Published On: Sun, May 11th, 2014

Troubled Hadassah Hospital to Get $869 Million in Funding

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Currently in court appointed trusteeship, Hadassah Hospital in Jerusalem may get a financial reprieve.

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Located in the Ein Kerem section of Jerusalem, Hadassah Hospital, the largest in the city and one of the most prestigious in Israel, has been making headlines this past year due to its financial woes. Doctors and nurses alike have engaged in work stoppages demanding more pay and better working conditions. A new deal has been announced to bail out the financially troubled Hospital.

The Israeli government, together with the New York based Hadassah Jewish Women’s organization, the hospital’s patron, are said to have reached a an agreement to provide 3 billion Shekels ($869 million) over a seven year period to save it. This according to a recovery plan submitted by court appointed trustees on Friday. Hadassah and the Israeli government will split the 3 billion equally.

The trustees, Lipa Meir and Asher Axelrod, were appointed by the court in February when Hadassah sought protection from its many creditors. Those creditors will meet on Tuesday to review the plan.

The Hadassah Women’s organization was said to have agreed to provide $19 million in annual payments over the seven-year period. This money will be used to complete current projects such as a new hospital tower in Ein Kerem and to pay off loans. Hadassah will also forgive a $10 million loan which it gave the hospital. The Hadassah organization also received a guarantee that the hospital would not establish its own non profit fund.

Hadassah Hospital also has a smaller location on Mt. Scopus. The Mt. Scopus hospital was the original, but after Israel’s war of independence it could not be accessed and so an entirely new facility was constructed in Ein Kerem.

Not everyone is happy with the bail out plan, though. It would require that the two locations allow greater government supervision over the private medical treatments that they offer, which are currently a cash cow for the hospital. The government will also have a larger role in the hospital’s governing board.

But the Hadassah organization, also known as the Women’s Zionist Organization of America, will keep its control of the hospital. It will appoint four out of the nine members of a new board of directors. The other four will be appointed by a public committee and the chairman will be nominated by Hadassah, but be subject to the approval of the Israeli government.

The rescue plan will not be popular with hospital staff and patients alike. It calls for the termination of hundreds of employees, including 30 doctors by the fall and for the closing a hospice which cares for the terminally ill. The doctors have not yet voiced their approval for the deal. The hospital will also need to do away with overnight services for the mentally ill.

Skepticism has also been voiced from government officials, such as the director of Israel’s Finance Ministry’s Budget Division, Moshe Bar Simon Tov. He is not happy with the ability of the hospital to expand its private medical services.

“There aren’t things here that are impossible to rectify, but we don’t automatically accept things. 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,” he said.

If the sides cannot agree to the deal then the hospital’s future will be in doubt.

Hadassah’s trustees stated, “Now the parties must decide the fate of the hospital. 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.”

Hadassah Hospital Jerusalem first opened on Mt. Scopus in 1939 as part of a series of medical projects in Israel funded by the Zionist Women’s Organization. Because Mt. Scopus was left as an island of Israeli territory behind the new official Jordanian border as set by the 1949 armistice between the two countries, the hospital there could no longer be used. In 1961 construction began on a new permanent home in Ein Kerem after years of changing locations.

Henrietta Szold founded the Hadassah organization in New York in 1912. It currently has more than 300,000 members around the world and continues to support health and education causes.

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