Israel's government hospitals from Nahariya Hospital in the north to Barzilai Hospital in Ashkelon in the south are suffering from a cash flow crisis so severe that there are fears of a halt to purchases of critical equipment and harm to medical services, according to internal correspondence between hospital directors and their financial officers, which "Globes" has obtained.
The government hospitals face a budget shortfall of NIS 500 million, before financing, and their total deficit is NIS 800 million.
"The immediate effect, unless there is a miracle, is that all our financial managers will stop signing orders," wrote Assaf Harofeh Medical Center director Dr. Benny Davidson to other hospital directors. "I cannot remember anything like this for at least 12 years. The answers we're getting from Ministry of Health controllers are an inability to change or influence anything and they cannot help. I wish to emphasize that I am not talking about a pure deficit, but a severe cash flow shortage, in other words, an inability to pay suppliers, with all that that implies… I cannot understand how this situation can be allowed to pass quietly as it is liable to end in disaster, due to the severe shortage of critical equipment and attempts to cut costs that are liable to end in mistakes and damage to hospitals."
Dr. Davidson blames the Ministry of Finance for the cash flow shortfall and calls for a near-rebellion by healthcare leaders in order to shock the system. "When salaried employees do not receive a fair wage, when the procurements budget is unrealistic and becomes more unrealistic with each year, when we are told to increase our revenue targets when contracts with healthcare funds prevent this, and increasing operations under the agreements only increases the discounts to the funds. All this is a sourcesof pride to the Ministry of Finance, while the Ministry of Health, with all the goodwill, cannot deal with the Ministry of Finance - I think that the time has come for the forum of government hospital directors to throw down the gauntlet and make it clear to the Israeli public, which still relies on public medicine, that we are becoming a broken reed, and it is not our fault."
Davidson sets out the steps that need to be taken. "I expect the forum chairman to convene us for an urgent meeting to discuss the measures required by the situation, when we have little time, and we face a month with few full work days. I expect the forum to make aggressive demands to the owner of the government hospitals and their representative, the director general of the Ministry of Health, to demand that the health minister and through her to the finance minister, the chairman of her party, to intervene and prevent a disaster caused by an inability to understand the writing on the wall at the Ministry of Finance accountant general about the cash flow, the budget department about the scandalous budget and its deficits."
In response to Davidson's demand for an immediate cash flow of NIS 10 million to pay suppliers, according to the correspondence obtained by "Globes", the Ministry of Health controller said, "Regrettably, we cannot transfer the financing to any hospital because of the very large deficit in the debit/credit balance. I met the controller general who will not allow us to increase the deficit. We are aware of the difficulties at all of the hospitals, but we cannot do anything."
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2013
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