Hadassah and Hubris Part 7

From Haaretz -- the argument for nationalization:

Thank you for your money ladies, and good-bye

By Anshel Pfeffer | Feb. 21, 2014 | 12:00 PM

Hadassah, The Women's Zionist Organization of America laid the foundations for modern medicine in Israel, but the medical center’s crisis is a signal that Israelis must take responsibility for themselves 

 

There is probably not one Israeli today who has not benefitted at some point in life from Hadassah University Hospital, was born or had a child enter life there, received treatment or underwent an operation. Even if they and their family members never entered one of the Jerusalem hospitals at Ein Karem or on Mount Scopus, they were certainly treated by doctors and other medical practitioners who graduated from Israel’s oldest and arguably still most prestigious medical school.

And yet only a small minority of Israelis and not even most Jerusalemites were aware until a few weeks ago of the fact that the hospital they regard as a national institute and constant fixture in their lives is actually owned by a group of Jewish philanthropists in America, Hadassah, The Women’s Zionist Organization of America. In its 102 years of existence, Hadassah may have laid the foundations for modern medicine in Israel but that is of little relevance to Israelis today. The organization’s founder, Henrietta Szold, deserves to be remembered as one of the great pioneers of Zionism, but there was little room for her in the masculine pantheon of fighters, generals and politicians. Founding hospitals and nursing schools was never going to be as sexy as leading men in battle, and Szold did herself no favors by supporting Brit Shalom with its belief in a binational state and Jewish-Arab cooperation. After her death in 1945, Hadassah Women continued to prosper for decades as one of the most influential Jewish organizations in the U.S., famed for its fund-raising, while Israelis just got used to having the hospitals.

Now, all of a sudden, they have been thrust into the spotlight as an ugly battle of blame is being fought out in full media glare over responsibility for the 1.3 billion shekel deficit that has left the medical center, the biggest private employer in Jerusalem, incapable of paying salaries and forced to appeal to the courts to get the creditors of its back. There’s a long list of culprits − senior management who hid the full figures, the government which failed to regulate, the health maintenance organizations which forced Hadassah into disadvantageous arrangements, wealthy doctors who used the hospital as their base for private treatments, unions who gouged preferential terms for favored members and the good women from overseas bequeathed Hadassah an archaic ownership structure and a $360 million 14-story new hospital tower that the hospital cannot afford to operate.

Nothing is holy in this very Israeli mud-fight, and no one is coming out well. The media have been inundated with wild figures of senior doctors’ and executives’ salaries, the details of former executive director Professor Shlomo Mor-Yosef’s golden parachute, how respected members of the board looked the other way and sordid stories of how Hadassah women lost much of their investment fund in the Madoff scandal. They tried to remain above the fray, preferring instead to use PR people and direct the blame elsewhere, and really, why should they be blamed? All they did over the years was to donate hundreds of millions and ensure that the people of Jerusalem enjoyed a first-class level of medical treatment, but they have been forced to fight back because now they are being faced with the ultimate humiliation: nationalization of the medical center that will wrest control over its affairs from their hands. How could the people of Israel be so ungrateful after all we have done for them?

There is no question that Hadassah should be nationalized. An organization that has created for itself a 1.3 billion shekel deficit and can only be saved by a massive government bailout has no alternative but to cede ownership and effective control to the state. Or else go under. Arguing that the funds Hadassah provided over the decades should grant the organization perpetual private ownership disregards the fact that even before the looming bailout, it was in reality a public medical center, with the lion’s share of its budget always coming from the Israeli taxpayer. There are other ways to recognize Hadassah women’s contribution than clinging to a historical anomaly that contributed, at least in part, to the current crisis.

The arguments made by Hadassah President Marcie Natan and Israel Director Audrey Shimron against nationalization make as much sense as the Rothschild family issuing a demand that since it funded much of the construction costs of the Knesset and Supreme Court buildings in Jerusalem, they also get to appoint the MKs and justices. If there were six or seven other general hospitals serving the capital then maybe it would make sense, but Hadassah operates two out of Jerusalem’s three main general hospitals.

Conceivably, if they had the necessary funds to dig Hadassah out of its hole, they may be allowed to retain some control, but the most they are capable of offering is $25 million from their depleted investment fund, less than 10 percent of what the hospitals’ need to ensure their long-term survival.
The government will of course bail out Hadassah and the mandarins of the treasury’s budget department − the most powerful civil servants in Israel − will make sure that effective control of the medical center’s financial affairs is transferred to the government. There is no other way they will agree to fork out what will be at least a billion shekels over the next few years. Hadassah women will never again have much of a say in the decision-making. While to all purposes this will be de-facto nationalization, it will probably be called something else. Prime Minister Benjamin Netanyahu, facing considerable pressure from the Obama administration on the Palestinian and Iranian issues, is too fearful of adding to his troubles a potential showdown with the old American Jewish establishment.

