Government rejects request by deficit-plagued Hadassah for cash

Netanyahu, Lapid, German condition aid on a health fund running group’s two Jerusalem hospitals.

By
August 13, 2013 02:38
Avigdor Kaplan

Avigdor Kaplan 370. (photo credit: Avi Hayoun)

The highest levels of government have turned down a request by the Hadassah Medical Organization (HMO) for a major financial gift to reduce the group’s severe short- and long-term deficit, which totals NIS 1.6 billion.

At an unpublicized meeting in the Prime Minister’s Office two weeks ago, senior government representatives suggested that if the Hadassah Women’s Zionist Organization of America (HWZOA) – which owns HMO’s two Jerusalem medical centers – were to forgo some of its ownership of the hospitals and transfer their management to one of the country’s four public health funds, a deal could be worked out, The Jerusalem Post has learned.

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Attending the meeting were Prime Minister Binyamin Netanyahu, Finance Minister Yair Lapid, Health Minister Yael German, HMO director-general Avigdor Kaplan, HWZOA national president Marcie Natan, and a number of senior government officials.

The world-renowned Hadassah hospitals, while having a dedicated and talented staff of 5,000 doctors, nurses, researchers and paramedical and support staff, are also known to have hidden unemployment, or redundant workers, which makes the hospitals less than efficient.

The government officials suggested that a strategic partnership was necessary between one of the health funds and HMO, whose board of directors includes a majority representing the New York-based women’s organization.

As there is no mechanism or precedent for the ongoing transfer of large sums to HMO, the officials thought that having one of the public health insurers manage the two hospitals would be preferable. The health funds already receive regular funding from the government via health taxes and allocations.

Asked to comment, the Prime Minister’s Office would neither confirm nor deny that such a condition had been proposed. But it conceded that the meeting had taken place and that the prime minister had instructed German and Lapid to “establish a team they would head that would work together with HMO management to implement an inclusive and comprehensive recovery plan for the hospitals as soon as possible.”

German declined to comment when the Post asked for a response, as did the Finance Ministry spokesman.

Although the Post was told on Sunday that a senior HWZOA representative in Israel would comment, no response was forthcoming.

Health funds did not respond to queries either.

The only person involved who agreed to speak to the Post was Kaplan – a former director-general of Israel’s largest health fund, Clalit Health Services, and chairman of the board of Clal Insurance Enterprises Holdings until he was named HMO’s first non-physician director-general a few months ago.

Kaplan said he had initiated the meeting with the prime minister.

“We favor business cooperation with a health fund – every health fund – on health services in the community and medical services in the hospitals. But we will not agree to merging with a health fund or for it to control HMO or the hospitals.

We oppose that and would not forgo even partial ownership. Hadassah cannot be swallowed up by anybody,” he declared.

“If there were cooperation with a health fund... we would not close departments or make dismissals as a result, but aim to improve and expand our services,” he added.

Medical administrators have suggested that the most efficient way of running hospital services in Jerusalem would be to merge Hadassah’s 1,000-bed hospitals with the 850 beds of Shaare Zedek Medical Center, which the Treasury chose earlier this year to run the bankrupt Bikur Cholim Hospital in the center of town.

This would allow the closing of redundant departments and units, and allow the consolidation of others.

However, while the city of Beersheba and the entire Negev, for example, make do with a single hospital – Soroka University Medical Center – such an arrangement is unlikely to be considered for Jerusalem because of tradition going back more than a century, claims of monopolistic practices, and the three medical centers’ status as employers of many thousands in the city, among other reasons.

Asked about the claim that HWZOA had given HMO $129 million less over the past five years for maintaining its current level of operation, medical equipment and research – excluding capital investments – Kaplan said that “over the last seven years HWZOA has given HMO NIS 2.2b. for the new $360m. hospitalization tower [at Hadassah University Medical Center, Ein Kerem] and other infrastructure.”

But longtime former HMO director-general Prof. Shlomo Mor-Yosef – who is now director-general of the National Insurance Institute – was a popular fundraiser for HMO in the US. Kaplan is said not to have the time, inclination or charisma to do the same today.

Kaplan said the government could have prevented HMO’s distressing financial straits, claiming the government had “discriminated especially against Hadassah.

It should have given us money for ongoing costs and research.”

Under pressure from the health funds and inclusion in the Treasury’s Arrangements Law, HMO is required to give the four public health funds a 25-percent discount on their bills for medical care their members receive at the hospitals, compared to only 22% at Shaare Zedek and 16% at government hospitals.

In addition, the “capping” mechanism the government has set down forces Hadassah and Shaare Zedek to forgo payment if they provide an “excess” of care to patients. This is meant to prevent “overuse” and “superfluous care” on the part of the hospitals, as this would cost the health funds more money.

“No health fund will take over the running of HMO hospitals. Hadassah is not suitable for being run by a health fund,” Kaplan reiterated, though he conceded that “the prime minister was not thrilled by my idea of the government giving HMO a major grant.”

Still, HMO is “not a sinking ship. We have not been given any indications that staffers want to go elsewhere,” Kaplan insisted. “I urge the authorities not to throw the baby out with the bathwater.

Sixty percent of inpatient and outpatient services in Jerusalem are provided by HMO.”

As for which health fund would be capable of taking over the management of HMO’s hospitals, it seemed clear that Meuhedet – the country’s third-largest health fund and the second-most powerful in Jerusalem – would not be up to it; the health fund remains disorganized a few years after the state comptroller accused officials of corruption, leading to the dismissal of one director-general and most of its senior management. The Meuhedet board then dismissed the director-general who replaced him, Prof.

Asher Elhayani, although no charges were brought against him.

Kupat Holim Leumit is too small and is in deficit. Clalit has eight of its own hospitals (excluding Jerusalem), making it unlikely to be considered for running Hadassah’s two as well.

Maccabi might be the most logical choice, because it is well-run and insures more than 25% of the population. It is the second-largest health fund, though it is in deficit like all the others. Maccabi is currently building – at state expense, through its private subsidiary Assuta Medical Centers – a general public hospital in Ashdod that no one else sought through the public tender.

But Maccabi also has its critics. Jerusalemites may fear it would turn Hadassah’s medical centers into private medicine- oriented institutions like Assuta.

The Ashdod hospital has government approval for a significant chunk of its activities to consist of private medical services (sharap) – an arrangement that has been familiar to HMO and Shaare Zedek for decades, but subject to growing criticism that it enables those who pay for it not only to choose their own doctors, but also, in some cases, to jump the queue for operations and other treatments.

Heads of the HWZOA are used to getting a warm welcome in the Prime Minister’s Office, one senior medical administrator told the Post.

“They didn’t take no for an answer. But the women now understand that they have to think differently,” the administrator said. “This time they left the office depressed. The state doesn’t want to give a gift as a one-time thing. It wants a more stable arrangement.”


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