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.
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