Hadassah women may have lost much of their stature due to generational changes and the shifting landscape of Jewish philanthropy, and are no longer a central pivot of American Zionism as they were a generation ago, but they still wield considerable influence. What they lack in fund-raising prowess and financial acumen, they still have in lobbying clout. Israel Director Shimron is married to one of Netanyahu’s oldest childhood friends and personal lawyer. The Women’s Zionist Organization of America would become a nonentity overnight if it is forced to abandon its connection to the Jerusalem hospitals. Netanyahu won’t do that to them. They will retain their titles, be allowed to continue fund-raising on the medical center’s behalf in North America, hold their galas, cut ribbons, fete each other and make passionate speeches, but that’s all.

The Hadassah debacle has provided a valuable lesson to both Israelis and American Jews. While the financial assistance of the Diaspora was extremely valuable, perhaps crucial, to Israel in its early years, continuing to rely on the generosity of kind women in America can lead to bankruptcy, as it has in Hadassah. Israelis have to take ownership of their own social issues, just as they must do with all their other challenges. This doesn’t mean we are ungrateful in any way, only that we have to grow up. We’re still friends and if you want to continue donating, that’s great, but if not, well then, thank you ladies for your money and good-bye.

Hadassah and Hubris Part 6

From Haaretz, Feb. 21:

 Hadassah: Medical excellence, management malpractice The world renowned hospital is controlled by the women’s organization, but runs as poorly as a government institution.
 By Meirav Arlosoroff
 Feb. 21, 2014 | 8:23 AM

  In the middle of 2012, Hadassah Medical Center’s board of directors received a damning report on its two Jerusalem hospitals -- which have over 5,000 employees and annual revenues of some 2 billion shekels ($568 million).

 The report revealed that a major medical center that plays a key role in the health of Israel’s biggest city was not being properly managed on the most fundamental level. The center had no financial targets for increasing revenue or market share. There was no cost accounting for procedures done by doctors -- no one knew if the medical treatments were profitable or lost money -- and by how much. There was no breakdown of expenditures by department, and department heads did not know whether their units were in fact making or losing money. But they also didn’t feel they were being deprived of useful information because none had ever received management training.

There were no work plans, no data collection, no supervision of the hospitals’ financial management or of manpower costs.

 The report, which was prepared as Hadassah Director General Prof. Shlomo Mor-Yosef was stepping down as was the medical center’s comptroller and chief financial officer, was the start of the snowball that ended with the Hadassah receiving protection from its creditors in court a week ago.

Over the past 18 months, not a stone has been left unturned in Hadassah by its new director general, Avigdor Kaplan, and the board. And under every stone more and more failures have been found. All together they add up to a financial and management fiasco at a world renowned medical center.

 Everywhere you look, there seems to have been a glaring lack of management at the medical center. For example, doctors have been paid overtime for working in the afternoon to help reduce long lines for appointments. The extra hours are a part of the regular operations of the hospital - not part of the private medical services (Sharap) it offers. Shortly after Mor Yosef’s departures, Hadassah’s new management began exploring way to tackle a deficit that by the end of 2012 had reached 850 million shekels. What they discovered was that in many specializations the number of procedures carried out in the morning hours was suspiciously low. Instead, most were performed in the afternoon when the doctors received overtime pay.

 This kind of featherbedding reached its peak when the private medical services were involved. The doctors performed procedures on a private basis also in the afternoon, the same time they were supposed to be providing services under the hospital’s public health service requirements. In practice, a few of the highest wage earners at Hadassah were doctors who received salaries for the public healthcare services they provided, but in practice worked only in the private services. Hospital management seems to have known and done nothing.

 Artificially long waits

Management never supervised the hours of the private healthcare services, or the scope of services provided. By creating impossibly long waits for receiving treatments and appointments in the public health system, doctors were easily able to maneuver patients toward private care. Research conducted at Hadassah a year ago showed that the average wait was 55 days for treatment in the public system and only seven days for exactly the same treatment, by the same doctor and in the same hospital in the private system.

 It was of course not particularly complicated to prevent this. All that had to be done was to set quotas between the two systems: No department could offer private medical care beyond a certain percentage that must be dedicated to public services, and no doctor could receive patients privately if he did not provide a certain number of the same treatments in the public framework.

 Similarly, Hadassah could have linked waiting times for public and private medicine, for instance by creating a rule that a private appointment would always be one day longer than in the public system. Creating such a linkage would give the doctors an incentive to increase the quota of their activities on the public side and reduce as much as possible the waits for treatments for the government-subsidized patients.

 The lack of management supervision was also evident in the odd contracts governing the operation of the private healthcare services. These were historic contracts signed decades ago -- it seems even as much as 50 years ago -- and have never been changed out of a fear of upsetting the hospital’s labor relations. The contracts state that the hospital receives only 22% of the doctor’s gross revenues from the private services -- for net revenues of just 16%. This is a ludicrous amount considering that the entire expense of providing private medical services is absorbed by the hospital. Moreover, private services were so popular in the first place because of Hadassah’s reputation as a leading medical institution. Hadassah management must have certainly known that such a contract was problematic for the hospital itself, but management was afraid of angering the doctors.

