeting is scheduled for Tuesday on the plan. The case went to court after the medical center filed for court protection from creditors in February.

Although not rejecting the entire plan out of hand, the director of the Finance Ministry’s budget division, Moshe Bar Siman Tov, said Friday that the government would not be dictated to over the future of Hadassah Medical Center. He noted two particular provisions of the proposed plan that he saw as problematic. One was that no outside comptroller would be assigned to oversee the hospital during the recovery period; the second was that the plan permitted Hadassah Medical Center to expand its private medical treatment services beyond the public health services it provides. He said the plan provides the basis for ensuring the hospital’s stability, but said additional steps are necessary.

“There aren’t things here that are impossible to rectify, but we don’t automatically accept things,” the budget-division director said. “We’ve invested thousands of hours and hundred of millions of shekels in a settlement so that it is successful and not a failure, but there are things that are possible from our standpoint and things on which there can be no compromise.”

On Saturday, Health Minister German expressed the belief that the crisis at Hadassah was nearing its end, but was also adamant about the appointment of an outside comptroller and said no hospital services would be eliminated without her ministry’s approval.

Hadassah’s doctors haven’t yet consented to the blueprint and may object to some provisions – including the elimination of some services such as overnight facilities for psychiatric patients as well as the closure of the hospice for terminal patients, a subject that was not raised with the physicians during negotiations.

The plan also calls for the layoff of 30 doctors and researchers by September. It provides that the hospital’s share of revenue from the private medical treatments be nearly doubled. Israel Medical Association chairman Leonid Edelman confirmed that most of the doctors’ demands had been met by the plan, but called for adjustments to be made by Tuesday.

The trustees’ plan is mainly part based on agreements reached among the government, Hadassah women’s organization and the Histadrut labor federation that would have the government inject about 1.5 billion shekels over seven years. In addition, the government would assist the hospital in setting up a private medical facility in the old hospital tower at the Ein Karem campus, where Hadassah Medical Center would be able to sell private medical services such as laser surgery and plastic surgery.

“Now the parties must decide the fate of the hospital,” the court trustees said. “If, heaven forbid, the suggested plan is not adopted as stated, there will be no choice other than putting [the hospital] into liquidation proceedings for an unknown period of time, which it will have difficulty recovering from,” they warned.

The Hadassah women’s organization has committed to providing $19 million in annual support for the seven-year period, consisting of a total of about half a billion shekels over the period. This includes 137 million shekels to complete the new hospital tower at Ein Karem, an additional grant of 86 million shekels and forgiveness of repayment of a 35 million shekel loan from the women’s group. The plan would also call for the transfer of assets, of an amount to be determined, from the women’s organization to the government. The plan includes a commitment that the hospital would not set up a nonprofit fund-raising organization that would compete with the Hadassah women’s organization, but the hospital would be allowed to accept earmarked contributions from donors outside of the United States and Canada with the approval of the board of directors.

Striking Hadassah doctors in Jerusalem, Feb. 9, 2014. Signs read "Save medicine at Hadassah."Credit: Emil Salman

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