At least some of the doctors, nurses, maintenance workers, and other employees at the Hadassah Medical Organization (HMO) hospitals have been taking advantage of the generosity and volunteering spirit of American Jewry – particularly Hadassah, the Women’s Zionist Organization of America – for some time now. And HMO’s board of directors and managers have done precious little to stop them. That is the impression one gets when perusing shocking new information brought to light in recent days.

On Friday, HMO, which runs the Hadassah-University Hospital in Jerusalem’s Ein Kerem and Hadassah Hospital on Mount Scopus, asked the Jerusalem District Court to freeze legal proceedings against its NIS 1.3 billion deficit. In order to justify its request, which would temporarily save HMO from financial collapse by postponing the payment of debts to banks and service providers, HMO provided outrageous details on the inner workings of the hospital.

For instance, HMO revealed there are 900 “managers” employed at its two hospitals, when in reality there are just 400 who actual engage in managing something. For more than half of them, the title “manager” is just a way of milking more money out of HMO’s generous donors.

It was also revealed that dozens of HMO employees lie about working overtime. Sources in the Treasury said, that compared to other hospitals of comparable size, the two Hadassah hospitals have a surplus of workers.

Another example of how Israeli employees of HMO might be taking advantage of funds donated from abroad is the practice of providing all HMO employees and their families, numbering altogether 25,000, with 75 percent free medical services (with the remainder provided by the health funds). They also receive dental care at a discount.

Another dubious practice is HMO’s private medical service, known in Hebrew as Sharap. Senior Hadassah doctors legally use HMO’s hospital rooms and equipment to receive private patients – but sometimes even in the morning hours when they are supposed to provide public medical services and are getting paid to do so. The doctors pocket most of the profits. Out of a total of NIS 254 million received for private medical services, HMO received just NIS 40m. or 16 percent, while the doctors received all the rest.

The practice of providing private medical services within a hospital that is also obligated to provide public health care creates inherent conflicts of interests.

But it seems that other hospitals, such as the capital’s Shaare Zedek Medical Center, which also juggle these conflicting interests, do so more successfully.

Could it be that the reason for the waste, the high salaries, and the general atmosphere of disregard for responsible management has something to do with the way HMO is funded? Unlike other hospitals and health maintenance organizations, which receive hundreds of millions of shekels in government financial support annually, HMO receives nothing from the government.

Its budget comes from Hadassah, the Women’s Zionist Organization of America, which has contributed some NIS 2b. to HMO from 2005 until the first half of 2013, all raised from donations. But HWZOA is not directly involved in the running of HMO. Rather, the Israeli management, board-of-directors, and strong workers unions are the ones deciding how to spend the money.

If HMO were funded by the state – and especially if it were run by private business interests based inside Israel – it seems likely that the sort of waste at HMO that has come to light in recent days would never have been tolerated. Perhaps because the funding was provided by donations from American Jewry, the level of accountability by Israelis was lower.

This might explain why it is that for years now HMO’s Israeli management and board-of-directors have never cracked down on the waste, the high salaries, and the bloated workforce.

Whatever the reason for the waste, however, HMO has now entered a difficult period. The time has come for HMO to make the necessary streamlining and reforms needed to keep its budget in order. This means painful layoffs, salary cuts, and closer monitoring of the way private medical services are provided. It is unfortunate that the situation had to reach crisis proportions before significant steps could be implemented.

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