Research vs treatment

The problem of managerial neglect was compounded by Hadassah’s role as a university teaching hospital. The division between healthcare, which earns money, and research, which is a pure expense, was never made, or monitored. Many doctors spent more of their time on research than they did treating patients. In some cases, it turns out that the doctors continued their research projects even after their research grants ran out - while the hospital continued to fund the projects out of its own pocket.

 The lack of oversight over research activities is common at state-owned hospitals in Israel as well, the report says. It is a major waste of resources and takes away from doctors’ time treating patients. But at government hospitals there are limits on research activities and a doctors need to win external grants to finance their research.

 What is shocking is that Hadassah was supposed to be much better run than the government-owned hospitals. Hadassah, after all, is controlled by Hadassah, the Women’s Zionist Organization of America. It has an active board of directors that is supposed to oversee management -- this, in contrast to the outrageous situation in state-owned hospitals, which have no boards at all.

 But it turns out a corporate governance structure is no guarantee of sound management. The weakness of the Hadassah board, as evidenced by the absence of any managerial goals, seems to stems from the unhealthy involvement of the Hadassah women’s organization.

 In practice, the organization weakened the board by maintaining its own direct relations with the hospital’s director general. In such a situation, it should be no surprise that the director generals never really paid much attention to the boards they were supposed to be reporting to.

 The Hadassah organization and its members are well-meaning Zionists who have also donated hundreds of millions of dollars to the medical center over the years. But most of the organization's leaders lack business and managerial experience. The only director from Hadassah who was considered to have significant business knowledge, Judy Swartz, one of the owners of the footwear and apparel manufacturer Timberland, resigned from the board a short time before the crisis erupted.

 Hospital’s DNA

 In their great generosity, the Hadassah women created the framework that allowed the hospital to deteriorate because management and staff acted with the knowledge that there would always be someone to cover the cost of high salaries, and deficits.

“The organization’s DNA was deep pockets. There would always be someone to pay -- the Hadassah women or the government -- and therefore no one had an incentive to ever become more efficient,” a senior official in the health system told me.

 This DNA is embedded deeply in Hadassah, as evidenced by the fact that it employees are refusing, even when the hospital is collapsing around them, to agree to any cuts in their salaries. Employees of a private organization would never take such a stance if their employer was in such jeopardy. Management and staff could likewise take comfort in knowing their institution was too big and too high profile to fail. Management paid employees, mostly the doctors, whatever they asked for in exchange for peace. Employees, in particular the doctors, demanded more and more even if it was evident that it would be financially detrimental to the hospital.

 Another indication that the supposedly privately run Hadassah was in practice a public institution was its practice of paying noncontributory pensions, even in the case of voluntary early retirements that were part of various recovery plans instituted at the medical center over the years. This meant that the employee contributed nothing toward his pension, which is paid entirely out of the institution’s budget.

 The very generous retirement package Hadassah gave to Mor-Yosef, including a bridging pension of 75,000 shekels a month until he reaches the official retirement age, is in practice a budgetary pension in every way. Bridging pensions were paid by Hadassah regularly, which is one of the reasons why the recovery plans formulated by Hadassah over the past five years failed. Whatever savings were made by laying off staff were easily eaten up by paying pensions to those who left.

This DNA is also what prevented management from healing Hadassah. They had no partner who would agree to lend a hand to save the organization. Therefore, the only way to impose a recovery plan is to force it on the employees via the courts. Instead of acting through the Labor Court, in agreement with the workers, Hadassah management chose to petition the Jerusalem District Court as a way of coercing the employees. All sides will lose in this case.

 But it is, of course, the government that made the decisive contribution to Hadassah’s managerial failure by exempting itself from overseeing the hospitals in Ein Karem and on Mount Scopus, since they are supposedly private. The Health Ministry claimed it had no legal authority to do so.

 But let us remember that Hadassah also operates under the wage agreements set by the state; and under limitations on its scope of operations, set by the state; and under rate schedules, set by the state; under limitations on the number of inpatient beds it can have, set by the state; and of course under the state’s “too big to fail” insurance.

The claim then that Hadassah is a medical center that does not need to be supervised by the state is baseless. Given that the Health Ministry lives just fine with the fact that the hospitals it owns operate without boards of directors and without internal auditors, makes it easy to believe that the ministry didn’t think it had to supervise Hadassah either.

 The treasury is no less at fault

The government’s other arm involved in the affair, the Finance Ministry, contributed no less to the management failure at Hadassah. The treasury placed severe limitations on hospital budgets. The portion of the state budget intended for health services was eroded within a decade form 5.2 percent of GDP to only 4.5% of GDP, and this was during a period when health costs only rose. This prolonged shrinking of the health care budget led to serious deficits in the system: Every hospital, except for Sheba Medical Center at Tel Hashomer, and every health maintenance organization are in debt; but at least the public bodies receive compensation via grants from the treasury to close their deficits.

