Hadassah Medical Organization gets new life as all sides agree to recovery program

Once creditors approve the program, in which all sides made significant concessions, the court will then end the financial freeze.

By JUDY SIEGEL-ITZKOVICH
Hadassah Medical Center, Jerusalem. (photo credit: Wikimedia Commons)
Hadassah Medical Center, Jerusalem.
(photo credit: Wikimedia Commons)
which the future of the Hadassah Medical Organization was endangered by a NIS 3 billion debt, the government, five different hospital unions and the Hadassah Women’s Zionist Organization of America have accepted a painful recovery program.
On Tuesday, the creditors are due to approve the program, in which all sides made significant concessions, and Wednesday, the Jerusalem District Court will begin to bring an end to the freeze of HMO’s financial activities.
This is meant to put HMO on a new path and give it a hopeful new life in Jerusalem.
The agreement, forged by the Treasury, and with behind-thescenes involvement by Jerusalem Mayor Nir Barkat and the Histadrut labor federation, will mean the dismissal of a few hundred more administrative, paramedical and maintenance workers and early pension agreements for about 30 physicians.
However, it will not entail the closing of HMO’s Mount Scopus hospice, osteoporosis center, psychiatric department, School of Dental Medicine or other facilities that were endangered during negotiations.
Nothing will be closed now, and nothing in the future without agreement from the Finance and Health ministries.
The NIS 3b. debt will be eliminated in equal parts by HWZOA, which own all the facilities, and by the Treasury. HWZOA will forgo 25 hectares (60 acres) of land in Ein Kerem that the government will sell, along with ownership of the “Little Hadassah” clinic currently rented out to other facilities and some Jerusalem apartments.
HWZOA has committed to make a onetime gift of $25m. and to complete its $360m. modern hospital tower on the Ein Kerem campus, as well as to provide $19m.
in financial aid for operating expenses.
HWZOA will retain control of its property and have four board of directors members, along with four others representing the public (to be chosen by a retired senior judge) and a chairman to be appointed by HWZOA and approved by the government.
Previously, HWZOA had a large majority and monopolized the running of HMO.
Monthly board meetings will be held in Jerusalem, and not in New York, starting in January.
The Treasury will supply up to NIS 190m.
as compensation for early retirement of some staffers and establish income targets.
It will also finance more profitable delivery rooms at the Mount Scopus hospital and help pay for insurance protection against lawsuits over medical malpractice. About NIS 100m. will be supplied to strengthen HMO’s medical faculty and preserve medical residencies.
According to a Treasury demand mitigated somewhat in the last week, an external accountant will make some financial decisions and “raise the red flag” when financial problems arise, but he will have less power than originally conceived in a previous version of the recovery plan.
HMO director-general Avigdor Kaplan, who was brought in by HWZOA about a year ago to save the day, stated in a formal letter on Monday that he would agree to the recovery plan despite his opposition to the role of the accountant.
Kaplan said the authority the accountant will have limit his powers too much.
Kaplan, a septuagenarian insurance expert and businessman, is likely not to stay on in his post in the long term. A new director-general will eventually be chosen by HWZOA for approval by the board.
The two lawyers who were appointed as trustees, Lipa Meir and Asher Axelrod, will complete their service soon.
Prof. Dror Mevorach, the director of the internal medicine B department in Ein Kerem who heads the hospital’s committee of department heads, told The Jerusalem Post that “this is not the end but the beginning of a new path for HMO.
The vote by senior doctors today ended with 435 in favor of the recovery program and just 15 against,” he said.
For months, opposition by the doctors to what they viewed as excessive concessions prevented agreement.
He hoped that the next director-general would be a physician, but praised Kaplan, who “came to pull HMO out of the mud.
He succeeded in most aspects of his tasks. I don’t know what kind of manager he would be in normal times. But he learned a lot.”
Looking back, Mevorach said the dispute should not have gone on so long and added that the strike of several weeks against management and in protest of government policies regarding HMO “was devastating and very damaging.
Important doctors have or will leave, as have some nurses.
“If doctors leave, they will be replaced by others. Every bad thing can also lead to renewal. We want staffers to remain because it is good for them.”
As for gains at the competing Shaare Zedek Medical Center, Mevorach said he wishes it success and development, as “competition in the quality of medical services is very healthy and will serve Jerusalemites.”
Asked whether he personally lost in the long run, Mevorach said his salary has been reduced by 10 percent, but “a more important loss was a four-month delay in my research on three immunological diseases I discovered in children.”
A major achievement for HMO, according to management sources, was that after many decades, the government has recognized that hospitals owned by voluntary organizations deserve to be valued and supported, and that they are also the business of the state that received medical facilities and service from the charitable organizations.
This could serve as a legal precedent in any future eventuality of financial crisis in voluntary hospitals.
The government did not approve the HWZOA and HMO proposal to set up a separate private hospital on the Ein Kerem campus, in one of the buildings vacated for the new hospitalization tower. Such a building, they proposed, would be the site of private medical services (Sharap) carried out by senior physicians in afternoons and evenings rather than its continuation in regular departments.
Avi Nissenkorn of the Histadrut said he was involved in bridging the dispute because “I saw only one task, to save Hadassah and prevent its dismantlement. I want to cite the responsibility and maturity of the staff throughout the negotiations while making very painful concessions.
After the court approves the agreement, all must join hands together for the success of HMO as one of the leading medical institutions in the world.”
A government source close to the negotiations said that “we didn’t enjoy the talks.
It’s very complicated to get approval. It probably could have ended earlier, but there is an internal clock in each dispute.
HMO is a vital institution, and there is no alternative to it. The state does not run voluntary hospitals. We won’t control HMO.
The management has that responsibility.
Problems at HMO were ignored for many years. There was arrogance, even megalomania and a feeling that money could be spent freely because HWZOA had deep pockets. Now things will be different.”
Michal Shalem, the chief of staff at the Jerusalem Municipality, told the Post that resolving the long dispute was very important to the mayor, who worked many days and nights behind the scenes.
“There is no Jerusalem without Hadassah. HWZOA was sometimes treated badly.
Now we hope there will be a true partnership between HWZOA and the government. Thought must be given to build a business plan to run HMO without deficits,” she said.
In the Knesset Finance Committee’s session on Monday summarizing the HMO’s problems, Bayit Yehudi MK Nissan Slomiansky, said his committee will continue to follow up on the issue after the recovery plan is implemented.
He called on the Treasury and the government in general to avoid a similar crisis in other hospitals around the country so they too will not be plunged into crisis like HMO.
“Such crises can be prevented in advance,” he said.
Prof. Arnon Afek, who will become director- general of the Health Ministry in 10 days and until now has headed its medical branch, said that choosing the board of directors, setting down the new management framework and preserving excellence at HMO will now proceed.
The issue of Sharap will continue to be discussed at the ministry, he added.
United Torah Judaism MK Moshe Gafni concluded that the public health system cannot be preserved without government infusion of money.
“When they don’t want to give money, in the end they have to give a lot more money because they didn’t do it in time. I oppose the idea of an HMO supervising accountant, as it is an obsession of the Treasury to do so when it gives money.”