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Control of HMO to be transferred to independent board
By JUDY SIEGEL-ITZKOVICH
08/04/2014
Gabai Committee says management control, “property” must be handed over both from the HMO and the HWZOA to the state to eliminate deficit.
 
Leaders of the Hadassah Women’s Zionist Organization of America reacted with shock, disappointment and expressions of betrayal on Tuesday over recommendations of the Gabai Committee that Health Minister Yael German set up to find a solution to the Hadassah Medical Organization’s severe financial predicament.

The health minister called the committee “professional, serious and businesslike,” and said that in the coming days, she would consult with officials on what and how to implement the recommendations.

The 33-page, Hebrew-language report recommended that control of HMO be transferred from HWZOA to a completely independent board of directors, but that maximum efforts be made not to nationalize the veteran medical organization that the women’s organization owns and built.

The committee, chaired by former Treasury official and Bezeq CEO Avi Gabai and including six others – mostly from the Finance and Health ministries – urged that with the transfer of management control, “property” must be handed over from the Hadassah Medical Organization and the HWZOA to the state. This is to eliminate the HMO’s deficit, and in exchange for Finance Ministry allocations to keep it afloat and its two Hadassah University hospitals functioning.

The committee said it went about its work “without looking for those personally responsible for the crisis, but to identify failures in processes that occurred so that lessons on a national level could be learned.”

The amount and type of properties that should be transferred to the state were not specified.

German said the solution to the financial crisis “must be based on contributions of all sides to help the hospitals return to ongoing activity and to act for the benefit of Jerusalemites and residents of the region.”

She praised the committee for writing its report within five weeks of its appointment, hearing 30 witnesses and reading nearly 40 documents.

Gabai said that “with the problems and failures we discovered in HMO, it is a private case of problems and challenges that exist in many other public and semi-public bodies, thus it is important to read our report.”

The two hospitals and HMO’s medical, nursing schools and other professional schools were nearly paralyzed during a damaging three-week strike and labor measures in February. The capital’s Shaare Zedek Medical Center capably filled in to treat patients who were denied Hadassah’s nonemergency care. In the meantime, some of Hadassah’s 6,000 doctors, nurses and others professionals whose paychecks will be reduced have begun to think about finding another professional home; some have already left to work at hospitals in other parts of the country. HMO has an annual turnover of NIS 2 billion, a running deficit of NIS 300 million and accumulated debt of NIS 1.3b.

The Gabai Committee said the blame for the crisis should be shared by nearly all involved in the financial troubles. Among the blamed were the Finance and Health ministries were blamed for lack of financial supervision and not warning about the debts years ago, exaggerated “capping,” and health-fund discounting arrangements that crippled HMO; the HWZOA, for failing to recognize the looming financial crisis, being a monopoly in fund-raising, appointing an impotent board of directors and severely reducing its annual financial support to HMO; present and past HMO managements for running the organization in an atmosphere of “plenty” whose HWZOA would seemingly always come to HMO’s rescue; and some doctors who functioned arrogantly and enjoyed generous SHARAP (private medical service) payments.

It noted that Prof. Ehud Kokia’s sudden resignation in January 2013, after less than 18 months as HMO director- general because he said he “discovered the severity of its debts” wasted precious time in finding a solution.

The committee criticized current HMO director-general Avigdor Kaplan for “harping on the past” and issuing criticism that did not help reach a solution.

The committee recommended that neither HWZOA nor any other group have veto power on the board, unlike the previous boards that the women from the US controlled.

In addition to HWZOA’s fund-raising for HMO, separate friends’ organizations in Israel and abroad would raise money independently. The government would help HMO in a recovery program so it could reach longterm financial stability, “while preserving the excellence that exists at Hadassah,” the committee said.

The report praised HWZOA for its monumental contributions to the State of Israel over the years and noted that longtime director-general Prof.

Shlomo Mor-Yosef, who left his post in 2011, had raised huge sums for the building of the new hospitalization tower in Jerusalem’s Ein Kerem.

While management mistakes were made, the committee said, it did not find that senior managers had acted for their personal benefit.

The committee said it regretted intense media criticism (“sometimes not innocent”) of “high-quality administrators” such as Mor-Yosef and his deputy, Dr. Yair Birnbaum, when the financial crisis became clear. “They created a medical institution of medical and research excellence.”

The Gabai Committee did not recommend changes in SHARAP, explaining that it preferred to wait for recommendations of the German Committee on Promoting the Public Health System, which will include a recommendation on the future of private medical services in the hospitals.

The Health Ministry, the document continued, must examine every development project with a general view of things, including consideration of its cost in the future.

Barbara Goldstein, deputy executive director of Hadassah’s office in Israel and past HWZOA national vice president, told The Jerusalem Post on Tuesday evening that she was discouraged and shocked by the statements in the Health Ministry’s press release on the committee, but that she had not read the whole report.

But, she said that she talked to HWZOA national president Marcie Natan, who “felt the committee was skewed from the beginning because it contained so many representatives of the Finance and Health ministries. Now that she has heard the recommendations, Marcie couldn’t believe it.”

Thus HWZOA decided not to testify or participate in the committee’s deliberations; however, it finally did send in a position paper.

“Some of the people who spoke before the committee were those who put us in this terrible situation,” Goldstein said. “The document says – now the government will take over, and you women of Hadassah will pay for the privilege.”

Goldstein, who was asked to speak to the Post on behalf of Natan in New York, said the negotiations in the past few months between HMO and HWZOA on the one hand and the government on the other “were in bad faith. The committee wants to take our assets on land. We own HMO’s buildings, so if they want to use them, they should have to pay us rent. Maybe we look naive, but the committee now wants somebody else to run HMO, and we will have no veto power.”

Goldstein said that American Jewry still needs Hadassah and wants to look up to HMO. “The women need a tangible relationship with Israel. They are proud that medical research and treatment here are comparable to the best in the world. We never considered what we do as charity; we wanted to make Israel a better place. Israel has the privilege of having HMO. We are prepared to invest more money in it.”

The deputy executive director of the Jerusalem office said she believed that in the end, “the government will listen.” But she added that while Prime Minister Binyamin Netanyahu had known for some time about HMO’s troubles, “he hasn’t said anything yet.”

Natan has met with Finance Minister Yair Lapid and German, but so far without results. She criticized German for not telling Natan in advance that the report was coming out and what the recommendations were.

Goldstein said that the “government has to come up with a better solution. HMO looks like a sinking ship, but it isn’t. Lives are saved there everyday. The Gabai Committee’s recommendations are not binding.”

Meanwhile, Jerusalem District Court Judge David Mintz has called for an emergency session on Sunday for the sides to report on the results of negotiations and on the freezing of financial activities of HMO nearly three months ago that will end soon.
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