 These equalization grants for the HMOs and the subsidies for the hospitals are paid out regularly. The hospital subsidies have reached 720 million shekels a year. Hadassah, because it is seemingly a privately owned institution, was not eligible for these subsidies, and so its situation became worse than that of the other hospitals.

This is the chronic disease of failure that makes one tempted to say it was foreseeable. Since the government did not supervise and was not interested in supervising, Hadassah's colossal failure came as a big surprise. Now it will cost all of us at least half a billion shekels to fix the mess.

NHS, Anyone?*

(click here to view)

Bruce Plante Tulsa World Feb 23, 2014 EditorialCartoonists.com

See here: *There's nothing wrong with the concept of the NHS, or indeed the concept that health care in the US needs radical reform. The devil is in the details. Populations grow, often at unpredictable rates. Doctors, nurses, and all other varieties of health care providers and facilities do not automatically expand [or contract] to match the needs of populations. A fact so simple only a child can understand it.

Gee Whiz, It's 10 Years Already!

Searching for a particular post, I suddenly realized I've had this blog for 10 years now.  Haven't begun to write all I've wanted to say, but maybe [!?] the next 10 years will be better.

As the saying goes, "to be continued"...

Hadassah and Hubris Part 5: Accountability at Hadassah

From Haaretz: editorial Feb. 13, 2014

Accountability at Hadassah, not just a bailout

The anarchy, irresponsibility and administrative failure at Hadassah Medical Center surprised the public. No one, even in the health or finance ministries, knew just how deep was the hole in which Jerusalem’s two Hadassah hospitals had sunk: annual losses of 300 million shekels ($85 million) and an accumulated deficit of 1.3 billion shekels. 

It is clear that a recovery plan is needed to bring Hadassah into the black and allow the medical center to continue to operate. The Finance Minister – in other words the Israeli public – will put up hundreds of millions of shekels, and employees will have to do their share. That means layoffs, wage cuts, a complete overhaul of terms of employment and of the center’s private medical services (known by the Hebrew acronym Sharap). 

But it’s not enough to address the future; an accounting of past actions is also needed. It is inconceivable for labor to pay the price, while management goes scot-free. The focus must be on 2001 to 2011, when Prof. Shlomo Mor Yosef was director general of Hadassah Medical Center. In this period the center’s deficit swelled due to the failures of the management, which sought only to appease labor through unconditional surrender to their demands. It was in this period that the magnificent and megalomaniacal Sarah Wetsman Davidson Tower, which costs 30 million shekels a year to operate, was built. 

In light of this mismanagement, Mor Yosef’s employment terms were unwarranted. As head of Hadassah Medical Center he earned 140,000 shekels a month, plus “appreciation bonuses” equal between two and four months’ salary. His retirement conditions, too, are outrageous: a bridging pension of 75,000 shekels a month until he reaches the official retirement age of 67, several million shekels in severance pay, redemption of his leftover sick pay and vacation days, and continuing contributions to his pension and other savings plans, even though he no longer works for Hadassah. 

Hadassah’s board of directors also failed to meet its responsibilities. From the minutes of its meetings it is clear the board did not stand up to management, making do with gentle criticism that was not acted on. Thus, the conduct of the chairmen during this period should also be scrutinized: David Brodet, Yossi Nitzani and Yossi Rosen. 

In order to get to the bottom of these weighty issues, the cabinet should appoint a commission of inquiry that will examine the reasons for the financial collapse, the conduct of the director general and all the gatekeepers – the directors, accountants, internal auditors, the Registrar of Nonprofit Organizations and the health and finance ministries. Only an investigative commission with teeth will make it clear that administrative failure in the public sector incurs a personal cost rather than, for example, being hired to head the National Insurance Institute, at a monthly salary of 60,000 shekels.

Hadassah and Hubris Part 4: The New Tower

 Health sources: New Hadassah tower helped drive hospital to near-bankruptcy 

Haaretz, Feb. 13, 2014

The new tower at Hadassah University Hospital, Ein Karem is one of the main causes of the near-bankruptcy of Hadassah Medical Organization. 

The 19-floor Sarah Wetsman Davidson Tower contains high-tech operating theaters and private rooms. While the hospital did need these new facilities, the building’s upkeep is so expensive that it rapidly worsened the hospital’s already shaky financial situation. 

Yet there is almost no mention of the new tower in Hadassah Medical Organization’s application for protection from creditors, which was granted by the Jerusalem District Court on Tuesday. The petition, which presumes to list all the causes of the medical center’s financial collapse, mentions salary distortions, a surplus of employees, problematic agreements with Hebrew University and outsized discounts to Israel’s health maintenance organizations. The tower is mentioned only as an asset. 

Most of the funding for the tower – 800 million shekels ($227 million) - came from the New York-based Hadassah, the Women’s Zionist Organization of America, which operates Hadassah Medical Organization, even though its budget deficit was growing rapidly during that time. The state contributed another 197 million shekels. 

During those years, despite the huge influx of cash for the tower’s construction, the medical organization, which also includes Hadassah University Hospital, Mt. Scopus, was scrambling for money. One tactic, revealed recently, was to pull money out of the doctors’ private funds, unbeknownst to the doctors themselves. 

Health sector sources said they had no doubt that paying for the tower’s upkeep was a major burden for the hospital. The new facilities were necessary, as the hospital had been overcrowded and patients’ rooms had been substandard. 

The new tower has 19 floors, including five below ground, and contains 100,000 meters of space, nearly double that of the old building. It could be considered Israel’s best hospital facility, with 500 beds in private or double rooms. By comparison, the Sami Ofer Building at Tel Aviv’s Ichilov Hospital has double and triple rooms, and not one single room. 

The tower’s cost -- $360 million, including $318 million for construction and another $42 million for equipment – was tens of millions of dollars beyond the original budget. 

Since the new building opened, it has increased the hospital’s operating expenses by 30 million shekels a year, sources told TheMarker. Hadassah said that figure is incorrect. 

Some 85% of the new building’s operating budget comes from donations, as is the case with many of the newest hospital facilities in Israel. All of that money is raised by the Hadassah women’s organization. 

Still, the hospital very likely could have sufficed with new facilities that cost less to maintain.
“It’s killing their operating budget,” said a senior official in Israel’s health sector. “A bloated project, ostentatious and wasteful, that doesn’t suit the standards in Israel. One or two patients per room? Someone needs to fund that.” 

Another health sector source suggested that the women’s organization’s promotion of such a building showed it was out of touch with the economics of hospitalization in Israel. 

“The Hadassah women live in the United States, where people pay thousands of dollars for a day of hospitalization. In Israel it costs a few hundred dollars. You can’t maintain the same standard,” he said. 

Audrey Shimron, head of the Hadassah women’s organization in Israel, said building a tower of this standard was a matter of foresight. The tower was built to last 50 to 70 years, she said. 

Meanwhile, former Hadassah Medical Organization director Shlomo Mor-Yosef said yesterday that he is being unfairly blamed for the hospitals’ financial problems. Taken to task for the large salary bonuses he received in his former job, Mor-Yosef, now director general of the National Insurance Institute, refused to take the blame for the Jerusalem hospital’s dire financial straits, saying that the Finance Ministry and the Hadassah women’s organization knew about its financial decline but failed to do anything about it. 

Mor-Yosef was speaking at a session of the Knesset Finance Committee, which he was attending as NII director general. He had initially been asked to attend to discuss imbalances in the NII’s own cash flow. However, Knesset members demanded that he respond to a report in Wednesday's Yedioth Ahronoth newspaper about salary bonuses he received from Hadassah during a period in which the hospital accumulated a huge deficit. 

Hadassah Medical Organization filed for protection from creditors on Friday, and only paid staff at the hospital’s two Jerusalem locations half their salaries at the beginning of the month. The hospital has also been wracked with labor unrest over the past several days. 

Hadassah employees continued with their labor sanctions on Wednesday, as the hospitals continued to offer only life-saving treatment. 

The hospitals are expected to receive a cash infusion of 22 million shekels on Thursday or tomorrow from the Hadassah women’s organization, which would be used to pay salaries, said hospital sources.
The hospitals are also months behind in their payments to workers’ pension and provident funds.
Meanwhile, the halls of the hospitals were nearly empty on Wednesday. Many patients came to Jerusalem’s Shaarei Zedek hospital instead, which appeared significantly busier than usual.

 

Hadassah and Hubris Part 3: The Underlying Problem

Haaretz: Feb. 13, 2014

Why Hadassah is a perfect example of an institution that's too big to fail

Health Ministry Director General Roni Gamzu told a session of the Knesset’s Labor, Welfare and Health Committee this week devoted to the crisis at Jerusalem’s Hadassah University Hospital that he has not been monitoring what has been happening at the crisis-mired medical center because it is a private hospital and he has no oversight authority there. 

The cash-strapped hospital, which consists of two Jerusalem hospital campuses sponsored by the U.S.-based Hadassah women’s organization, filed for protection against creditors last Friday. Privately-owned hospitals, Gamzu said, don’t want to be regulated, “but when they’re in trouble they come and ask for assistance from the state.” 

There are other similarly troubled private hospitals in Israel, Gamzu noted, most of which, unlike Hadassah, are very small. 

Hadassah is actually one of the largest hospitals in the country, with revenues in 2012 of close to 2 billion shekels ($569 million).  It is the major hospital service provider in Israel’s capital. The vast majority of its revenues are paid to Hadassah Hospital by the country’s four health maintenance organizations (kupot holim). The HMOs pay for regular services rendered through the public health system and also through their supplemental insurance plans for medical care provided by doctors at Hadassah on a private basis − sharap services, as they are known by their Hebrew acronym. All in all therefore, the hospital is supported almost entirely from public funds. And in addition, Hadassah’s revenues are limited by the state, as part of government curbs at all the country’s hospitals, in an effort to rein in healthcare spending. 

When Hadassah became mired in its current financial problems, it came running to the state to be rescued. The state is considering injecting half a billion shekels into the hospital even without taking it over. The hospital is a classic example of an institution that is too big to fail, meaning that the public is being relied upon to ensure its continued operation. Even though it is owned by the Hadassah women’s organization rather than the State of Israel, it is a public hospital for all intents and purposes. But if that’s the case, why isn’t it under the state’s oversight? 

The Health Ministry’s response is that it has no legal mandate to impose oversight, which is true from a technical standpoint. The ministry’s supervision of hospitals − all hospitals, including government ones − is based on a 1940 order of the pre-state British Mandatory government. Written at another time by another government authority, you won’t find mention of financial oversight in the order, or in fact the issue of oversight itself. 

Paradoxically enough, the Justice Ministry is the agency that provides oversight of the medical system here, but it lacks legal teeth. In the case of private hospitals, it has never occurred to anyone at the Health Ministry in the 66 years of Israel’s existence to address this absurd legal vacuum. The ministry’s failure to create even a legal foundation for such regulation became apparent at hearings by a committee headed by Health Minister Yael German that is trying in part to address the inherent conflict of interest at her ministry among the hospitals, custodial nursing care insurers, providers of services such as mental health care or equipment, the supervisor of hospitals and the HMOs. But the Health Ministry has no intention to provide oversight, so why knock oneself out to enact modern legislation over its authority? 

Among the evidence presented to the committee was testimony that the subjects of the ministry’s oversight, meaning hospital directors, the most prominent of whom have been on the job for 10 to 20 years, show contempt for requests the ministry makes of them. When it comes to government-owned hospitals, the Health Ministry has authority and actually owns the facilities, but that doesn’t mean it has genuine authority over the hospital directors − so it learns to live with them. 

Private fiefdoms

The ministry deals with the contempt shown by the hospital heads by cornering the hospitals when the time is ripe. When the hospitals make a request of the ministry, it in turn conditions a positive response on getting missing data. In short, the overseer makes a deal with the overseen to get information that the law requires the hospitals to provide in any event.

Zeev Rotstein, the powerful head of the Sheba Medical Center at Tel Hashomer east of Tel Aviv, even built a helicopter landing pad at his facility and hid the project from the health and finance ministries. Rafael Beyar, the director of Haifa’s Rambam Medical Center, has also been on a collision course with the government after media reports disclosed his plan to build a private hospital within the confines of his public one. He wants to build a hospital tower funded by private contributions that will not be owned by the hospital itself. 

The country’s government hospitals are like private fiefdoms under the absolute rule of their directors general, who are appointed for life and do whatever they please. Supervision by the Health Ministry there is more in the nature of a recommendation. And paradoxically, the fact that these are public hospitals even enhances the hospital directors’ absolute power, because the state has nowhere to go to purchase the most advanced kinds of medical care for the public other than the large public hospitals. 

If you want to get advanced care on an immediate basis at these places, it’s available only through connections − and the best connection is directly to the hospital head. And since everyone is potentially in need of these connections, it’s no wonder that the directors of the country’s public hospitals are among the most powerful people in Israel. 

The problem is larger than Hadassah

So Hadassah is a privately-owned example of a much more public problem. If the Health Ministry exerted no oversight over Hadassah, it’s not just because it’s a private facility but because it doesn’t really supervise any of the hospitals, even the ones it owns. And there is no chance that it will impose supervision on any hospital if it continues to tremble in fear before the hospitals’ directors. The fact that the Health Ministry’s own directors general have historically been senior physicians has only buttressed the ministry’s distaste for the prospect of going head-to-head with the hospital heads. 

It’s doubtful that the Health Ministry’s attitude will change for the better as long as the power of the country’s senior doctors, first and foremost the hospital directors, is not curbed. This major confluence of power among a handful of people exceeds that of any corporate tycoon or any consortium of financial firms. 

The healthcare system cannot be improved as long as this concentration of power is not broken up through the most basic administrative action: term limits for hospital directors. No one in such a position needs to be there for life. That’s true in the public sector in general, and all the more so when it comes to something as sensitive as the lives of members of the public. It’s not right as a matter of proper management. It’s also ethically flawed and it’s a major source of inequality in Israeli society. Those with pull get more of a chance to stay alive just because they have a hospital director’s personal cellphone number. The time has come to put an end to this situation and limit the terms of the hospital directors.

 

Hadassah and Hubris Part 2: Background

  Haaretz, Feb. 11, 2014

If Jerusalem’s Hadassah hospitals are so great, why are they so sick?

Everything you didn’t know you needed to know about the financial crisis jeopardizing the medical center your mothers and grandmothers helped build and run.

How did Hadassah Medical Center get into the mess it’s in today, with the threat of closure hanging over its two hospitals in Jerusalem, staff on strike and debt of around $370 million?
To answer the big question, some background is essential. The center, which today comprises the Hadassah University Hospital on Mt. Scopus and its newer counterpart outside Ein Karem, was founded by Hadassah, the Women’s Zionist Organization of America, and is still operated and funded by the charity.
Between 2005 and the first half of 2013, for example, the organization contributed some 2 billion shekels (about $568 million by current exchange rates) to the center, for both current and capital expenditures.
But the women’s organization is itself in trouble, partly the result of losing millions of dollars due to the Madoff scandal. According to a former consultant to Hadassah, the organization has drastically cut its regular funding to the Jerusalem hospitals, to about $19 million a year from what had been upward of $40 million.
To this must be added the high costs of a major expansion project on the Ein Karem campus, excessively high salaries paid to some staff members and discounts given to Israel’s health insurers.
In January 2013, Prof. Ehud Kokia stepped down as director of Hadassah Medical Center over the debt crisis, after less than two years on the job, and the center tried to launch a financial recovery program that would include contributions from the Israeli government. 

So how big is Hadassah Medical Center’s debt?
The center carries debt of 1.3 billion shekels, plus an annual deficit of 250 million shekels to 300 million shekels. 

How does management plan to reduce its debts?
By firing 300 employees, cutting salaries and benefits, and increasing the medical center’s share of the revenue from private medical services provided by physicians using its facilities. The center has reached an agreement with the Finance Ministry and with Hadassah over allocations of a total of 100 million shekels over the next three months to keep the hospitals open. On Tuesday a Jerusalem court gave it a three-month respite from creditors, after it sought protection from lender banks. 

Is Hadassah Medical Center private or public?
The center straddles the line between public and private. Its hospitals are not owned by the government; it is Hadassah, from its New York headquarters, that hires the center’s CEO and board of directors, and they provides private medical services, paid out of pocket, with private health insurance or with supplementary coverage provided by Israel’s four health maintenance organizations (kupat holim). But the center’s hospitals and outpatient clinics are also part of the national health care system, under which every resident belongs to one of the HMOs.
The possibility of nationalizing Hadassah Medical Center as part of the Finance Ministry’s bailout package has been raised – Health Ministry director general Ronni Gamzu, for one, supports the idea – but for now it’s not on the table. 

What set off the current strike, or go-slow, by hospital employees?
Due to its large budget deficit and accumulated debt, workers received just half of their January salaries. After management sought to cut doctors’ salaries, instead of agreeing to reduce immediate wage costs by converting part of their salary into loans to the medical center, physicians initiated work sanctions on February 4. The hospitals were placed on weekend and holiday footing, providing urgent treatment only, and new patients are only being admitted in event of an emergency.
On Sunday, hundreds of doctors demonstrated outside the Jerusalem offices of Prime Minister Benjamin Netanyahu, urging him to intervene in the dispute. On Monday, the remaining hospital staffers joined the strike and colleagues at other hospitals held a two-hour solidarity strike. 

How big is Hadassah Medical Center?
Between them, the two hospitals have more than 1,000 beds, 31 operating theaters and nine intensive care units. There are six schools for health professionals, operated jointly with Hebrew University. The 19-story Sarah Wetsman Davidson Tower, completed in 2012 and costing $363 million, added 500 more beds and 20 operating rooms. By its own estimate, Hadassah Medical Center treats approximately one million patients a year. It employs 6,000 medical professionals and support staff, some of them part-time. According to the center’s website, there are 800 doctors in its employ. More than half – 488, to be exact – provide private treatment. 

What’s the difference between private and regular medical services at Hadassah?
For one, an average waiting period to receive treatment of seven days for the former, versus 55 days for the latter. Beyond that, surgeons operate on public patients in the morning and on private patients after 12:00 P.M. Similarly, private consults on hospital premises are after 3:30 P.M. only. 

How much does the medical center make from private medicine?
Hadassah Medical Center’s net income from private medicine amounts to just 16% of the hospitals’ revenue from private medicine, or around 40 million shekels a year. The center’s physicians earn a total of 128 million shekels a year from private care. For the sake of comparison, the combined annual salaries of all the center’s physicians (including doctors who do not offer private services) for public medicine come to 600 million shekels.
Most Hadassah doctors aren’t making millions. Of the 488 of the center’s physicians who do offer their services privately through the hospitals, some 85% gross less than 50,000 shekels a month. Only between two and three dozen Hadassah doctors earn more than $1 million a year for their work at the medical center.

Hadassah and Hubris, part 1

Abroad, the two Hadassah hospitals at Mt. Scopus and Ein Karem are generally regarded by American Jews as being tremendously good institutions, as is only right since "everyone" knows that Jewish doctors are the best, and Israel, of course, is a "light unto the nations".

Well, it is all coming apart at the seams.  Hadassah Medical Organization is bankrupt, with debts currently estimated at close to $400 million, and probably a lot more.

What happened?  And why do I care?

My husband's family has been a kind of mini-Mafia in Hadassah.  At one time my husband and four of his brothers all worked for it, my husband at Mt. Scopus, and the others in Ein Karem.  Now, only one does [two left when they reached pensionable age, my husband and one other brother left for other reasons].  So we know a lot of the stuff that doesn't reach the newspapers.

Hadassah, like all the hospitals in Jerusalem, is a private hospital, although it accepts patients from all the kupot holim, and only patients [foreigners and/or Palestinians] who don't have insurance have to pay cash. [This, incidentally, is why Hadassah's patient population is more than half non-Israeli. The kupot can take over a year to pay a bill; cash is paid in advance or soon after discharge].  See Part 3 for an analysis of what this means.  In previous years, compared to other Israeli hospitals, the two Hadassahs were awash with money, and Israelis perceived the nice American Hadassah ladies as rather gullible, and so the internal politics of Hadassah were always rather more cutthroat than in other hospitals: it could pay very well to stick the knife in someone's back to step up the ladder.  I've worked in US, UK, and other Israeli hospitals and while there is always intrigue, I never experienced anything as ruthless as what went on in Hadassah, btw.  Even when my husband worked there [1973-1985], contracts for maintenance and renovation were let without any real oversight, money passed under the table, and the resulting work was often shoddy.  There was a lot of waste.  But the sums provided by the American donors were enough to hide most of it.

In 2001, after years of mismanagement and outright theft, the small, mostly maternity hospital where I worked, Misgav Ladach, went belly-up.  Also private, the collection of men who constituted the governing body [amuta] were indifferent to the machinations of the hired administration. Once yearly, they'd meet with the Administrator, ask if everything was OK, and when, without providing any documentation about the financial state of the hospital, he said it was, they would leave, satisfied.  Meanwhile, he, and his deputy [who was also his nephew] was siphoning off as much as they could, including the money in the employees' pension funds [which is why, today, I have no pension]. This only came to light when an outside investigator was appointed by the receiver.  Many people I talked to were shocked: "But there are laws!"  And, yes, there are laws.  But the bottom line is, no money, no one gets paid anything.  Misgav Ladach's debts were estimated at $120 million; the building and equipment was eventually sold for $10 million.  The suppliers never received anything more than a fraction of their bills, and the workers, after 6 years of court wrangling, received partial compensation from the National Insurance Institute [Bituach Leumi]

What is happening now at Hadassah is what happened at Misgav Ladach, and currently also in the still-functioning Bikur Holim Hospital, another private Jerusalem hospital [all hospitals in Jerusalem are private; Shaare Tzedek is currently administering BH]  Only, ML had 180 employees, not 6000, and it wasn't a teaching hospital.  My brother-in-law, in what could be described as "middle management" of a particular department of Hadassah, will almost certainly lose his job in any restructuring; hopefully his pension is safe [Hadassah uses a different sort of pension fund from my old hospital], but at this point no one really knows.  He's never worked at any other place, and his job cannot be replicated outside of the medical world, so, at age 50 or so, he is likely to be permanently unemployable if fired.  His wife, who he met at Hadassah, is a skilled radiation therapy technician, so her job is probably safer, but she has so much seniority that she could be pushed out for a new graduate who is much cheaper.  In Israel, all sorts of workers in hospitals, apart from the doctors, are covered by collective wage agreements which are almost impossible to break unless the position a worker fills is eliminated [doctors work on individual contract, which is why they are being pressured to make "voluntary" contributions of large parts of their salaries]

In subsequent parts of this post, I've quoted articles from Haaretz, which are all very good.  The reason I'm reproducing them in full is because they can't be accessed without membership or subscription, and I think they need to be widely disseminated for the public good.  While it's true that today's "Hadassah ladies" are a pale shadow of their mothers and grandmothers, they still work hard, and for an excellent cause, and don't really deserve to have their efforts wasted as they have been -- but the time has come for a really hard look at the way hospitals are managed in Israel.  The free lunch has ended.  But the tragedy is not that an institution might fail, but that 6000 families, as well as the patients the hospital has served will pay a much higher price than the donors who created and maintained Hadassah.

Honesty, Obama-style

(click here to view)

Nate Beeler The Columbus Dispatch Feb 13, 2014 EditorialCartoonists.com

At least, HE believes what he says. I doubt the Supreme Court does, nor the American public, any more.

A Distinction Without a Difference

(click here to view)

A.F.Branco Freelance/Self-syndicated Feb 10, 2014 EditorialCartoonists.com